Hard seltzer searching for its floor has been a theme of Wall Street analyst reports over the last year. That line appeared again in the most recent “Hard Seltzer Dashboard” by Jefferies’ Kevin Grundy, which noted that hard seltzer’s share of total beer category dollar sales in Q4 2022 was the lowest point the segment had seen since the start of the pandemic.
Sure, there’s seasonality at play in Q4, but I repeat: lowest point since the start of the pandemic. Not long ago, leaders of the major hard seltzer players and Wall Street analysts were searching for the ceiling. Coming out of the pandemic shutdowns of 2020, consumers returned to the on-premise and purchasing behavior shifted just as producers overbuilt inventories.
Jess has all the numbers on the declines of malt- and sugar-based seltzers, and the growth of spirits-based seltzers. Notably, as the overall segment declines, one major player is reclaiming share: Mark Anthony Brands, which makes White Claw and Mike’s. Mark Anthony’s portfolio now holds around 47% of the segment.
So far in 2023, the story remains the same. Off-premise dollar sales of beer-centric hard seltzers, as defined by market research firm IRI, are down -12.5%, while volume is down -18.5% in multi-outlet and convenience stores year-to-date through January 29.
In related news, flavor-forward is the name of the game. Just look at the top new products of 2022 in NielsenIQ scans as shared by Bump Williams Consulting. Of the top 25 best-selling new products, 12 were flavored malt beverages (FMBs) and six were hard seltzers.
Although the overall seltzer segment is struggling, new products are still finding success. The No. 1 new product was Mark Anthony Brands’ White Claw Surf variety pack ($74 million, 2 million cases in NielsenIQ-tracked off-premise outlets).
The full-flavored trend is also playing out in convenience stores. C-store retailers told Goldman Sachs’ Bonnie Herzog in her Beverage Bytes survey that they’re making more space for Constellation Brands’ Mexican import portfolio, but also Boston Beer’s Twisted Tea, Molson Coors’ Simply Spiked and Monster’s The Beast Unleashed FMB.
Expect these themes to continue throughout the year.
In other news …
The Super Bowl is just days away. Market research firm Numerator says beer is at the top of the list of alcoholic beverages for those planning to imbibe during the big game. The firm reported that 47% of Super Bowl watchers planning to buy alcoholic beverages will buy beer, followed by wine (28%) and spirits (24%).
Also, the majority of folks are either watching the game at home or at a friend’s place (or crashing someone’s party). Although that’s not good news for bars and restaurants, NielsenIQ’s on-premise arm, CGA, reported some encouraging trends in the channel, including +20% sales velocity.
On this week’s Brewbound Podcast: In the wake of this year’s Dry January, Jess, Zoe and I caught up with Partake Brewing’s Ted Fleming and Lagunitas’ Paige Guzman on how non-alc beer and hop water producers can keep the momentum going all year long. Plus, Zoe fills us in on her CiderCon adventures. Listen for free.
Speaking of CiderCon, bev-alc buyers from Whole Foods and Spartan Nash shared why 2023 may be “cider’s moment.”
More of Allagash White is always a good thing, and if you’re an Allagashian living outside the Chicago area, you’re in luck. The Maine favorite is going statewide in Illinois. Plus, Wiseacre has added its fifth state — Virginia — in the last year.
The excise tax and market access fight over ready-to-drink (RTD), spirits-based canned cocktails is about to heat up in California. Golden State lawmakers are considering legislation that would allow beer and wine retailers to sell spirits-based RTDs lower than 10% ABV and in containers no larger than 16 oz.
And that’s a wrap on this week. Thanks to all of our Brewbound Insiders for supporting our work. If you’d like to join, check out this link.