Is Hard Seltzer Here to Stay—or Will It Go the Way of the Wine Cooler?

For many casual observers and drinkers, hard seltzer seemed to come out of nowhere last summer. Sweeping across the country like a fizzy, buzz-making tidal wave, hot girl summer suddenly had an official beverage sponsor: White Claw. But for those in the industry or closely observing it, the rise of hard seltzer wasn’t mere happenstance—consumers were primed for the product. The fact that hard seltzer contains less alcohol than spirits and fewer calories than beer, while by widespread consensus also tasting pretty good, has kept people coming back. Now, brands both big and small are growing the category. New ad campaigns, product innovations and creative merchandise, like face masks that come with a straw-sized slot for the Covid-19 era, are generating attention. Retail sales have remained robust throughout the pandemic, which has ultimately hurt the alcohol industry. From the beginning of March to mid-July, off-premise sales of hard seltzer hit $1.66 billion, up 253% from the same time last year and more than the category produced in all of 2019, according to Nielsen. While retail beer sales during this period were much larger ($14.87 billion), the year-over-year increase was much smaller (12%). Hovering around 10% of total beer sales, hard seltzer looks to be more than just a flash in the pan, à la the wine coolers of the 1980s or '90s-era Zima. As more alcohol brands throw their hats into the hard seltzer ring each month, experts and brands alike are expecting the category to grow for at least a few more years, and to stick around for a lot longer than that. The category’s upward trajectory has attracted plenty of competition. According to Nielsen, 10 hard seltzer brands existed at the beginning of 2018. A year later, it was 26. At present, more than 65 different labels are available. Approximately half are under a completely new name (e.g., Vizzy Hard Seltzer from Molson Coors), while the other half leverage a preexisting beer brand name (e.g., Corona Hard Seltzer from Constellation Brands). [kickout id="3" label="pie chart"] During a July 1 earnings call with analysts, William Newlands, CEO of Constellation Brands, which makes both Corona the beer and Corona the hard seltzer, said the recent debut of Corona Hard Seltzer was a success in part because of its name. “We believe the refreshment attributes of seltzer combined with the halo effect of the Corona brand … provides an opportunity to build one of the strongest hard seltzer brands in our industry,” he said, noting that Corona Hard Seltzer quickly became the fourth-best-selling brand in the category. The health and wellness trend Over the past five to 10 years, consumer preferences have trended toward lower-carb, lower-calorie options in food and drink, and that's increasingly creeping into happy hour and weekend drinking. While light beers went part of the way toward meeting that need, a push for more transparency in ingredients and the paleo diet craze meant consumers were already reaching for exactly what hard seltzers would offer—often without knowing it. Wine and spirits consultant Arthur Shapiro said hard seltzer is fun and convenient but that the real driver is the product’s perceived healthiness. “I think that's all part of a growing concern about additives, flavoring and things of that sort," he said. Aside from certain light beers or niche alcohol products like Skinnygirl, most mainstream wines, beers and spirits don’t provide nutritional information on their labels. And for consumers motivated by the calorie, carb or sugar content, that can be a deciding factor at the liquor store, according to SipSource industry analyst Dale Stratton. “If I'm a consumer and I'm standing in front of this shelf, and here's White Claw that is very, very explicitly telling me how many calories I'm going to consume,” said Stratton, “and here are other products out there that have no information—if that's an important attribute to me, I'm choosing the one that tells me what's there.” Boathouse Beverage launched the first-known hard seltzer, called simply SpikedSeltzer, in 2013. Anheuser-Busch acquired the company in 2016—the same year White Claw, Truly and Smirnoff Spiked Sparkling Seltzer hit the market. But it took a couple years for the category’s growth to seriously take off. It all came to a head last summer when White Claw was extensively memed, contributing to a season of exponential growth for the category. The ironic internet treatment also allowed the drink to gain traction across gender lines as millennial men jumped on a bandwagon that had been previously thought of as reserved for more feminine drinkers. Chatter around the brand hasn’t dropped off, either. Between May and July 22, year-over-year White Claw mentions on Twitter increased 46%, according to social media analytics firm Sprout Social. (Amid the recent departure of Mark Anthony Brands’ svp of marketing, Sanjiv Gajiwala, the label declined to comment for this story.) But where does hard seltzer go from here? While it was initially perceived as a social summer drink, the category has continued to thrive amid the novel coronavirus pandemic and regardless of the season, continually exceeding sales predictions. [kickout id="1"] Brands continue to join the party After The Boston Beer Co. debuted Truly in spring 2016, Diageo and Molson Coors introduced their own version of the product within a year. Then came last summer’s hard seltzer craze, which prompted microbreweries and smaller companies to get in on the action in larger numbers. As the category’s popularity continues to explode, the big players have started doubling, tripling or quadrupling up on hard seltzer brands. Anheuser-Busch rebranded SpikedSeltzer as Bon & Viv (now Bon Viv) at the beginning of 2019 and then launched Natural Light Seltzer at the end of the summer. This year, it's added two more hard seltzers to its portfolio: Bud Light Seltzer, which has the strength of its most popular beer brand behind it, and Social Club Seltzer, which has a higher alcohol content and flavors based on classic cocktails like the Old Fashioned. [kickout id="2" label="timeline"] The expanded offerings embody the way Anheuser-Busch is approaching the seltzer category, according to the conglomerate’s vp of beyond beer, Lana Kouznetsov. Consumers now see the health benefits as a baseline for the category. The challenge for brands now, Kouznetsov said, is to figure out what else consumers are looking for and create a product that provides it. “If you, as a consumer, have your 10 occasions when you would drink a wine or beer or spirit, it's understanding: In how many of those occasions can a seltzer play?” she said. “How do you evolve seltzer to then be able to be present in those moments?” [kickout id="4"] After launching Henry’s Hard Sparkling Water, Molson Coors added a more niche offering this spring in Vizzy, a hard seltzer with antioxidant vitamin C. James Pietruszynski, CMO at brand strategy and design agency Soulsight, which partnered with Molson Coors to develop Vizzy, said they went with the color orange for the brand’s secondary packaging to not only help distinguish the product from the competition, but also to reinforce the idea of vitamin C. “Having a clear point of difference in the category is going to be crucial to break through and kind of add to this growing segment,” said Molson Coors marketing director for hard seltzers Elizabeth Hitch. As long as brands are finding ways to “capture new drinkers and occasions,” she said, there is room for significant growth. Quarantine created an unlikely opportunity for Truly to capture new drinkers. Young, legal-age drinkers who fled to their parents’ homes from shuttered colleges or apartments introduced hard seltzers to their families, according to Boston Beer Co. CMO Lesya Lysyj. [kickout id="5"] Truly also benefited from its pre-pandemic popularity as shoppers leaned on the brands they were more familiar with. Recently, The Boston Beer Co. reported that net revenue soared 42% to $452.1 million for the quarter ending June 27. Smaller breweries and brands are jumping in, too. Crook & Marker, started by Bai Brands founder Ben Weiss, touts its organic ingredients and zero sugar. It also benefited from a spike in popularity this summer after its TasteMasks, face masks with a straw hole, went viral. Could hard seltzers go the way of the wine cooler? While in some ways the hard seltzer craze feels completely unprecedented, in other ways, it's similar to past beverage fads—notably, wine coolers. The lighter, wine-based fizzy drink was developed in the early 1980s and had caused quite a stir in the industry by the middle of the decade. But by the end of the '80s, demand for wine coolers had slowed, and a 1991 increase in the alcohol excise tax sealed the deal. Wine taxes jumped fivefold, and a wine-based mix was no longer an easy way to turn a profit. But Shapiro thinks things will be different for hard seltzers. For one thing, seltzers are less gendered and therefore less pigeonholed, he said. And with so many big brands putting their innovation and marketing budgets behind the idea, the momentum isn’t likely to fade anytime soon. (In fact, the maker of Bartles & Jaymes wine coolers, E. & J. Gallo, recently jumped on the seltzer train.) Most experts and brands agree it's unlikely seltzers could ever replace wine, beer or spirits completely, but there are a lot of good indicators that the drink is going to stick around longer than wine coolers (or Zima) did. They've seen wider adoption, and every big alcohol conglomerate now has skin in the game. Molson Coors decided recently to "hibernate" its Saint Archer Gold beer brand while ramping up hard seltzer production capacity by 400%. In addition to Vizzy, it's preparing to release a Coors Light Seltzer, following in the footsteps of Anheuser-Busch and Constellation Brands with a seltzer named after its popular light beer. While all these brands are fighting for second or third place behind runaway leader White Claw, any piece of the pie seems worth chasing when the category has been consistently growing by more than 200% year over year. That kind of momentum from the big-name brands just wasn't there during the wine cooler era, according to Shapiro. "None of the beer people went into wine coolers in those days; they were all independent companies," he said. And while it's impossible to know whether the decision-makers at the big conglomerates predicted the hard seltzer boom or if they're simply creating the momentum by opening up their pocketbooks, there seems to be enough money and enthusiasm for several more hard seltzer summers, winters and seasons in between.