The Future of “Hard” Beverages by Samantha Des Jardins, Datassential

The Future of “Hard” Beverages

By Samantha Des Jardins, Datassential

“Hard” seltzers have been the menu darling of recent years, creating a new category that brought in millennials who craved the flavor choices of seltzer water, the low calories of a light beer, and the ease and portability of a cocktail in a can. And the segment shows no signs of slowing down. That’s because hard seltzer makers are not only answering a call for boozier beverages but also making other “hard” options for consumers to experiment with, and ones that could take this typically heavily summer-skewed beverage well into other seasons. Just like the explosion, and then the evolution, of the seltzer water market, so went the rapid rise of hard beverages. Brands like LaCroix led the way as an alternative to soda and sugary drinks, and now the market has swelled with a number of competitors that offered diversity in sweetness, carbonation or flavor. There was soon something for everyone. Except perhaps, one with that boozy kick. Enter hard seltzer. White Claw came on the market in 2016, and since then the hard seltzer market has exploded and brought on a myriad of new brand competitors including Truly, made by Sam Adams maker

Boston Beer Co., and High Noon, made by E & J Gallo Winery, the company behind the folksy, porch-sitting 1980’s advertising icons Bartles and Jaymes, and their popular wine coolers. (The company re-launched those iconic wine coolers soon after debuting High Noon). But established brands are also making their mark in this relatively new category, capitalizing on a shift in consumer preferences from beer and hard liquor. Brands like Pabst Blue Ribbon, Bud Light, Corona and Smirnoff have entered the category, creating their own versions of hard seltzer in hopes of catching the wave of this new and extremely popular beverage, while also in some cases catching some of the consumers they lost from their other signature beer and liquor. As tastes change and the momentum shifts toward ready-to-drink options that have fewer calories and more flavor options, hard seltzer has made its way into the mainstream. According to a Datassential survey last year, 40 percent of drinking age adults had a hard seltzer in the past month. Thirty-four percent are considered heavy hard seltzer drinkers (those who consume more than one per week), while 49 percent are light seltzer drinkers and enjoy a hard beverage less than once a month. Seventeen percent of consumers lie in the middle, enjoying a hard seltzer once or twice a month. The hard seltzer segment has grown on the heels of the canned pre-mixed cocktail category, which has also seen explosive growth in recent years. Cocktails in a can allow for mixed drinks to be enjoyed with the same ease as a beer, but with a wide range of flavors and mixins to sample. Take for example, Bacardi USA’s selection of mixed drinks, including a mojito, rum punch, gin and tonic and margarita versions. These allow consumers to experience the full flavor of a mixed drink with the pop of a can, which is a draw for many. With the prevalence on menus growing rapidly, this shows there’s ample opportunity to increase consumers’ frequency while enjoying a strong awareness across the public. Consumer affinity for hard seltzer is strongest among females and millennials, the largest demographic group in the U.S. Offering a variety of flavors and brands, along with mix-in suggestions, can stretch the traditional summer hard seltzer season into a winner for a fall menu. Hard beverages are seeing rocketing growth on menus, far surpassing the growth of any other form of alcohol. And they’re far from done. In fact, the hard seltzer market is expected to grow faster than 99 percent of all other foods, beverages and ingredients over the next four years. It’s already shown a remarkable gain of

nearly 3,900 percent over the last four years. The secondfastest growing among popular alcohol categories is cider, at 11 percent. And that’s not just in their traditionally most popular season of summer. As more brands emerge and existing booze brands extend into this red-hot category, there will be more options for consumers and more incentive than ever for operators to offer hard beverages year-round. While hard seltzer can be seen as a predominately off-premise beverage because it’s portable and premixed, there are plenty of avenues for growth in all areas of on-premise imbibing. Currently, the widest disparities between hard seltzer and all on-premise alcohol are in casual bars, where hard seltzers take up the smallest relative portion of beverages sold. Hard seltzer is most popular relative to other beverages in upscale restaurants and nightclubs. Hard seltzers are the strongest sellers for those consumers in situations of casual socializing, family gatherings or entertainment events, and they can translate well for occasions where consumers crave a social occasion or special moment with a drink but may still be nervous about sharing a drink with tablemates as COVID variants persist. They also could serve as a familiar and welcome mixer for some drinkers who prefer a stiffer drink, or traditional mixed drinks with the flavor range of hard seltzer. New iterations of hard seltzer this year have filled in the gaps for some consumers who wanted more alcohol by volume in a single beverage. Both Truly and White Claw released 8% ABV versions earlier this year. Both brands have also released iced tea versions of their hard seltzers, signaling another way this booming market is expanding. Other beverages that are getting the “hard” treatment include coffee, lemonade and kombucha, creating a way for consumers to blend their favorite everyday beverages with a spike of alcohol. Truly and Sam Adams maker Boston Beer Co. recently showed how far this category has to expand. In August, Boston Beer Co. teamed up with PepsiCo Inc. to create a boozy version of Mountain Dew. The sugar- and caffeine-free beverage is expected to debut early next year in three flavors. Brands like Rebel Hard Coffee, with flavors like mocha, vanilla and Bourbon caramel lattes, highlight the brand extensions that will bring hard seltzer into more of a year-round occasion. That brand has also introduced a pumpkin spice flavor, showcasing perhaps better than anything that “hard” drinks are ready for a prominent spot on menus, even when the weather cools down.