Hard Seltzer: What You Need to Know to Maximize Summer Sales
As big brands and craft producers compete, independent retailers can drive sales with diverse selections
For anyone who thinks hard seltzer is merely a fad, think again. The wildly popular category became an essential sales driver last year, growing 212.6 percent in off-premise dollar sales over the course of 2019, according to Nielsen. Hard seltzer even overtook an American beer staple, besting light lager to hold the highest beer category share on Drizly by the end of last year.
Hard seltzer’s veritable boom shows no signs of slowing down in 2020. In fact, Drizly’s hard seltzer sales have increased 707 percent year to date above baseline through June 1 (compared to an overall sales increase since Covid-19 of around 400 percent above baseline, or what they would have expected). Week over week, the category has continuously shown top growth in the off-premise sector amidst the impact of Covid-19.
While the category was previously dominated by a few top brands, now more companies are jumping into the category. Numerous big brands and small producers alike are launching hard seltzers, creating new competition among products and offering more choices for consumers. We’re calling 2020 the year of the seltzer wars — and independent retailers are poised to win big.
Booming Sales and New Brands
Hard seltzer sales were already set to increase in 2020, but the effects of Covid-19 on the beverage market have only served to accelerate hard seltzer’s boom. For Covid-19 impacted weeks through May 23, Nielsen reports that hard seltzers sales have grown 326 percent across off-premise channels.
Those sales added up to a whopping $990 million through May 30, according to Nielsen, which has nearly doubled since the time period before Covid-19 affected U.S. beverage sales. That’s all before the summer season, last year’s key season for hard seltzer growth, even sets in. Liz Paquette, Drizly’s head of consumer insights, expects that hard seltzer could reach 8 percent of overall Drizly sales based on past years’ June to July growth.
Since 2016, three hard seltzer brands have dominated the category: BON V!V, which is now owned by AB InBev; Truly, owned by Boston Beer Company; and White Claw, owned by Mark Anthony Brands, which also owns Mike’s Hard Lemonade. Last year saw White Claw take over much of the category, with sales on Drizly growing by 577 percent (compared to 213 percent for Truly and 23 percent for BON V!V).
Other hard seltzers existed in the market at this time as well — Diageo launched Smirnoff Spiked Sparkling Seltzer in 2016, while MillerCoors had Henry’s Hard Sparkling Water — but it wasn’t until 2019 that many other big beverage businesses have attempted to capitalize on the booming hard seltzer market. Well-known beer brands Bud Light (owned by AB InBev) and Corona (owned by Constellation Brands) launched hard seltzers under their brand umbrellas earlier this year, while MillerCoors launched Vizzy and Harpoon Brewery partnered with Polar Seltzer to launch Arctic Summer.
Wineries have stepped into the hard seltzer game as well. E. & J. Gallo has seen early success with High Noon, while Barefoot Hard Seltzer was dubbed the first wine-based hard seltzer option.
Simultaneously, the market has seen the introduction of independent hard seltzers. Many craft breweries have added hard seltzers to their product lineups, such as Chicago’s Solemn Oath Brewery with City Water, but new companies, like Ficks Hard Seltzer from Sonoma County, have emerged as well. From the mass-market to the hyper-local, hard seltzer options are more varied than ever.
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Curating a Hard Seltzer Selection
While hard seltzer has become a fixture in multi-outlet stores, independent retailers shouldn’t shrug off the category. A recent IRI report indicates that hard seltzer is driving greater growth in small-format and convenience stores during the Covid-19 impacted period through May 10: A 432 percent increase in dollar sales over one year ago, versus a 334 percent dollar sales increase over one year ago, across multi-outlet stores.
“It’s a big enough category today and is continuing to grow, so it’s worth investing in the long tail,” says Paquette. “It’s not a category to ignore.” She recommends that Drizly retailers carry the platform’s top-selling hard seltzers — White Claw, Truly, High Noon, and Bud Light — to drive initial purchase conversion.
Investing in new hard seltzer products may also pay off with both new and existing hard seltzer consumers. Nielsen data indicates that existing hard seltzer buyers are purchasing more amidst the effects of Covid-19. Though existing hard seltzer buyers account for 56 percent of total hard seltzer buyers during this time period, they represent 68 percent of sales dollars.
Meanwhile, many new hard seltzer consumers are entering the category as well. “While many trends are pointing to consumers purchasing existing brands they know and trust,” says Danielle Kosmal, the VP of beverage alcohol at Nielsen, “there is also a subset of consumers that are willing to try new — or new-to-them — products.” Nearly half of all hard seltzer consumers during Covid-19 affected weeks had not purchased hard seltzer before.
When deciding to invest in a new hard seltzer product, Jordan Abdul, the manager of Kindred Spirits and Wine in Dallas, emphasizes the importance of prioritizing quality over hype. “My decisions are based purely on taste,” he says. “You need a good enough product. If not, it’s going to sell quickly in the beginning, but as soon as customers have tried it, they won’t want it anymore.”
It can also be helpful to have a range of hard seltzer styles, says Abdul. Spirits-based hard seltzers like Monaco have been popular among consumers who are looking to stay away from malt-based beverages.
“We’d recommend carrying a few craft, upscale options, as well as local options when possible,” says Paquette. Though Abdul carries most of the White Claw and Truly flavors, he found success in carrying Texas-based, craft hard seltzer Ranch Water from Lone River Beverage. “People are going nuts for it,” says Abdul. “If you have a craft product that nobody else has, people are priding themselves in finding those things.”
As with any other beverage category, there is a limit to the number of hard seltzers that a retailer should carry, so it’s important to curate a selection based on a shop’s customer base. “Not every area is going to like the same things,” says Abdul. “Understand what your delivery area wants and cater to that.”