Old Bar Habits

Will canned cocktails be the future of on-premise consumption?

As cities and states begin to ease pandemic restrictions, bars and restaurants across the country find themselves navigating uncharted waters. The world has changed dramatically over the past year and so have consumer drinking habits.

Hard seltzers and ready-to-drink canned cocktails (RTDs) were the unofficial beverages of quarantine. The drinks became so popular over the past year that they single-handedly shifted the entire industry’s focus.  Industry stalwarts are finding profit streams in unexpected places.

Beyond popularity, hard seltzers and canned cocktails can simplify and streamline bar duties for post-pandemic venues. Embracing the hard seltzer and RTD movements will be crucial for the Bar of the Future. 

Growth of the Category Continues

The hard seltzer market grew to nearly $3.8 billion this past year and is projected to hit $11 billion by 2027.  In 2020 alone, ready-to drink beverages, including hard seltzers, canned premixed spirit cocktails, and wine spritzers, saw a global sales volume increase of 43%. 

With on-premise beer sales lagging dramatically due to quarantine regulations and self-imposed social distancing, even the biggest names in brewing leaned on hard seltzers and RTDs to compensate for lost revenue.

Boston Beer (NYSE: SAM) reported suffering declines in depletions in three of their five major brands-Samuel Adams, Angry Orchard and Dogfish Head. However, the company’s hard seltzer brand, Truly, saw a more than 147% increase in sales while their RTD beverage, Twisted Tea, saw a 32% increase.

Major players, like Anheuser-Busch (NYSE: BUD), are expanding production to keep up with consumer demands for hard seltzer. The company, which produces Bud Light Seltzer, recently announced plans to invest $1 billion back into their US manufacturing facilities. 

The hospitality industry was already beginning to see the rise of hard seltzers before the pandemic. Nielsen reported that between the spring and fall of 2019 consumers drinking hard seltzers at on-premise locations (bars and restaurants) increased by 73%. 

The alcoholic beverage industry is preparing for hard seltzers and RTDs to be a mainstay long after the pandemic ends. Why are these beverages a smart choice for post-pandemic bars and restaurants? 

RTDs are Safer

Canned beverages are more sanitary than glasses and require less touching. Glasses need to be sanitized between uses and are often need to be handled by dishwashers, barbacks and bartenders before they end up on your coaster.  Bottle pourers, ice scoops, and various mixing ingredients all represent potential for contamination.

Plus, glasses break, leaving a hazardous mess for patrons and staff and added clean up.

The trend is spilling over into other areas of hospitality, simplifying the process and minimizing touchpoints.  Delta just introduced Tip Top canned cocktails to their in-flight menu, offering a safer and more streamlined alternative to mixing drinks on the spot. 

Cans are Mini Billboards

Canned drinks are easier to store and can create advertising opportunities. A canned Mai Tai can be simply stacked and stored in an average bar cooler but mixing a made-to-order Mai Tai requires ordering and storing five or more ingredients.

Additionally, coolers can be sponsored or branded by products looking to advertise in venues. More space for advertising means added revenue for bars of the future and added marketing for brands. 

Cans are Portable

To-go drinks have become more popular. Many local governments have amended their laws, allowing venues to serve to-go drinks with take-out and delivery orders.

Canned beverages, like hard seltzers and RTDs, allow for easy (and sealed) transportation and decrease the need for plastic cups — a win for both the environment and venues looking to reduce the amount of supplies they need to order.

Better for All

Consumers want products that align with their health and lifestyle goals. Hard seltzers are low in calories and often contain little to no carbs or sugar. Many varieties are gluten free as well. For instance, a 12 ounce can of White Claw, the most popular hard seltzer on the market, contains 100 calories, 2 grams of carbs and 2 grams of sugar.

Whereas, an average IPA of the same size can contain more than 200 calories and mixed drinks can contain a large amount of sugar and carbs depending on how/where they’re made. Canned beverages provide a consistent experience and clear ingredients every time. 

Hard seltzers and ready-to-drink cocktails are in demand now more than ever before. As bars and restaurants begin to reopen, venues and brands hope consumers will continue choosing hard seltzers in on-premise locations the way they did while quarantining.

Shirani Jayasuriya
Latest posts by Shirani Jayasuriya (see all)