Hard seltzers in France: category of alcoholic beverages or lifestyle?
In early August 2020, we witnessed the launch of the Topo Chico brand in Latin America. As a result, Coca Cola has become one of the latest brands to benefit from the momentum of the lightly alcoholic soft drinks category. This new product will be marketed in France in spring 2021, and marks the American giant's entry into the French alcoholic beverage sector. This news leads us to wonder about the hard seltzer category: is it simply a new beverage category, or a real movement in its own right.
The term «seltzer» has become a catch-all for sparkling, tasty refreshment, notes Brandy Rand, Managing Director of IWSR in the US. «Brands are waking up to the commercial potential of the term and using it strategically in marketing campaigns, branding and packaging, even for drinks not traditionally thought of as such,» she adds. In doing so, the drink is resonating with consumers who are looking for beverages that offer the characteristics of a seltzer - typically a fine bobbin (for travel convenience), 100 calories or less, gluten-free, sugar-free and with unique tastes and flavours.
Today, only a few brands share the French market: Snowmelt (now distributed by Carrefour) and Florida, two Americans. However, French brands such as Natz, hard seltzer imagined by Valentin Bros and Florentin Cugnot or Fefe The French Hard Seltzer, marketed by the Syndicat Cocktail Club.
Hard seltzer, alcoholic water
In 2019, we have seen a rapid rate of growth in hard seltzers, a category that had long remained in the shadows. Shortly afterwards, the category boomed in the US during the summer, overtaking beer sales and stealing the show from spirits and wine. By 2021, hard seltzers and other seltzer-like products have far outpaced the growth of all other alcoholic beverage categories, with new entrants flooding the market. Far from a fad, the tasty refreshment of seltzers (or alcoholic sparkling water, spritzers or sodas) began to spread around the world and become an indicator of the consumer lifestyles.
At the end of 2019, the value of the hard seltzer category in the USA represented 9 % of the combined vodka and whisky market value. By 2024, this share is likely to double to more than 20 %. IWSR forecasts that US consumption of hard selzter by volume will probably exceed US volumes of vodka and whisky combined by 2022. Even in the event of a pandemic, the category is proving popular with consumers. Consumers are reaping the benefits of this individual, refreshing and conveniently packaged beverage, meeting the essential health and wellness needs of today's consumer.
When a category is dominated by one or two key brands and then disrupted by new entrants, we often see a flurry of brands enter the market to try and capture share
Brandy Rand, COO IWSR United States
Brewers and distillers get in on the act
While Truly and White Claw are the leaders in the US alcoholic soft drinks market, other brands have continued to enter the competitive landscape. As a result, artisanal producers like major brands of beer, wine, spirits and even soft drinks are taking a keen interest in this trend. Many are experimenting with «seltzer-type» offerings that offer unique flavor or functional benefits like organic or natural.
«When a category is dominated by one or two key brands and then disrupted by new entrants, we often see a flurry of brands enter the market to try and capture share,» notes Rand.
Today, it's the spirit-based options that are attracting consumer interest, such as High Noon Sun Sips from E&J Gallo (a seltzer based on flavoured vodka) and hard seltzer Playamar by Jose Cuervo. Manufacturers of homemade beer and spirits companies are diversifying their portfolios to include canned cocktails and hard seltzers. IWSR estimates that 30 % of US craft distillers currently have a premix/RTD on the market, and a further 20 % are currently developing one.
From martinis to seltzers
What's most interesting about the evolution of the hard seltzer category is that it has rapidly become a lifestyle in the United States. «We've seen the same thing happen with rosé wine, which has undeniably cultivated a lifestyle of its own. In the late 1990s, anything served in a martini glass was considered a martini, even if it wasn't a gin/vodka & vermouth base. The term «martini» became synonymous with sophisticated nibbling, and brands sought to exploit the lifestyle attributes of the martini, whatever the ingredients in the glass. Today, we're seeing the same trends with hard seltzers,» notes Rand.
What does this mean for brands and startups?
For brands, entrepreneurs and marketing teams, the advantage of the hard seltzer movement is that the drink's attributes resonate all year round. Seltzers are not a seasonal product. While hard seltzer may have been the «in» drink in the US in 2019, the beverage's popularity hasn't stopped in autumn or winter. «Brands have the opportunity to create marketing campaigns that build on the drink's year-round appeal, for all genders and ages,» suggests Rand.
The marketing campaign for High Noon Sun Sips, for example, focuses on the opportunity to have a drink during the day, and the aficionado brands on «midday», which helps to further cultivate the values of the «seltzer» lifestyle.
For brands not yet in the hard seltzer category but exploring growth opportunities, other alcoholic beverage sub-categories may be of interest; hard kombuchas or hard teas, for example, could have potential in this area. In Texas, the trend is for the «Ranch Water» cocktail, made with Topo Chico, tequila and lime. Such is its popularity that alcoholic beverage companies have begun producing RTDs inspired by this cocktail. The Texas company Lone River Beverage Co, For example, the company has launched a malt-based hard seltzer called «Ranch Water».
Hard Seltzer, a practical drink
One of the key factors in the popularity of hard seltzers is convenience. This is an element that the RTD (ready-to-drink) category can exploit to refresh the marketing message in a post-Covid climate. Brands in this sector therefore have the opportunity to capture some of the momentum created by hard seltzers. According to IWSR forecasts, the category will grow in volume by 72 % in the United States and by almost 42 % worldwide between 2019 and 2024.
If Coca-Cola is one of the latest brands to dive into the hard seltzer movement, we can expect the category to continue to grow.
According to a article from IWSR.
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