Hard seltzers: trends and market expansion
Having made their mark in the US initially, hard seltzer brands are expanding, geographically and in terms of styles.
*This feature was originally published in the May 2022 issue of The Spirits Business magazine.
An inherently trend-led category, rooted in both wellness and convenience, hard seltzers are particularly well suited to adapting to emerging trends too, and creating some of their own.
Seemingly arriving from nowhere, hard seltzers have taken the US by storm, led by brands such as White Claw, but with many others competing for market share, from start-ups to brands backed by the world’s biggest drinks companies.
As hard seltzers continue to grow in the US, and gain a footing further afield, the category is evolving too. While 2020 may have been a tough year for many drinks categories, hard seltzers had nothing to complain about.
According to IWSR Drinks Market Analysis, global volumes grew by 137%, with value rising by 154%.
The IWSR’s predictions for the category from 2021-2025 are a bit more modest, at 16.1% and 16.5% compound annual growth rate (CAGR) for global volume and value, respectively.
US-based Grand View Research is more optimistic, predicting CAGR of 31.4% in global volume between 2021 and 2028, taking the market to US$49.4 billion by then.
As a category that responds to trends so effectively, hard seltzers are evolving to maintain this kind of growth, enter new markets and win over new consumers.
With low-calorie content at its core, hard seltzers have always benefited from wellness trends, and this looks likely to extend to lower-ABV offerings too, with Grand View predicting the highest growth rate for brands below 4.9%.
Moderation continues to be a growing factor for consumers, a trend that has accelerated as a result of the pandemic.
This could lead to more product ranges like that of Beavertown Brewery in the UK, whose Ghost hard seltzers launched in late 2021, with a choice of four ABVs, ranging from 2.5% to 8%.
White Claw, too, has also been experimenting with ABV, from the launch of its 70 range, with 3.7% ABV and 70 calories per can, to Surge, launched in the US in 2021 with an ABV of 8%.
For Thiago Zanettini, global vice-president of beyond beer, craft and specialties at Anheuser-Busch InBev, the effect of wellness trends on the category is evident.
“We currently have the number-one position in Mexico with Michelob Ultra Hard Seltzer, where the segment is expanding due to influence from North America and growing health and wellness trends,” he says.
There are other avenues for the category to explore when it comes to wellness, not least highlighting that hard seltzers are gluten free, for example.
But there are those exploring added functional benefits, much like the flavoured seltzers that came before them.
Sweet Water Brewing Company in the US is among these. Its point of difference when it launched its Oasis hard seltzer range at the start of 2021 was the addition of electrolytes, as well as antioxidants and vitamin C from superfruits – targeting what it calls the “adult recess” occasion.
Molson Coors joined the trend around the same time, highlighting “antioxidant vitamin C from acerola superfruit” when it launched its Vizzy Lemonade Hard Seltzer range.
If the flavoured seltzer category is a predictor, then there’s an argument for CBD hard seltzers to be the next big thing, tapping into the functional ingredient’s popularity, and subsequent uptake by flavoured seltzers.
This poses a challenge for US-based hard seltzers, where the Alcohol and Tobacco Tax and Trade Bureau does not allow for alcoholic CBD products, but is less of a concern elsewhere.
London bar Behind This Wall, for example, includes 15mg of CBD in one of its hard seltzers, Fo’ Swizzle, which it describes as a spiced rum and hemp seltzer.
England’s Glen Affric Brewery lists a range of 4% ABV hard seltzers with CBD on its website as “coming soon”, as well as “harder seltzers” at 7.4% ABV.
Beyond wellness, a major driver of growth and innovation within the hard seltzer category is flavour.
“Consumers are leaning more and more into flavours as a main driver of the category,” confirms Zanettini of Anheuser-Busch InBev.
“We are also bringing more offerings that elevate the consumer experience with real juice and other ingredients,” he adds, highlighting the company’s Nutrl brand, with fruit juice and vodka, and Michelob Ultra Organic Seltzer Essentials, with coconut water and real fruit juice.
“We definitely see a movement towards full-flavour seltzers. Liquid innovation has evolved to a point that there doesn’t have to be a trade-off between flavour and better-for-you credentials,” continues Zanettini.
“Also, real spirits are contributing to growth, opening the door for even more innovation.”
The combination of full flavour and real spirits is reflected in the number of cocktail-inspired hard seltzers to hit the market recently, in line with the growth of the RTD category generally.
Brands have been introducing low-calorie versions of classic cocktails to the hard seltzer category.
This has led to a number of recent vodka Spritz launches from various major players, including Diageo’s Ketel One Botanical Vodka Spritz and Cîroc Vodka Spritz, tapping into the established popularity of hard seltzers.
The latest from Coca-Cola’s Topo Chico, meanwhile, is a range of Margarita-inspired hard seltzers in a variety of flavours, including Tropical Pineapple and Prickly Pear.
The releases come not long after the brand’s recent foray beyond the category’s standard slim can format, with the introduction of glass bottles.
It seems that the rapid evolution of hard seltzer is the category’s one constant.
UK hard seltzer market
Given the runaway success of hard seltzers in the US, it was inevitable that producers – both new and established – would soon set their sights on the UK.
It’s now the fourth global market for the category, according to IWSR Drinks Market Analysis, after the US, Canada and Australia.
But since the first brands began to emerge in 2019, hard seltzers have faced challenges specific to this market.
For a start, the UK wasn’t already awash with non-alcoholic flavoured seltzers in the way the US was, and nor was the term ‘seltzer’ in common use, let alone ‘hard’ as a descriptor.
And while moderation and wellness trends have been consistently on the rise on both sides of the pond, the way these manifest varies between these markets.
But the category has persisted, and continues to grow, in terms of awareness, the number of brands, and volumes sold.
Kopparberg was early to the party, unveiling its Balans brand (without the term ‘hard seltzer’) in January 2019, and doubling down with a trio of Kopparberg Hard Seltzers in 2020.
US brand Mike’s arrived in late 2019, around the time that startup Bodega Bay launched, and subsequently landed a distribution deal with Molson Coors. Another UK start-up, Drty, was one of those early entrants, launching in October 2019.
“The category was slightly overhyped initially,” says Drty founder Oli Clements. “A lot of people expected instant success and volume comparable with the US, and it takes time to build a category, but ultimately hard seltzers tap into some key macro trends around convenience and better-for-you.”
There have been plenty since those initial entrants. Perhaps the most anticipated was the brand that has led the category in the US – White Claw.
June 2020 saw the brand make its first foray outside of the US and Canada, with listings in Morrisons and Sainsbury’s in the UK. Brewers, spirits brands, start-ups and more have since all joined the fray, and there’s a real sense of optimism in the category.
“The future is bright for hard seltzer in the UK,” says Clements, who believes the upcoming summer without Covid restrictions will be a significant boost to the category. “The focus for us still remains around establishing the category – plenty of consumers in the UK still haven’t tried hard seltzers.”