Are Hard Seltzers the Latest Battleground for the ‘War on Sugar’?
Having been around for seven years, Hard Seltzers are coming of age. By any measure, their growth has been impressive, and they are now an important part of the BWS (Beers, Wine and Spirits) category. The US has led the way with American millennials powering category growth. Brands like White Claw and Truly made massive market share gains as the category experienced runaway success, going from $3m to $550m in three years flat, with sales peaking in the summer months each year.
A simplistic reading of their appeal sees consumers maximising the alcohol ‘hit’ but using as few calories as possible. It’s true that hard seltzers hit the sweet spot in the category by being low in carbs and low in calories. With Keto pervasive in the US thanks to a history dating back to Dr Atkins in the 1970s, alongside a long-held traditional ‘calorie counting’ mentality, it’s easy to see the nutritional appeal. Calories in hard seltzer cans tend to hover at around 100 calories each, versus beer which has around 150 calories for the same amount of alcohol. Carbonated soft drinks calorie counts reach into the 200s for an equivalent volume.
Beyond alcohol, the rise of the sparkling tea category, kombucha and non-alcoholic sparkling water are all part of a broader ‘better for you’ trend towards lower calories and greater natural flavours in soft drinks. More and more people want healthier drinks, and they want their favourite drink to be it a tea, wine or a cocktail – in a form as portable as a beer. The ‘slim’ tall 200ml can have become synonymous with the category.
From a product development perspective, the challenge is to make Hard Seltzers distinct from beer, masking the malty and hoppy flavour without overdoing the added sweetness. Some are brewed from a distilled sugar base. This is because in the US there is a tax and duty cost advantage in using alcohol brewed from the malt as the tax on malt alcohol is lower than the tax on spirits.
Beer has been hit with some industry insiders fearing that a generation of coming-of-age entrants into BWS will bypass beer altogether and enter the category via hard seltzers. Analysts have coined a new phrase, ‘malternatives’ to describe these new alcohols.
Hard seltzers are swimming with the tide of healthier, natural drinks, currently best executed by ‘better for you’ brands, rather than the traditional BWS giants. Their appeal to drinkers who are trying to cut reduce sugar, cut calories and those looking for an easy cocktail mixer give them a unique role in the category. Plus, in the summer months, their light and refreshing characteristics come to the fore.
What is clear is that the war on sugar has opened up a new front in BWS and the traditional alcohol brands need to sit up and take notice.
Image from Seek Out Seltzer.