The COVID-19 pandemic changed many things, among them how we consume alcohol. In March of 2020, bars and restaurants in most areas were temporarily shut down – or at least heavily restricted to takeout business – as the pandemic forced consumers to shelter in place.

As a result, alcohol consumption moved from on-premise (restaurants or bars) to off-premise (purchased at a store and enjoyed from the safety of home). Demand for kegs dropped, while that of aluminum cans grew dramatically.

But thanks to vaccines and effects of herd immunity, life is starting to return to some semblance of normal. As bars and restaurants are permitted to re-open and return to capacity, what will the supply chain look like? And how does hard seltzer fit into the picture – and the bar cooler?

While demand for hard seltzer has generally been increasing since the category started gaining traction in 2019, Market Watch reports that sales in the spiked and sparkling segment have recently seen a slight dip.

“We believe the decline in regular consumers is driven by the gradual reopening of on-premise channels where hard seltzer is currently under-indexed vs. beer, wines and spirits,” analysts wrote.

“The impact of this channel shift may prove somewhat transitory as respondents in late May were eager to return to their pre-COVID behaviors/channels where hard seltzer has yet to establish a foothold. The easing in regular consumption correlates with the steady rise of intentions to dine out.”

Establishments that have been closed or limited to takeout over the past 15 months haven’t had a chance to catch up to the hard seltzer demand. The spiked seltzer segment has also grown exponentially in that time, as demand for lighter, better-for-you options remains strong.

As consumers are eager to return to such establishments and enjoy a drink on-premise, it simply isn’t on some menus yet. And places that do include spiked seltzer on the menu tend to stick to the bigger players in the game.

“While we continue to believe that over the long-term hard seltzer will under-index other alcohol categories in the on-premise, we expect that the dominant brands (White Claw, Truly) will command an outsize share of that opportunity,” UBS said.

“What’s more, we believe that high-density channels like sporting events and concert venues will be slower to return but will have greater hard seltzer penetration.”

But analysts expect this to change, and spiked seltzer sales to rebound. There is still plenty of room for the category to grow as the entertainment industry catches up to consumer demand, yet bottled and canned beers may need to learn to share cooler space in the bar of the future.

This begs the question – will we soon see more hard seltzer on tap? It would help bars meet customer demand while saving space. Yet on the other hand, pre-packaged drinks may be seen as more sanitary in the post-pandemic era we’re moving into.

Regardless of the format, hard seltzer is here to stay. Bars and restaurants would be wise to anticipate demand and add these lighter, low calorie options to their menus.

Erin Grafton
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