Beyond beer, the fourth category, progressive adult beverages – it goes by different names, but the one thing the beverage-alcohol industry can agree on is that it is too important to ignore.
Dollar sales of flavored malt beverages (FMBs) and malt-based hard seltzers, which are the beer category’s touchpoints in the beyond beer space, have reached a combined $7.138 billion at off-premise retailers year-to-date through November 27, according to market research firm IRI.
To share insights into how their companies approach the segment, Molson Coors VP of innovation for North America Jamie Wideman and Rhinegeist chief commercial officer Adam Bankovich shared the stage at the Brewbound Live business conference earlier this month in Santa Monica, California. Brian “BK” Krueger, Bump Williams Consulting VP of business development and portfolio strategy, joined them to discuss how fourth category products fit in at retail and can drive incremental sales.
“Retailers know that there’s a profitability and more importantly, there’s a good story,” he said. “There aren’t a whole lot of great stories out there in bev-alc as far as percentage growth. The category that we’re talking about happens to be one of them and it also happens to be the leading buzzword across the industry.”
Molson Coors’ portfolio includes several products generating buzz nationwide: Topo Chico Hard Seltzer and Simply Spiked, both of which are produced through a licensing agreement with Coca-Cola, which owns the non-alcoholic versions of both brands.
Connecting with strong non-alc brands was paramount for Molson Coors as it launched new products, Wideman said.
“Flavor has really taken off, and I think the one thing that we’ve been very intentional about at Molson Coors is building brands that have staying power,” she said. “As we enter into these new categories with brands like Topo Chico Hard Seltzer and Vizzy, we wanted to ensure that we were creating brands that were authentic, that had a real reason to play in the space and were offering something different to the consumer.
“That’s really helped us to really get a foothold in the space, and it’s really been super helpful as we’ve been on this innovation journey,” she continued.
For Rhinegeist, the road to its RGBevs brand family, which rolled out this spring, began years earlier with the launch of the company’s Bubbles, a fruit-forward FMB. As shoppers’ expectations for the segment have shifted, so has Rhinegeist’s approach.
“Now that the industry has shifted – and Bubbles, at the time, was next to all of the Rhinegeist beers – and all the consumers are looking for this beyond beer category with seltzers, RTDs and FMBs in a different section of the cooler, we made a conscious decision that we should pivot to get these products away from our beers to where the consumers actually are and then really start innovating around them to bring more flavors, different flavor combinations,” Bankovich said.
Consumers’ interest in the fourth category has inspired retailers to cater to their wishes by, in some cases, dedicating several cooler doors’ worth of space to the products, Krueger said.
“Retailers are going to make room for things on their shelf that consumers are excited about, that they know that there’s going to be a positive return over replacing something else that may have been there a little bit longer,” he continued.
Watch the full conversation above as the panel discusses how to find white space, where they find inspiration and more.