The growth momentum of hard seltzer continued through Q1 2021. Hard seltzer currently comprises about 20% of beer sales, with that share expected to rise proportionately with temperatures and outdoor activities.
The spring seasonal share of hard seltzer, in its short history, has spiked after cold winter months.
A recent survey of 1,029 adults who drink alcohol by UBS Evidence Lab was telling. That survey found that 42% of hard seltzer drinkers are drinking less mainstream light beer, as a result of their new-found drink. Wine was the other big loser to hard seltzer, with 43% in the survey saying they’re now drinking less wine and wine products.
In its fourth iteration, the recent survey by UBS, which happened in February 2021, indicated that an overwhelming majority of hard seltzer drinkers just like the taste. The data shuns other theories like it being more healthy or portable. 58% of respondents said “I like the taste” vs 32% answering “Healthier than other alternatives.” Respondents were able to choose more than more reason.
Hard Seltzer Brands Abound
“While hard seltzers from major beer brands are gaining share and have the advantage of their brand name, craft brands are also growing in share, particularly in their local or target markets,” said Liz Paquette, head of consumer insights at Drizly, the e-commerce platform that facilitates home and office delivery of hard seltzer, beer, wine, and spirits.
Retailers typically enjoy success by balancing inventory of national brands with local favorites. Convenience stores and grocers often will allocate 10-20% of their cold vault to small craft brewers with a local following.
“Allocating shelf space to craft brands often drives higher margins for retailers in addition to supporting smaller, innovative businesses in the industry,” said Paquette.
A strategy implemented by c-stores is to use place the recognizable eye candy (White Claw, Truly) prominently on end caps or coolers, but then include the higher margin premium brands for the aficionados and curious. “While many trends are pointing to consumers purchasing existing brands they know and trust,” says Danielle Kosmal, the VP of beverage alcohol at Nielsen, “there is also a subset of consumers that are willing to try new — or new-to-them — products.”
Sara Hillstrom, category at Anheuser-Busch, believes local decisions should be made by local managers. “When it comes to store execution, retailers are really the experts,” Hillstrom pointed out in an interview with Hard Seltzer News. “They know their shoppers and their business better than anyone else.”
Specialty Stores Selling Hard Seltzer
Strategy at specialty stores is quite different. Beer and wine specialty retailers emphasize quality and uniqueness over marketing. The product has to taste good.
“My decisions are based purely on taste,” says Jordan Abdul, manager of Kindred Spirits and Wine in Dallas. “You need a good enough product. If not, it’s going to sell quickly in the beginning, but as soon as customers have tried it, they won’t want it anymore.”
The top four brewers of beer in the US all now make hard seltzer. Anheuser-Busch (NYSE: BUD), Molson Coors (NYSE:TAP), Constellation Brands (NYSE: STZ), and Heineken all have entered the category via mainstay brands (i.e. Bud Light and Coors). But the companies’ investments in craft brewers have also included hard seltzer entries.
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