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Market Watch: Hard Seltzer Players Eye On-Premise Expansion

May 13, 2022

After gaining a massive customer base at the retail level, hard seltzers have been gaining steam on-premise, both on beer lists and as an ingredient on cocktail menus, and that’s accelerating as more restaurants and bars reopen after Covid-19 closures. Many brands are focusing on the on-premise as a key sector moving forward.

Brands like White Claw, Truly, and High Noon catapulted the popularity of the seltzer category, but big-name players like Bud Light and Smirnoff also have seltzers that are doing well, even on-premise. “The hard seltzer category is constantly evolving and growing, and White Claw continues to spearhead the category as the nation’s top-selling hard seltzer,” says John Shea, CMO of White Claw. “White Claw’s largest channel is the convenience store segment, but White Claw has a large volume share of hard seltzers in the on-premise and a large opportunity to grow distribution there.” Shea adds that bars are White Claw’s biggest on-premise channel, followed by restaurants, and he estimates that through the first half of last year White Claw’s on-premise volume was up 60%.

Diageo’s Smirnoff Seltzer portfolio spans ten flavors, including several rosé offshoots ($13 a 12-pack of 12-ounce cans). Because of its focus on mixology with its core vodka line, Smirnoff puts a big emphasis on cocktails, even for its seltzers. The brand promotes easy and approachable drinks recipes that incorporate the sparkling RTD offerings and Smirnoff vodkas.

“Our formula for success has been based around the idea of a flavor that can be delivered in a variety of formats and that provides a drink for any occasion,” says Lisa Lee, director of Smirnoff’s flavored malt beverage portfolio. “The growth of hard seltzers in the United States in the past few years has been phenomenal. We see tremendous opportunity in the on-premise.”

Beer behemoth Bud Light launched its first seltzer product in January 2020. The pandemic threw a lot of unforeseen challenges at its first year, but brand executives are pleased with how Bud Light Seltzer is performing. “We anticipate, with the ease of Covid-19 restrictions across the country, that Bud Light Seltzer will continue to grow on-premise,” says Andy Goeler, vice president of marketing for Bud Light. “The seltzer category has so far been primarily an off-premise business, but we’re seeing an increased demand for on-premise consumption.”

Laura Luciano, the beverage manager for BR Guest Hospitality’s upscale Mexican concept Dos Caminos, touts the versatility of alcoholic seltzers. She says they work as mixers in cocktails and that they can complement a wide variety of spirits because of the vast array of flavors within the hard seltzer category. “Alcoholic seltzers are absolutely on the rise as a cocktail ingredient,” Luciano says. “They can be used year-round to help achieve flavor profiles that otherwise might only be available during certain seasons.” Market Watch has more on the outlook for hard seltzer in the on-premise.

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