A recent study conducted by the Generation Lab, a polling and research firm based in Washington DC, found hard seltzer is perceived as “on the rise” among college students.

Contrary to claims made by the media in the wake of The Boston Beer Co. (NYSE: SAM) and Truly’s poor Q2 performance vs expectations, and subsequent stock dip last month, the new study suggests hard seltzer is still very much en vogue with a critical demographic.

As part of the survey, participating college students were asked to rank alcoholic beverage brands in terms of preference and brand perception. The thirteen alcohol brands ranked included various wines, beers and hard seltzers. Hard seltzer was the clear winner on many fronts. The bubbly beverage is changing the way young adults drink.

According to those surveyed, Mark Anthony’s White Claw, the #1 hard seltzer in the US by an overwhelming market share, was perceived as the “coolest” brand. Additionally, White Claw and Truly, which controls the second largest amount of the seltzer market, were both considered to be “on the rise.”

Beer Has its Place

Popular beer brands, such as Corona and Bud Light, were perceived as having more brand exposure than the other alcohol options in the survey.

The respondents’ exposure to the beer brands was mainly via advertising. However IRL (in real life), hard seltzers “are something respondents were increasingly seeing at parties and other social events,” explained the Generation Lab’s CEO, Cyrus Beschloss.

No demographic has its finger on the pulse of new trends more than Gen Z, and according to the college students surveyed, hard seltzer is becoming Gen Z’s drink of choice. Consumer trends and shopping habits changed drastically during the pandemic, and alcohol beverages were no exception to the rule.

Consumers were purchasing more seltzers and ready-to-drink (RTD) beverages than ever before while quarantining at home. Beer and other alcohol beverage categories experienced lagging sales while seltzers and RTDs skyrocketed into popularity.

Generation Lab Joins Others in Outlining the Opportunity

Beschloss, whose goal with the Generation Lab is to “add sharper texture, deeper definition and wider representation to youth research,” is not the only one who believes hard seltzer is here to stay. During a recent episode of Industry Focus, Motley Fool’s podcast, investment analyst Emily Flippen and senior analyst Asit Sharma both concluded SAM’s recent dip signaled the maturing of the market rather than its downfall.

Andrew Serwer, Yahoo Finance’s Editor in Chief, agrees. In a newsletter written last month entitled “Why hard seltzer is still America’s ‘it’ drink,” Serwer suggested hard seltzer is still growing and adjusting to post-pandemic changes in the market. He noted the beverage category’s untapped global potential as a reason for its continued growth and discussed the saturation of seltzer brands on shelves, as well as impressive pandemic stock performances during the pandemic, as a reason for SAM’s recent underwhelming numbers.

It is worth noting that Anheuser-Busch (NYSE: BUD), Diageo (NYSE: DEO), and Molson Coors all finished their most recent quarters with strong performances.

Meanwhile back on campuses, some students, if not most, have spent the bulk of their time in college adapting to the reality of the pandemic–virtual learning, quarantining in their dorms or at their parents’ homes and not being able to enjoy bars or venues. In fact, many students turned 21, or legal drinking age (LDA), in quarantine. It is not surprising that their drinking habits have changed to reflect larger pandemic trends as well.

Beschloss clarified that the drinking trends of the college aged community “are changing in a way that seems relatively permanent, and they’re going to stay with seltzer.”

Shirani Jayasuriya
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