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Hard Seltzer becoming a ‘lifestyle choice’
September 29, 2020
Hard Seltzers have become the fastest-growing category of alcoholic beverage in the US with current sales outselling vodka. Now they’re here in Ireland. Drinks Industry Ireland takes a look at the phenomenon.
Hard Seltzers have become the fastest-growing category of alcoholic beverage in the US with current sales hitting 85 million nine-litre cases there – more cases than vodka. So what are hard seltzers? Best defined as hard sparkling waters or sparkling water that contains alcohol, they appear to have a number of advantages over traditional alcoholic beverages. For a start they’re equally popular with both men and women and their appeal seems to cross all age groups and demographics, something that doesn’t happen often in the alcoholic beverage arena. Their popularity has been a tremendous engine for growth in the Ready To Drink market in the US, with Millennials continuing to gravitate toward the category. Their meteoric rise has made this ‘new’ category one to watch over the past year. The hard seltzer category is currently valued at over $2.5 billion, with total US sales of hard seltzer up by over 240% last year and now accounting for nearly half of all mixed drinks consumption in the US. As for on-trade consumption, Hard Seltzer is now popular enough to be served on draught in US bars and pubs, states a comprehensive new Hard Seltzer Report from IWSR Drinks Market Analysis. IWSR, the leading source of data and intelligence on the global alcoholic beverage market, forecasts that consumer interest in this category will only continue to grow. “Led by the brands White Claw and Truly, Hard Seltzer volume in the US is currently about 82.5 million nine-liter cases,” states IWSR which forecasts that by 2023, the category will more than triple to reach over 281 million cases. And according to IWSR, by 2022 Hard Seltzers will outsell both vodka and whisky volumes combined in the US. At the beginning of 2018 just 10 brands of Hard Seltzer could be found slugging it out on the US market. This jumped to 26 only a year later. Today, 65 brands do battle in this extremely lucrative market about half of which sell under the moniker of being a brand extension to an already extant beer brand. For the third consecutive year Ready To Drink products were the fastest-growing beverage alcohol category in 2019, up 19.6% in volume and 18.8% in value. Even though RTDs only represent a small slice of the beverage alcohol market they contributed more than double the value growth to the industry than wine did in 2019. The Ready-To-Drink market is therefore poised for continued growth with Hard Seltzers. Nielsen forecasts the global RTD category to grow by 7.2% in volume Category Annual Growth Rate between 2019 and 2024. Much of the interest and growth in this category is fuelled by the innovation and convenience of Hard Seltzers. Hard Seltzers are taking share from all other categories in the US and are forecast to have a much higher volume CAGR of 20.9% from 2019 to 2024 according to Brandy Rand, IWSR’s Chief Operations Officer in the Americas. What’s most interesting about the evolution of the Hard Seltzer category is that it has quickly become a lifestyle movement in the US. “Hard seltzers are far from a fad” she says, “they’re growing at a spectacular rate and increasingly, Hard Seltzer producers are pulling consumers from other beverage alcohol categories, not just beer. “Combined, Hard Seltzers and other canned Seltzer-like products (vodka soda as an example) will drive the total Ready To Drink category, making it the fastest-growing beverage alcohol category in the US over the next five years.” IWSR’s consumer opinion and attitude study about Hard Seltzers found that over half (55%) of US alcohol consumers surveyed drink them regularly at least once a week. Consumers cited ‘refreshment’ as the most appealing Hard Seltzer attribute. “The rise of Hard Seltzers shows there was a segment of consumers underserved by the current beverage alcohol market who were looking for alternatives that were refreshing and flavourful, but also low-calorie and low-sugar,” adds Brandy Rand, “These products also meet the growing consumer demand for convenience and appeal to people that enjoy popular cocktails like the vodka soda and wine spritzers. We definitely expect to see more brands taking advantage of this fast-growing trend.” Consumers there can now choose from traditional Hard Seltzers, cider seltzers, wine seltzers, spritzers, spirit-type seltzers and more. Wine and spirits companies are launching seltzer-like products to compete in this growing segment too as Hard Seltzers prove to be a year-round category and – prior to Covid-19 – were rapidly moving into on-premise accounts. IWSR has also just released a comprehensive bartender study conducted across the US that examines trends, most-mentioned brands and consumer preferences. The IWSR US Bartender Strategic Study research found that consumers are increasingly turning to fizzy drinks such as Hard Seltzers, spritzes and spirit & soda cocktails in bars and restaurants. AC Nielsen predicts that Hard Seltzer’s share of the total US beer/“Flavoured Malt Beverages”/cider market could reach 15% before the end of this Summer. Hard Seltzer demographics Millennials form a core demographic for Hard Seltzers according to AC Nielsen. There’s no doubt that Hard Seltzers in the US benefitted from the Lockdown as consumers there purchased more of it every week in quarantine from the week ending March the 21st onwards than was spent during its previous dollar-spend peak ending July the 4th 2019. RTDs and hard seltzers are likely to have continued performing well through the pandemic thanks to their “on-the-go” format and as restrictions on the market start to ease in countries like the UK and Ireland, IWSR predicts that Hard Seltzers are likely to see the highest growth rate within the UK’s RTD category, forecasting a volume CAGR of 71.7% from 2019 to 2024 albeit from a small base in absolute volume terms. Hard Seltzers in Ireland With the increase in the number of Hard Seltzer offerings in the UK and Ireland consumers can take the opportunity to taste-test this market variety, possibly resulting in softer individual brand sales than would have been hoped for initially for the Hard Seltzer category in the coming year, states Nielsen CGA in its ‘10 market-moving trends’ to be aware of this year. In Ireland, Hard Seltzers have only recently launched into the market and in the 12 weeks to the 12th July the Nielsen Scantrack (including Specialist Off-Licences) recorded off-sales of 18,800 nine-litre cases worth about €1.65 million. To put this in context, Champagne sales for the same period were €1.8 million, so the potential remains huge. The number of players in the Hard Seltzer space will double in 2020 states Nielsen, with products entering from big brewers/mainstream brands, craft brewers and spirits companies. Additionally, Nielsen predicts that we’ll see an increase in sub-segments of Hard Seltzers focused on attributes like higher ABV, healthy ingredients, bolder flavours and heightened product development. These options won’t make as-big-a-punch as those leading Seltzers on the market today but they will attract a different type of consumer/drinker. White Claw White Claw Hard Seltzer, America’s most successful new alcohol brand in a generation, landed back on Irish Shores in June because White Claw Hard Seltzer was actually developed here, so this launch has an extra special place in the hearts of the team at White Claw’s Dublin-based Head Office. White Claw pioneered the Hard Seltzer category in the US and is now the No 1 brand in a category worth over $2.5 billion, with over 50% market share. Putting it in perspective, in the US off-premise, White Claw Hard Seltzer is now bigger than both Budweiser and Corona in Dollar sales. It also has a higher household penetration than most of the biggest beer brands in US. The success of the brand has been led by a clear understanding that consumers are demanding products that complement their active and more balanced lifestyles. White Claw Hard Seltzer is made from the finest natural ingredients: a blend of sparkling water, gluten-free triple-distilled spirit and a hint of natural fruit flavour. Each 330ml can contains 95 calories, 4.5% ABV and 2g carbs. For more information, visit www.whiteclaw.com. E&J Gallo Barefoot Hard Seltzer Q&As with Mark Stammers, Sales Director, UK & Ireland
In the US, Hard Seltzers have become the fastest-growing segment of the alcohol market – why do you think this is the case?
Hard Seltzers tap into a number of key trends: they’re relatively low in alcohol (4-7% ABV), low in calories (typically less than 100 calories) and packaged in light, sustainable and eye-catchingly packaged cans that can be enjoyed at home or on the go. Consumers are increasingly looking to moderate their alcohol consumption and are looking for drinks that match their lifestyle without impacting on their fitness goals or missing out on social occasions. Light and refreshing, made with natural ingredients, Hard Seltzers are a healthier alternative to beers, wines and spirits.
What do you believe is the potential here for Hard Seltzers?
As in the US, consumers in Europe are looking for refreshing and lighter alternatives to traditional alcoholic beverages. The hard seltzer category is currently worth $1.5 billion in the US and could grow to reach $2.5 billion by 2021. Early indicators show that this success will be emulated in the UK. Made with sparkling water, white wine and natural fruit flavours, with 70 calories, 4% ABV and gluten-free, the Barefoot Wine Seltzer is one of the UK’s best-selling brands. Barefoot is instantly recognisable among consumers which is significant when it comes to driving trial of a new product within the portfolio.
Why should vintners be taking a serious look at their Hard Seltzer offering?
It’s hard to ignore the success of the Hard Seltzer category in the US where it’s currently worth $1.5 billion of which 47% is incremental growth to the Beer, Wine & Spirits category. Vintners need to keep a close eye on emerging trends to attract new customers and maximise their sales.
IWSR’s Research Director for Western Europe Humphrey Serjeantson believes that consumption of wine is declining in some countries due to the growth in other categories such as Hard Seltzers. What do you think of his comment?
The Hard Seltzer category is still small compared to wine and appeals to a relatively young sector of the market. Global trends suggest that consumers are cutting down on their consumption of alcohol generally but there’s plenty of room for different beverages.
What might surprise our on-trade & off-trade retailers about Hard Seltzers?
The Barefoot Wine Seltzer range is the only wine-based Seltzer range on the market. The range was developed in response to internal consumer research that showed that consumers preferred the taste of wine-based seltzers. Flying Flamingo Hard Seltzer The Irish Flying Flamingo hard seltzer has landed here in Ireland with the family-run Pearse Lyons Brewery & Distillery launching Ireland’s first Hard Seltzer. Only 90 calories and 5% ABV, Flying Flamingo Hard Seltzer is “a natural lifestyle brand that comes in two refreshingly crisp flavours:- Pineapple Punch and Peach Fizz”. According to the distillery/brewery, “With purity, balance & refreshment at its core, Flying Flamingo is naturally gluten-free, vegan-friendly and low calorie with a crisp fresh taste. “Bursting with rich fruit flavours and having the perfect amount of effervescence makes these a drink option of epic refreshment,” states the company. For more information contact your local Alltech or Comans representative. Loki & Co (where low is key!) launching in cans and introducing a new Strawberry & Lime flavour Loki & Co launched in 2017 and as such is Europe’s original Hard Seltzer. “When we launched it’s fair to say that we were way ahead of the market,’ said Stephen Dillon, Founder of RTM Beverages, the Dublin-based drinks innovation company, “We’re delighted that the category has finally taken off and interest has boomed, not only in Ireland but also across Europe. “We’re currently in talks with several export markets and it’s great that we no longer have to explain what Hard Seltzers are! We knew that the RTD market was due a shake-up and that consumers were turning away from overly sugary products and looking for lower calorie options; Hard Seltzers provide a great solution to this consumer demand”. The range is made with sparkling Irish natural mineral water carefully blended with natural fruit flavours and a wine base to produce a less sweet and more authentic 4% ABV drink at only 85 calories per 275ml bottle or 100 calories per 330ml can. The drink, low in calories, carbohydrates, sugars and naturally gluten-free, is available in three flavours – Apple & Elderflower, Orange & Mango and now Strawberry & Lime. “Our ethos is to be completely consumer-focused and we can adapt quickly as the exciting NoLo categories continue to evolve,” adds Stephen. For sales enquiries contact: RTM Beverages Ltd (01 9618922) or e-mail: Hello@Lokidrinks.com or www.RTMBeverages.com.