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The Rise of Hard Seltzers and What’s Next in Beverage Alcohol

By Boris Oglesby, IRI

 

Many people say that fashion is the mirror of society, but another way to see how culture is evolving is by looking at what people are drinking.

If you’ve been reading the news, you’ve seen that the most popular type of beverage alcohol right now is hard seltzers, having achieved $1.3 billion in U.S. sales in 2019. These carbonated, usually fruit-flavored, 100-or-so-calorie, malt-based beverages, such as White Claw and Truly, are reflecting broader trends we have been seeing in the marketplace over the past few years, including better-for-you products, interesting flavor profiles, and convenience.

The rapid rise of hard seltzers is also a testament to how in tune marketers are with today’s consumers, relying heavily on social media and reinforcing everything from personalization (flavors, alcohol content) to better for you (low-calorie, alcohol content). In my role at IRI helping the world’s most innovative beverage alcohol manufacturers drive growth, I’m fortunate to have a front row seat to some of the most dramatic evolutions in the beverage alcohol category. There have been few instances over the past several decades where specific beverage alcohol products have resonated to such a high level so quickly.

 


Source: IRI POS Data, Total U.S. (MULO and Convenience)


Hard Seltzer: Naysayers and Yaysayers

There are two opposing views when it comes to the longevity of hard seltzers: those who believe it’s another flash in the pan, and those who think we’re seeing the rise of a new subcategory. Naysayers point to the relatively low 8.5% household penetration. Yaysayers – and I’m one of them – believe this may just be the beginning of hard seltzers. Marketing efforts are already successfully targeting young adult consumers, including millennials and the first Gen Z-ers who have reached legal drinking age.

Some naysayers may recall the first iteration of a similar beverage, Zima, a malt-based sparkling beverage that Coors launched in 1993. It was beloved by many consumers but ultimately not by its intended target and was eventually discontinued (the company reprised it in limited markets in 2017 after nearly 10 years off the shelf, tapping into consumers’ ’90s nostalgia, and it remains popular in Japan). But the combination of today’s consumers, well-positioned product profiles and savvy marketing are making hard seltzers more attractive.

Today’s young adult drinkers (those of legal drinking age to 27 years old) grew up with fruity drinks, including Capri Sun and other juice boxes. They’re carrying that taste for sweet, fruity products with them as they age. Also, across all demographics, consumers are taking greater ownership of their own health and wellness. They want the benefit of choice – not just calories, but alcohol content as well. And, as an always-busy, on-the-go society, the convenience of hard seltzers in their durable (and recyclable) cans makes consumption at any occasion more convenient.

Hard seltzers can thank their predecessors for paving the way. They are the ultimate offspring of both light beers, which were in a calories-taste battle by the late 1970s, and a revival of sweet cocktails from the early 2000s, thanks in large part to the popular TV show “Sex and the City.” While these drinks played to different audiences at their peak, they both delivered lower calories. Light beers have been losing share to craft beers, which have higher taste profiles. And cocktails, even with mixers, still lack wide on-the-go convenience.

 

From Here to Where?

Hard seltzers are doing their forebearers proud, as they are currently driving 58% of the growth in the beer category. Specifically, the White Claw and Truly brand families saw tremendous growth during the summer, holding 80% share of the sector. Of course, these are the results of just one amazing year.

Hard seltzers have more summer appeal, so we can expect a dip in sales over these colder winter months. But just as we’ve seen with flavorful liqueurs and dark spirits, there are endless opportunities to extend flavor and deliver unique taste experiences to consumers all throughout the year. The entry of new players into this space is another indication that marketers are in it for the long haul, and each will vie to create their own point of differentiation in these beverages.

When it comes down to it, consumer choice is in fashion every season. Beverage alcohol brands that harness this and other key consumer trends that seem here to stay, including wellness, sustainability and convenience, have a better chance of outlasting the competition and becoming timeless and seasonless.


Looking to drive new growth for your beverage alcohol brand? Let’s talk! Contact me at Boris.Oglesby@IRIworldwide.com.

 

 



 

 
 

 



 

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