Alcohol & Hard Seltzer Trends

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01
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Part
01

Alcohol Industry: Trends

Some additional trends impacting the alcohol industry include the use of cans (slim cans) as well as alternative packaging for the ready to drink alcohol category to boost convenience, and more online shopping (e-commerce sales). Another trend affecting the alcohol industry in the United States relates to labeling transparency and supplier product innovations.

Cans (Slim Cans) and Alternative Packaging

  • Trends affecting the United States alcohol industry (as published by the Spirits Business) include a focus on slim cans as well as alternative packaging. Slim cans and alternative packaging improve the convenience of packaged alcohol.
  • According to Market Watch (a New York-based publication), non-traditional can package (including slim cans) are contributing to the rising sales of canned beer, which is experiencing growth.
  • According to Jessica Robinson, the vice president of emerging brands, Heineken USA, slim can beers such as slim canned ciders are designed to "meet an emerging consumer need." Available data reveal that slim can ciders (such as Strongbow's hard ciders) are fast-selling options.
  • Companies in the alcohol sector taking advantage of rising consumer demand for slim can alcohol (ciders) include Strongbow Hard Ciders. It is a White Plains brand of the New York-based Heineken USA Inc. The company recently announced the launch of a 100-calorie, 8.5-ounce slim can alcohol with three varieties of flavor.
  • Consumers feel canning make better packages for alcohol when compared to bottles, according to Chad Melis, the marketing director of Oskar Blues, a Colorado brewery known for popularizing canned craft beer. Craft beer pioneers once relied majorly on bottles — however, canned beer (an alternative to bottled beer) is more affordable for brewers — it is also getting a growing response (demand) from craft beer consumers. Consumer demand for canned beer and its convenience to brewers is driving the trend for canned alcohol and alternative packaging.
  • A Market Watch magazine article states that "canned beer is back." Craft players are driving the rising sales canned beer, which is trending "in a big way."
  • Some sellers attribute the increasing sales of canned beers to the growing sales of slim can alcohol drinks like Michelob Ultra in slim cans.
  • Beer marketers have been positive about alcohol package in cans; they agree that canned beer has several advantages over the traditional beer in glass packages among consumers as well as retailers. Canned beer is perfect (convenient) to drink on several occasions — whether on a boat, on the beach, or at a game. Retailers think the smaller size of cans packs when compared to bottled alcohol makes them fit more (convenient to fit) on their shelves.
  • Retailers, as well as beer marketers, believe the rise in can packaged alcohol as an alternative to glass bottles is tending because the "previous stigma associated with" beer packaged in cans has dissipated.
  • Canned alcohol feels lighter and is more mobile when compared to its glass counterpart. They are easier to transport on hikes as well as easier to utilize for most outdoor activities. A canned alcoholic drink goes to places that glass drinks cannot, such as pools, parks, and beaches. These convenient options explain the continued growth in the use of cans to package alcohol (especially in wine).

Online Shopping (E-commerce Sales)

  • Trends affecting the United States alcohol industry (as published by the Spirits Business) include the use of online shopping (e-commerce sales) channels.
  • According to Linchpin SEO (a Chicago-based company), trends transforming the alcoholic beverage industry in 2020 include online (e-commerce) sale of alcohol, which is becoming more popular.
  • Alcohol industry insiders have realized that the sale of alcoholic drinks from online channels and doorstep delivery is becoming common. Companies that are already leveraging this trend to sell large volumes of alcohol via e-commerce across the United States include Drizly and Thirstie.
  • The online sales of alcohol reached $2.6 billion in 2019, representing a growth of 22% YOY.
  • Online alcohol sales across grocery channels (online sales made by supermarkets, warehouse clubs, supercenters, and grocery stores sales through Instacart) was $87 million in 2017. This sales value has more than tripled within the past two years and is now worth about $295 million. In 2019, online beer sales by grocery stores grew by over 120%, while the sales of alcoholic wine grew slightly less than 100% — the sale of spirits grew by about 150%.
  • One of the factors responsible for the growth of e-commerce sales of alcohol is the instant activation of "online alcohol programs" among grocery retailers. About 18% (200 locations) of Walmart offer alcohol delivery via e-commerce sales. Costco, the most significant wine retailer across the United States, is leveraging this trend and commenced online sales of alcohol in October 2019.
  • Another factor driving the rising sales of alcohol via e-commerce across the United States include favorable legislation relevant to online sales (via click and collect). Experts estimate that the fulfillment of alcohol purchases through the use of "click and collect" (or C&C, a hybrid e-commerce sales process) is legalized in about 39 states (where about 90% of the United States population resides). Third-party delivery is legal in about 30 states (home to approximately 80% of the residents of the United States).
  • Alcohol selling grocers like Walmart and Kroger are enhancing their e-commerce capabilities, while consumers of alcohol are getting comfortable utilizing such e-commerce channels. Consequently, alcohol brands will continue to experience a significant rise in sales made via online grocery. Online channels represent the only channels across the United States through which "alcohol sales are steadily growing."
  • According to Adweek, about 2,000 Walmart stores in 29 states now have alcohol available via their online grocery offerings. Online grocery is the most important driver of alcohol sales via e-commerce (online sales).

Labeling Transparency and Product Innovations

  • Trends affecting the United States alcohol industry (as published by the Spirits Business and ascribed to Nielsen) include labeling transparency as well as product innovations.
  • More transparency in labeling, as well as supplier product innovations, will be recorded in the alcohol industry due to consumer demand for transparency and their interest in health as well as well-being.
  • Labeling transparency in the alcohol industry is driven by the number of consumers demanding it. According to Impact Group, a recent Mintel reports states that about 33% of drinkers age 22-24 feel that menus should indicate the ABV for all types of drinks. In contrast, about 15% of drinkers aged over 31 years are interested in greater transparency in the labeling of alcohol.
  • The demand for transparency among consumers in the alcohol sector is driving brands to become innovative and more transparent. One of the brands leveraging this trend is Bud Light — the company recently took an innovative step and became the first beer brand across the United States to include its ingredients on its label and packaging.
  • Michelob Ultra Pure Gold is an innovative alcoholic drink "perfectly positioned to ride" the wave (trend) related to the demand for labeling transparency and product innovations in the United States alcohol sector. Michelob is the fastest-growing beer brand in the United States and has launched the premier "USDA-certified organic light lager" known as Michelob Ultra Pure Gold. The brand believes the innovations meet the needs of alcohol consumers with evolving needs.
  • One factor driving transparency in the alcohol industry is related to the fact that more consumers are getting interested and concerned about health and wellness and consequently expect transparency.

Lifestyle-Oriented Drinks

  • Trends affecting the United States alcohol industry (as published by the Spirits Business) include lifestyle-oriented drinks. Lifestyle-oriented drinks are becoming popular because they address consumer interests and routines.
  • A recent article credited to the San Francisco Chronicle states that beer companies understand the interest of their consumers and are pivoting their marketing strategies to reflect such interests, like health and wellness. Today, wellness beer leverages brews as "tools for athletic recovery," self-care as well as total physical optimization.
  • One company riding on this trend is the Sufferfest Beer Company, a subsidiary of Sierra Nevada Brewing Company. The company targets athletes by marketing its beers to suit their lifestyle (as recovery drinks).
  • Another company offering lifestyle-oriented alcoholic drinks in the United States is Dry Farm Wines (known as a Napa Valley company). Dry Farm Wines has wines that suites various lifestyles, including natural-, paleo-, keto-, and low carb-friendly lifestyles.
  • Natural wines, also known as "raw wines," are made with less processing and utilize fewer chemicals. They are less likely to give rise to hangovers and are becoming increasingly popular. The various options of alcohol that fit different lifestyles are becoming popular as brands "attempt to win millennials" who have more lifestyle choices when compared to older generations.
  • Several lifestyle-oriented drinks that promote wellness are trending in an unexpected industry (the alcohol sector) because several brands are trying to appeal to "wellness-obsessed millennials."
  • Gem&Bolt LLC (a company based in New Jersey, United States), uses an ingredient known as damiana in its beverages. It is one of the companies marketing its "booze" (alcohol) as a wellness drink to desperately capture the market. Gem&Bolt LLC claims its drink (infused with damiana) promotes overall sexual well-being among men and women (damiana is used to treat some symptoms of menopause and also treats premenstrual syndrome).

Research Strategy

Some trends impacting the alcohol industry have been investigated and those that appear across a plethora of resources identified. Trends published by reputable business magazines such as The Spirits Business about the United States are in the study. Additional insights to back up the identified trends are from RaboResearch Food & Agribusiness publications, Market Watch, Adweek, Pulse (Business Insider), and similar resources. The study considers insights identified as trends by credible resources, implemented by successful alcohol companies, and appearing across a plethora of resources as worthy of inclusion. Due to limited resources on specific to trends that are impacting the alcohol industry in the United States, trends published by companies in the United States are in the study (even where they do not reference any particular country).
Part
02
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Part
02

Seltzer Alcohol Industry Growth

The market size of seltzer alcohol (hard seltzer) across the United States is projected to triple between 2020 and 2023 to reach 281 million cases. "Over half" (more than 55%) of alcohol consumers in the United States drink alcoholic seltzer at least once weekly. Another prospect responsible for the rising sales of alcoholic (hard) seltzer sales attributed to "off-premise retailers."

Growth of the Seltzer Alcohol Industry

  • According to a 2020 Brew Bound publication, the market size (in volume) of alcoholic (hard) seltzer across the United States was about 82.5 million cases in 2019.
  • Between 2020 and 2023, the market size would triple to reach 281 million cases. This number of cases would represent a market size of $9.75 billion (calculated).
  • Some factors driving the growth of the seltzer alcohol industry are related to its low ABV, wide popularity, and convenient packaging.

Low Alcoholic Strength by Volume (ABV)

  • Alcoholic seltzers are made up mainly of water, which means a low calorie intake (usually 100 calories or fewer). According to Wine Intelligence, the little amount of alcohol by volume content of seltzers is one of the factors responsible for the surging market for hard seltzers.
  • Hard seltzer drinks are getting popular among young drinkers. An interview, including a 23-year-old male drinker, indicates that White Claw (an alcoholic seltzer) is one of the first drinks that goes-round at parties. One of the reasons given is that it is a low-calorie drink.

Wide Popularity and Consumption of Hard (Alcoholic) Seltzer

  • A Brew Bound publication analyzing the growth of the United States alcoholic seltzer market between 2020 and 2023 has noted that the consumption of hard (alcoholic) seltzer among Americans is increasing.
  • "Over half" (more than 55%) of alcohol consumers in the United States alcohol drink hard seltzer every week (at least once), at an average rate of 2.83 cans per drinking occasion.
  • According to Fortune, hard seltzer is becoming a mainstream drink during summer in the United States. One of the reasons for the rising consumption of hard seltzer is the "established popularity" of sparkling water. This popularity helps seltzer to capture a "meaningful corner of the alcohol" segment.

Convenient Packaging

  • According to Fortune, one factor driving the growing sales of seltzer across the United States is its suitable (convenient) packaging, which plays a vital role for Americans that often head to the beach or engage in barbecue activities.
  • Another recent publication by the Wine Intelligence reveals that one of the attractions and key drivers affecting the growth of the seltzer alcohol industry is that alcoholic seltzer mostly comes packaged in cans that are light, sustainable, convenient, as well as "Insta-friendly."

Conversion of Beer, Wine, and Vodka Drinkers

  • According to Business Insider, the transformation (conversion) of beer, wine, and vodka drinkers into hard seltzer (alcoholic seltzer) drinkers is one of the factors driving the growth of the seltzer alcohol industry.
  • According to Wine Intelligence, the attraction, which is one among three key drivers affecting the growth of the seltzer alcohol industry in the United States, is related to health-conscious drinkers across several demographics that are cutting down on "alcohol consumption."
  • About 37% of wine drinkers are actively cutting down the overall volume of alcohol they consume, with 57% of millennial wine drinkers intentionally moderating the amount of alcohol they consume.
  • This demand for "lower alcohol" consumption leads consumers to opt for alcoholic seltzer.
  • Hard seltzer appeals to health-conscious consumers that are turning "away from beer." While the sales volume of beer has kept declining in the United States, the CEO of Anheuser-Busch InBev, Carlos Brito, reveals that alcoholic seltzer is "here to stay."

Various New Brands and Flavors

  • According to Nielsen, the introduction of several new hard seltzer brands by new players and the introduction of more flavors play a significant factor in fueling the growth of the seltzer alcohol sector.
  • According to the Chicago Sun-Times, some hard seltzers brands introducing new products in the United States market and driving the growth of the seltzer alcohol industry include Bud Light and Corona.
  • The number of players within the hard seltzer segment will double in 2020. The sector will experience the addition of several products from big brewers as well as mainstream brands, spirit companies, and craft brewers.
  • The use of healthy ingredients and features, bolder flavors, heightened product development as well as innovations by alcoholic seltzer brands, like hard kombucha and hard coffee, will attract different types of consumers and drinkers.
  • A consequence of the sluggish growth in the sales of beer across the United States is that big brewers have started introducing their own hard seltzer brands, hoping to tap into this fast-growing trend. Some examples include Anheuser-Busch InBev, Constellation Brands, and Molson Coors Brewing.
  • With numerous flavors, alcoholic seltzer seems to have the upper hand as consumers gravitate toward flavor, which is "critical" to the growth of the alcohol sector.

Off-Premise Retailers

  • Off-premise retailers are among factors driving the growth of the seltzer alcohol industry.
  • About 90% of sales relative to hard seltzer are facilitated by "off-premise retailers."
  • One brand that has taken advantage of this trend is White Claw. It is a top-selling hard seltzer brand among off-premise retailers that dominated the alcoholic seltzer segment in July 2019, which accounted for about 55.5% of the weekly sales.

Research Strategy

The study included an investigation to uncover how the seltzer alcohol segment is expected to grow within the next three to five years across the United States. This strategy reviewed business news publications (such as Business Insider), wine industry publication, press releases, and website of alcoholic seltzer (hard seltzer) producers. A limited number of resources discuss statistics that cover the required insights by providing volumetric and monetary analysis. This strategy reviewed several resources, including a 2020 publication by Brew Bound, which revealed that the projected volume of hard seltzer would triple by 2023. The Brew Bound publications also listed some factors affecting the growth of the United States alcoholic seltzer market between 2020 and 2023. Uncovered insights were verified across several resources to be affecting the investigated industry. There was no analysis covering the projected growth in monetary terms for three to five years. The study assumes that "hard" drink is another term for "alcoholic" beverages.

Calculation:

According to Business Insider, 72 million cases of hard seltzer would be worth $2.5 billion by 2021 representing (2,500,000,000/72,000,000) = $34.7 per case.
Thus, 281 million cases in 2023 would be the equivalent of (34.7 * 281,000,000) = $9.75 billion. Assuming the price per case of alcoholic seltzer remains constant.

A limited number of resources have publicly analyzed the seltzer alcohol segment of the United States for a period of three to five years. Consequently, the study includes a few global resources that have examined the United States' seltzer alcohol industry. It also includes American publications analyzing the alcoholic seltzer sector. Some resources that explain the hard seltzer market in the United States (North America) up to 2025 are behind a paywall and were not accessed.
Sources
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