How Hard Seltzers Are Transforming the Spirits Industry


How Hard Seltzers Are Transforming the Spirits Industry

Hard seltzers have been a rapidly growing trend in the spirits industry. 

This category was already worth $550 million in 2018, and is expected to grow to $2.5 billion by 2021, achieving an impressive 66 percent annual growth rate during that period. Most notable within seltzers is White Claw, one of the major brands driving this trend. In 2019, the brand saw sales increase 250 percent after having entered the market with what was essentially a new spirits product.

In an age when more and more consumers are searching for healthier alternatives to sugary mixed drinks and calorie-packed beers, consumers—and younger ones in particular—have been enticed by White Claw’s low-sugar, low-calorie, and gluten-free appeal. The product is also interesting in the fact that it appeals equally to men and women—somewhat of a rarity in the world of spirits.

If you’re a company in the alcohol space that’s thinking about entering the category, keep reading to learn more about the state of hard seltzers, why consumers are drawn to them, and what you can do to capitalize on these preferences. 

Mimicry is the sincerest form of flattery

In case you’re unfamiliar, hard seltzers are flavored seltzer with alcohol in it, and tend to be as strong as a light beer. It is not a novel product, but one that didn’t take off until 2019. Millennials found this healthier yet still somewhat fancy perception of hard seltzer especially appealing, and now drink 70 percent of the supply. The category has grown tremendously of late, fueled by COVID-19 and seasonality. It turns out that, for many drinkers, an ice-cold hard seltzer is the perfect companion on a warm summer night. 

Seeking to emulate White Claw’s success, a number of competing companies have rushed to the scene with their own spin on seltzers.

First, there’s the second-biggest name in the industry—Truly—which is owned by the Boston Beer Company, the shepherd of other brand-name products, including Sam Adams, Twisted Tea, Dogfish Head, and Angry Orchard Hard Cider.

Next, you have Constellation Brands, which unveiled a line of Corona seltzer products in late 2019. Similarly, Anheuser-Busch also released its own seltzer line, adding three new flavors to the fold in August 2020.

With even wine brands like Barefoot jumping into the space as well, it appears there’s no sign this new category is letting up. In fact, leading brands in the spirits industry are betting that the hard seltzer trend is here to stay.

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Industry review: What makes hard seltzers so special?

The low-calorie, low-sugar nature of hard seltzers is only one reason consumers are increasingly drawn to this spirits category. The taste of hard seltzer and its ability to appeal to consumers across demographics is also bringing consumers back for more. 

We learned from the success of the nonalcoholic beverage, La Croix, that developing a portfolio of niche flavors has the ability to drive growth for an entire product category. After all, when was the last time you bought a box of La Croix knowing that you’d like all of the flavors that came in it? The same is currently true for hard seltzer. 

In an age where more and more consumers expect personalization, catering to niche tastes can go a long way toward driving sales. There’s still much room for brands to establish themselves as a recognizable and beloved beverage in the seltzer space. Alcohol brands have been taking advantage of this opportunity to differentiate themselves to capture their own demographic of loyal shoppers.

For example, some seltzer makers are creating unique flavors (think: Bon & Viv’s Pear Elderflower) to attract consumers. Others are highlighting nutritional supplements added as ingredients to their beverages, like Vizzy’s Black Cherry Lime seltzer, which comes “with antioxidant Vitamin C from Acerola superfruit.” Still others are appealing to specific demographics (e.g., Bon & Viv targeting women in their 30s and Social Club targeting men in their 30s).  

How newcomers to the hard seltzer space can win

So if you’re a spirits company launching in the hard seltzer space, now is the time to get started.

Over the last several months, more and more consumers got used to the idea of buying alcohol online. Based on the resulting data, it turns out that consumers don’t really have any brand loyalty when it comes to eCommerce spirits transactions.

As such, there’s a great opportunity for newcomers to create delicious products, market them effectively, and capture a slice of this growing marketplace.

To do this, brands can do to the following:

  • Be discoverable online. Hard seltzers are most embraced by millennials today with Gen Z to join. Soon, the majority of hard seltzer’s target consumers will be discovering and shopping online. Learn about how to market to this demographic.
  • Target your customers. We cannot overstate the importance of understanding your hard seltzer consumers as niche audiences. Brand managers play an important role in effectively positioning these products as loyalty is forming. Highlight unique features of your seltzer—like supplements, antioxidants, uncommon flavors, and other things that set your product apart (e.g., a seltzer made with wine). 
  • Leverage what works. Where are your target consumers engaging? What have they shown an affinity for? Identify where they learn about new products, whether it is through influencers or by word of mouth, and leverage these existing channels. Look at how much your consumers  like to spend, whether they prefer things to be shipped to them in the mail or want to pick them up in a store, and more.

With the right strategy and the right tools in place, you can make big-time inroads into this relatively nascent category, generating a ton of revenue along the way.

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