Alcoholic Seltzer Trends

Part
01
of two
Part
01

Alcoholic Seltzer Trends: Current

Some of the biggest trends in the alcoholic seltzer category include the introduction of new hard seltzer flavors; the rise in acquisition of hard seltzer firms by major beer brands; and the increase in hard seltzer sales over major craft beer brand sales. These trends in the hard seltzer segment differ from the broader alcoholic beverage industry because they are recently introduced, offer multiple flavors, have proven health benefits, and feature higher growth in the last two years.


INDUSTRY OVERVIEW

  • Truly, White Claw, Bon & Viv Spiked Seltzer, and Henry's are the four biggest alcoholic seltzer brands in the US.
  • The hard seltzer segment grew by 185% over last year (as of May 2019).
  • Overall, the malted beverage industry (which includes hard seltzer) grew by 0.9% from 2018 to February 2019.
  • As of December 2018, hard seltzer sales were $488 million for the 52-weeks period, and sales are projected to reach $1 billion by the end of 2019.


INDUSTRY TRENDS

  • Hard seltzer is rising significantly in popularity, primarily due to low-calorie servings (less than 100 calories), health-conscious attitudes of consumers, and low alcohol by volume content (ABV).
  • The popularity of hard seltzer has led the companies to introduce multiple new flavors and light alcoholic fruit concoctions to appeal to more consumers.
  • Hard seltzer is a direct competitor to rose and sparkling wines; this summer, it is expected to dominate shelves with the introduction of new rose-flavored hard seltzer.
  • Numerous large-scale beer companies have either made investments into the hard seltzer segment or are producing their own brands of hard seltzer. (source 6)
  • Some notable brands by large-scale beer companies include the purchase of Bon & Viv Spiked Seltzer by Anheuser Busch in 2016, Truly by Boston Beer Co; and Henry's by Miller Coors Brewing Co.
  • There is a clear indication that hard seltzer has taken over the low ABV market, and has impacted the beer sales. In 2018, the beer sales remained flat at -0.7%, while flavored malt beverages (FMBs) including hard seltzer, witnessed a net growth of 10.2%.
  • Alcoholic seltzers have also shown to impact the sales of craft beers; further, the sales of White Claw surged past nearly every craft beer sold in the United States.
  • The alcoholic seltzer segment registered significant sales during summer as indicated by surges in sales in Q3 of 2017.
  • A majority of hard seltzer consumer (53%) belong to the beer-drinking segment; hence, it indicates that people who drink beer are more likely to purchase hard seltzer or would eventually shift to the segment.

DIFFERENCES FROM THE ENTIRE ALCOHOLIC BEVERAGE INDUSTRY

  • Hard seltzer is a combination between seltzer (a flavored carbonated drink) and fermented sugars (malts); while most other alcoholic beverages are fermented from other natural sources.
  • Alcoholic seltzer has multiple fruit-based flavors, which is relatively uncommon in other alcoholic beverages like beer, wine, and other spirits.
  • An increasing acceptance trend of alcoholic seltzer is the relative health benefits that the beverage has over beer and wine, and other low ABV drinks. Most alcoholic beverages have over 200 calories per serving, while hard seltzer averages around 100 calories or fewer.
  • The substantial sales growth of alcoholic seltzer vastly differs in comparison to other low ABV beverages like beer and rose wine. The 193% rise in sales is unmatched, compared to any other beverage in the last two years.


RESEARCH STRATEGY

We compiled this research by studying numerous credible sources like industry magazine publications, business publications, and food & lifestyle magazine publications. We started our research by focusing on the main trends of hard seltzer in the United States in the last two years. We were able to obtain several resources that corroborated similar findings; it helped us to ascertain the major trends in the segment. Next, we tried to uncover the major brands within hard seltzer and how the beverage became immensely popular in the past two years.

In our research, we found that one of the major alcoholic seltzer trends is the impact the beverage had on beer sales during summer months, which was noted across multiple industry news sites and publications. These trends are likely to exist because of the health benefits of hard seltzer like low calories, sugars, and alcoholic content. An analysis of advertisements from major beer companies, including Anheuser Busch and MillerCoors, has shown significant support towards these trends by the key players.

Part
02
of two
Part
02

Alcoholic Seltzer Trends: Historical

Alcoholic seltzer was first formulated and introduced in 2012 by Spiked Seltzer. Since then, tremendous growth in the alcoholic seltzer market has been spurred by changing trends to make this beverage as appealing to as many consumers as possible.

From Soda to Seltzer to Spiked Seltzer

A Healthy Beverage Choice

  • Alcoholic seltzers have increasingly been advertised as a healthy alternative to other alcoholic beverages because they are lower in calories, carbohydrates, and sugars.
  • Within the last few years, alcoholic seltzers have been advertised as a healthy alternative to other alcoholic beverages because they are gluten-free and have lower alcohol content.

Natural Flavors

  • Alcoholic seltzer companies have increasingly marketed their beverages as having natural flavors to appeal to health-conscious consumers.
  • Alcoholic seltzer companies increased the number of flavors that they offer to appeal to consumers who like to have variety in their natural flavors.

Variety Packs

  • Alcoholic seltzer companies have increasingly offered variety packs to consumers that include a wide range of flavors in one pack to meet consumer demand.

Convenience

  • Alcoholic seltzer companies have increasingly offered convenient disposable packaging for active consumers who are on the move.
  • Alcoholic seltzer companies have also specifically offered alcoholic seltzer alternatives to popular drinks like vodka sodas in more convenient packaging.

As Mixers

  • Alcoholic seltzer companies have increasingly marketed their seltzers as mixers, thus adding flavors without calories or more sugar to cocktails.

Broad Appeal to Both Men and Women of All Ages

Research Strategy

We researched multiple credible sources in the beverage industry like Chowhound and SevenFifty Daily. There, we found that alcoholic seltzer was not first formulated or introduced until 2012, thus creating only a seven-year historical trend. We were not able to find any sources that dated alcoholic spritzer as being formulated or introduced before 2012. Alcoholic spritzer companies have focused on appealing to health-conscious consumers with active lifestyles who are seeking better- for-you alternatives to traditional alcoholic beverages. Our research repeatedly confirmed that alcoholic spritzer companies have expanded this main trend over the past seven years to appeal to as many consumers as possible by adding variety, convenience, and versatility to alcoholic spritzers.
Sources
Sources

From Part 01
Quotes
  • "As drinker tastes have changed and consumers increasingly become more mindful about their health and wellness, low-calorie, low-carb, gluten-free hard seltzer has taken on a prominent role in the months between May and September, right alongside beer."
Quotes
  • "Within FMBs, hard seltzer drove much of the growth and now makes up 1.3 percent of total beer category dollar share, Nielsen reported."
Quotes
  • "That surge has made White Claw a top-25 brand among beers (how flavored malt beverages are typically tracked), zooming past stalwarts such as Rolling Rock, Guinness, Pacifico, Corona Light and every single craft beer"
From Part 02
Quotes
  • "One day in 2012, Nick Shields was sitting in a dive bar in Westport, Connecticut called the Black Duck when he made a simple observation that would change his life. "I saw five women order vodka sodas, one after the other," he recalls."
  • "So as Shields sat at the bar, the vodka-swilling women became his muse to create something entirely new: a drink that was as light as vodka but rooted in beer-making methods. What emerged after plenty of trial and error was the first-ever spiked seltzer, made with fermented sugar rather than malted barley."
  • "He named it, easily enough, SpikedSeltzer, and the rest is carbonated alcohol history: Sales skyrocketed, copycats followed, and Shields in 2016 sold the brand to Anheuser-Busch InBev, which took it national last summer."
Quotes
  • "As for where the idea for hard seltzer came from, we have the increasing popularity of non alcoholic carbonated water to thank. American demand for sparkling beverages is rising, especially for those served in a can. And there’s a reason why both traditional seltzer water and hard seltzer is so popular in the Northeast. Non-alcoholic seltzer got its start in Jewish neighborhoods on Manhattan’s Lower East Side and some of the most popular brands (e.g., Polar Beverages) are made in New England."
  • "So, why did it take so long for someone to invent alcoholic seltzer? Despite the fact that carbonated water has been around for centuries, the first hard seltzer was only introduced in 2012 by Spiked Seltzer (now known as Bon & Viv Spiked Seltzer)."
Quotes
  • "Nick Shields, considered the creator of the first hard seltzer, combined beer-making techniques and aimed for the lightness of vodka, substituting fermented sugar for malted barley. The name SpikedSeltzer was a natural choice for Shields -- about as easy as Anheuser Busch InBev's decision to buy the company four years after its 2012 inception."
  • "At least a dozen brands offering more than 20 flavors followed SpikedSeltzer to market."
  • "The hard seltzers are an adult version of the increasingly popular sparkling water category. "
  • "While some spiked seltzer brands target female audiences, others focus on the broad appeal of a "better-for-you" product that has lower ABV than liquor along with low calories and carbs and no added sugars."
  • "Popular with consumers who like wine and clear spirits, spiked seltzers are also marketed as mixers, adding flavors without calories to cocktails."
Quotes
  • "The hard-seltzer brands arrive at a time when consumers are increasingly in tune with their health and what they're putting in their bodies, from food to alcohol."
  • "Hard-seltzer products tend to promote their natural flavors, low calories and lack of gluten."
Quotes
  • "The rise in popularity of hard seltzer has been fueled by the recent trend toward more health-conscious drinking habits and a preference for low-alcohol beverages."
  • "“Hard seltzers have positioned themselves at the nexus of convenience and health,” says Caitlyn Battaglia, a client manager based in Roanoke, Virginia, who works in the Beverage Alcohol Practice Area of The Nielsen Company. "
  • "Battaglia says that “hard seltzer appeals more equally to men and women” than beer, which she notes tends to be “a male-dominated category.”"
  • "Spiked seltzers are gaining in popularity because they’re lower in alcohol and calories than anything else on the market."
Quotes
  • "Hard seltzer capitalizes on a several popular trends. One is seltzer itself."
  • "People like flavor and they like diversity, and they like both those things in their hard seltzer: Nielsen says variety packs account for 65% of hard seltzer sales."
  • "And then there are issues of health and wellness. Hard seltzers fit seamlessly with the trend. They’re generally low in calories, sugar and carbohydrates and often gluten free. Most are between 4 and 5 percent alcohol, about the same as light beer. The industry has settled on an archetype that seems to be effectively telling the story: tall, slim 12-ounce cans with a predominantly white color scheme."
  • "Sandy Vox, assistant sales manager for the beer category at the Jewel-Osco supermarket chain, said she has been surprised by the number of men embracing hard seltzer. I thought it would be more women driven, but it’s 50-50."
Quotes
  • "Sales of seltzer have spiked in the last decade — so much so that now you can buy seltzer that’s …well, spiked. Non-alcoholic versions of bottled still and sparkling waters have been a growing business in the U.S. in the last decade, as sales of soda have slowed."
  • "The makers of White Claw hard seltzer said they think “clean labels” with all-natural ingredients are an important reason their product will succeed. They also pointed to the popularity of the traditional vodka soda cocktail, but said hard seltzer is a more convenient way to drink a similar beverage."