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Competition Heats Up In The Hard Seltzer Category

August 12, 2021

Boston Beer Company made headlines recently when it announced that it had overshot demand in hard seltzer in the second quarter. Noting that company depletions decelerated from 48% growth in the first quarter to 24% in the second, founder and chairman Jim Koch cited “slowing growth in household penetration as the market matures and there is less new trial; a gradual transition of volume to the on-premise channel as hard seltzer becomes a more regular option in that channel; and new hard seltzer brands at retail that resulted in a proliferation of choices and consumer confusion.”

Despite the slowdown, as Boston Beer’s ongoing double-digit growth attests, hard seltzer appears to have more room to climb, even as the category grows more competitive. Boston Beer’s Truly brand more than doubled in size to 47.7 million (2.25-gallon) cases last year, according to Impact Databank, ranking second only to Mark Anthony Brands’ White Claw, which soared to 95 million cases.

White Claw has been highly focused on market share from the jump and remains unrelenting in pricing and promotion initiatives designed to increase household penetration and get liquid to lips. “We have BoGos in here every month on seltzers,” says Brian Thompson, senior category manager, beer, at Florida retail chain ABC Fine Wine & Spirits, referring to “buy one, get one free” deals.

While White Claw continues to lead the market, Boston Beer’s Truly has proven a worthy competitor, with its volume up 60% in IRI channels in the year-to-date through June 13, compared with just a 0.3% advance for White Claw. “They’ve done very, very well,” Thompson says. “They’re taking share from White Claw right now and I think eventually they’ll share pretty closely at the top of the category.” Boston Beer also recently announced that the Truly brand will be entering the spirits category via a new alliance with Beam Suntory.

Newer competitors in hard seltzer include Constellation Brands’ Corona Seltzer, which launched last year to an initial 7.5 million cases. It comes in 12-pack variety packs of slim cans that feature fruit flavors including mango, cherry, lime, raspberry, and passionfruit, among others. In June, Constellation launched a new Corona Hard Seltzer Limonada into national distribution.

Diageo Beer Company already had a strong position in the flavored malt beverage (FMB) category with Smirnoff Ice, and it has extended its reach with Smirnoff Seltzer, which hit 3.8 million cases in 2020, helping to drive Smirnoff’s U.S. FMB sales up 17% in Diageo’s fiscal year ended in June. The most recent offering from the brand is Smirnoff Seltzer Pink Lemonade. Earlier this year, Diageo announced an $80 million expansion of its RTD capabilities in the U.S., which will allow its Plainfield, Illinois facility to produce 25 million cases of RTDs a year. Diageo North America president Debra Crew said the investment “will support our plans to meet increased consumer demand in line with emerging trends for convenient formats that are ideal for casual and at-home occasions.”

High Noon Sun Sips, from E.&J. Distillers, reached 3 million cases last year, and continues to carve out space at the higher end of the category. The brand’s various expressions are all made with vodka and flavors from real fruit. Despite intensifying competition, High Noon continues to surge, with control state volume more than doubling through the first half.

Brewing giants like A-B and Molson Coors are also on the move in hard seltzer. Bud Light Seltzer launched last year and reached 18.2 million cases. “In 2020, Bud Light, as a family of products, had its best share performance across the entire category in five years, and much of this success is due to the launch of Bud Light Seltzer and its incrementality to the brand,” says Andy Goeler, vice president of marketing for Bud Light. “Bud Light Seltzer earned more than 10% of the hard seltzer market within its first year.” Meanwhile, Molson Coors’ Vizzy brand hit 3.8 million cases in 2020, and the company is also partnered with Coca-Cola on the Topo Chico label.—Danny Sullivan

Leading Hard Seltzer Brands In The U.S.
(millions of 2.25-gallon cases)
Brand Company 2019 2020 Percent
White Claw Mark Anthony Brands 41.9 95.0 126.8%
Truly Boston Beer Co 20.0 47.7 138.6%
Bud Light Seltzer AB InBev 18.2 +
Corona Seltzer Constellation Brands 7.5 +
Vizzy Molson Coors 3.8 +
Smirnoff Seltzer Diageo Beer Co USA 2.5 3.7 43.5%
High Noon Sun Sips E.&J. Distillers 0.7 3.0 300.0%
1 Based on unrounded data.

Source: IMPACT DATABANK © 2021

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