The popularity of hard seltzer has exploded in recent years. In 2019 alone, interest in the market increased by over 200%, and every year since 2016 interest has raised significantly. What was practically unheard of before 2015 will be a 2.5 billion dollar industry in years to come, with no limit on how much more market share the beverage could consume.

With this dramatic rise in popularity, many established alcoholic beverage brands and aspiring new brands alike have wondered how to tap into this lucrative industry. This warrants a look into how hard seltzer is currently distributed to grocers, restaurants, and convenience stores.

On-Premise vs Off-Premise

In the alcoholic beverage industry, distribution is divided primarily into two categories: on-premise and off-premise. On-premise refers to traditional outlets for alcohol to be sold and consumed, such as bars, breweries, restaurants, or clubs. Off-premise is simply anywhere else – whether that be grocery stores, convenience stores, bottle shops, or even online.

In 2019, the market of hard seltzer was pretty evenly split between on trade and off trade. 55% of sales were off-premise. Despite this relatively even split, on trade has been growing over time as more and more consumers drink hard seltzers in bars and restaurants. Many people are choosing to consume hard seltzer as opposed to traditional beer, wine, or cocktails. This is caused by a variety of factors, largely the perceived nutritional benefits hard seltzer supposedly offers when compared to more traditional options.

The coronavirus pandemic made a drastic cut in the rise of on-premise consumption, but as a percentage of all alcoholic beverage options, the category continues to climb.

As suppliers enter the market, distribution channels are being tested and reformulated.  There’s currently a lot of speculation around Coca-Cola’s Topo Chico brand. If Coke enters the alcoholic beverage market in the US, it’s unknown if they will leverage their existing supply chain or forge new agreements with beer distribution channels.

If Coca-Cola decides to use existing beer distributors, they’ll have a long list to choose from.  According to data from the Alcohol Tobacco Tax and Trade Bureau (TTB), there are more than 20,000 current licensed wholesale distributors. Of which, there are about 3,000 traditional beer distributors (2019 data).

Aiden Gentson
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