BW166: 2021 Seltzer and RTD Label Approvals Dominated by Spirits
Consulting firm BW166 reported that label approvals for seltzer and seltzer-like products are accelerating, with approvals trending at 334 per month compared to the 228 per month in 2020. Through June 2021, the TTB has approved 2,741 labels, surpassing the 2,002 labels approved in calendar year 2020.
“This acceleration in label approvals is driven almost entirely by spirits-based products,” the firm reported. “Wine and beer are seeing positive trendlines in approvals but nothing like spirits products.”
Among spirits-based RTD label approvals, vodka led the way with 562 approvals through the first six months of 2021, followed by whiskey/bourbon (346), tequila/agave (337), gin (57) and rum (53).
“Citrus-based flavors tend to dominate the field (including lime, lemon, orange, and citrus) coupled with the generic fruit offering,” BW166 wrote. “In addition to flavors, also visible are typical RTDs and mixed drinks including margarita, mule, manhattan, and daiquiri.”
Drizly: Seltzers Top List of June Breakout Brands
Hard seltzers led the way for breakout beer category brands in the month of June on e-commerce alcohol delivery platform Drizly, the company’s BevAlc Insights team reported.
Lone River Ranch Water, the Texas-based brand Diageo acquired in March, was a standout last month on Drizly. Lone River’s top-selling SKU was its variety pack, followed by the brand’s original and spicy flavors. SunRise Hard Seltzer — a joint venture between AriZona Iced Tea maker Hornell Brewing and Heineken USA — was another top hard seltzer in the beer category, Drizly said.
In the spirits category, Two Chicks Cocktails, a line of ready-to-drink, spirits-based sparkling cocktails, saw “breakout growth,” Drizly wrote. Popular Two Chicks offerings on Drizly included Sparkling Vodka Fizz, Sparkling Paloma, and Sparkling Citrus Margarita.
The RTD cocktail segment was Drizly’s fastest grower in the spirits category last month, and gained share from May to June. Popular flavors included rum and cola, bloody mary and Bahama Mama.
The spirits category continues to grow share on the Drizly platform at the expense of beer and wine. Spirits accounted for 45% of Drizly sales in June 2021, up from 42% in June 2020. Beer’s share has declined three points year-over-year, and wine has declined one. Drizly’s head of consumer insights Liz Paquette attributed spirits’ gains to the success of RTD cocktails.
“As flavor innovation continues in the RTD space, the lines continue to blur with hard seltzer and other alternative categories—likely with low consumer awareness that they are swapping one category for the other,” she wrote.
In the beer category, shandies and radlers were the fastest growing style. Popular brands included Leinenkugel’s Summer Shandy, Narragansett Del’s Lemon Shandy, Goose Island 312 Lemonade Shandy, and Cape May The Grove Citrus Shandy. These styles, often a combination of a light ale or lager and lemonade or lemon soda, overlap with the hard lemonade and lemonade hard seltzer segments.
CGA: 53% of On-Premise Visitors Attended Bars and Restaurants Over July 4 Weekend
More than half (53%) of on-premise visitors went to a bar or restaurant during the July 4 weekend, according to CGA, an on-premise market research firm.
From July 2-5, CGA surveyed 1,886 consumers from Florida, Texas, California and New York. Nearly a fifth (17%) of respondents said they went out for the holiday weekend specifically for an alcoholic drink. Fewer (12%) said they went out to eat and drink, while 24% said they went out specifically to eat.
One-third of consumers said they visited an on-premise establishment for drink-led occasions in the past two weeks, and one-in-three said they plan on visiting for drink-led occasions in the next two weeks. Two-thirds said they went on-premise for food-led occasions in the past two weeks, and two-in-three plan to in the next two weeks.
Beer is the second most ordered beverage by consumers on-premise, with 34% of those surveyed saying they ordered related-products since bars and restaurants reopened. Only 10% of consumers said hard seltzer has been their drink of choice.
Two-fifths of respondents said they have ordered alcohol through take-out or delivery from bars and restaurants, with one-in-five saying they would do so in the next two weeks.
When it comes to spend, 58% of respondents said they are spending the same as they were pre-pandemic. Nearly a quarter (23%) said they are spending less, and 19% said they are spending more. Regarding tips, 60% are tipping the same as they were pre-pandemic, 35% are tipping more, and 5% are tipping less. However, when ordering through a digital device or menu, 18% said they are tipping more, and 22% said they are tipping less.
Brewers Association Looks at Midyear Craft Beer Trends
Brewers Association chief economist Bart Watson took a look at the midyear 2021 data currently available in his latest blog post. However, he admitted what we have so far is “some of the less perfect measures of brewery performance.”
Looking at the BA-defined craft scans in IRI multi-outlet and convenience stores for the first 26 weeks of the year (through June 27), Watson found that the first 10 weeks showed “a continued strong shift from on-premise to off-premise and elevated sales.” And then …
“From there, you see a weakening of that shift and the cycling versus 2020 suddenly compares to the much larger shift we saw in the first months of the pandemic,” Watson wrote. “And all of this is in the context of a time of the year where, nationally, seasonality is driving growing sales.”
Watson reiterated that weaker off-premise scans in 2021 could indicate a return of draft for craft brewers. However, he wrote that “there is light evidence of that” so far, while showing improving total beer trends via BeerBoard. But those trends are “not enough to offset the scan weakening,” Watson wrote, noting that BeerBoard doesn’t break out craft.
Meanwhile, Alcohol and Tobacco Tax and Trade Bureau (TTB) keg production through April has shown improving trends, “though production may be anticipatory as distributors and retailers rebuild their stock,” Watson cautioned.
“If craft draught is following closer to this line, it would lend support to the ‘weakening scan is a good thing’ theory,” he wrote.
A major unknown that remains are at-the-brewery sales. Arryved point-of-sale data says sales are up 5% compared to 2020 and down 20% compared to 2019, Watson wrote. First quarter TTB data though “shows the flip, indicating a slight decrease versus 2020 but a slight increase versus 2019.” And Google searches for breweries near me “suggest that sales have resumed the growth we were seeing prior to the pandemic and is up versus both 2019 and 2020, with similar trends versus 2019 in both Q1 and Q2.”
“Based on all three indicators, if I were forced to guess, I’d wager that at-the-brewery sales in the first half of 2021 were at least at 2019 levels, if not a bit stronger, meaning much stronger than 2020, particularly in Q2,” Watson wrote.
In order to get more perfect data, fill out the Brewers Association’s midyear survey.
NACS Survey: 67% of C-Store Retailers Report Beer Supply Challenges
A survey of U.S.-based convenience retailers and their supplier partners found that 67% of respondents reported supply challenges with beer in the second quarter, according to the National Association of Convenience Stores (NACS), a trade association representing convenience and fuel retailers. And it wasn’t just issues with beer, as 72% of retailers reported supply disruptions with other packaged beverages during the quarter.
NACS reported that c-store retailers and suppliers said product procurement across the supply chain was “a major challenge” during Q2, and they have “little confidence improvements are coming” this year.
Almost 40% of respondents said they experienced “significant” levels of disruption across the supply chain during the quarter, and 86% reported at least 10% of their orders were disrupted, NACS said.
NACS, citing sales data ending April 2021, reported that in-store sales “have rebounded to pre-pandemic levels” and fuel sales “have largely recovered.”
The surveys were conducted in June, with 56 retailer members, who represent nearly 1,5000 stores, and 83 suppliers took part in the survey.
Year-to-date through June 13, off-premise beer category dollar sales in the c-store channel are up 4.1%, to more than $10.7 billion, according to market research firm IRI. Up against the tough year-ago comps, dollar sales have declined within the last four- (-5.8%) and 12-week (-3.1%) periods.
Atlantic Beverage Distributors Fights Jack’s Abby’s Exit, Sues American Arbitration Association
The legal battle between Jack’s Abby Craft Lagers and Atlantic Beverage Distributors continues after the Massachusetts-based companies completed arbitration last month, according to a report in subscription newsletter Beer Marketer’s Insights.
Atlantic has filed an emergency motion for a preliminary injunction against the Framingham-based craft brewery, and filed a separate lawsuit against the American Arbitration Association to dispute the fair market value the organization applied to the Jack’s Abby and Springdale Beer Company brands.
The dispute between the companies began in January, when Jack’s Abby informed Atlantic of its intention to terminate two days after franchise law reform was enacted in the state. The Holliston-based distributor fought back and filed a 25E petition with the Massachusetts Alcoholic Beverages Control Commission.
Last week, Jack’s Abby announced it had designated Sheehan Family Companies’ three Massachusetts operations (L. Knife and Son, Craft Massachusetts, Seaboard Products) as its next Bay State wholesalers.
Although Jack’s Abby delivered checks for the designated fair market value of its brands to Atlantic last week, the wholesaler’s counsel is holding them in escrow, BMI reported.
According to court documents, Atlantic distributed 25,903 barrels of Jack’s Abby and Springdale products to 1,115 on-premise accounts and 1,677 off-premise accounts in 2020 — a “significant portion of Atlantic’s total beer sales,” but a decline of 11% from the 29,108 barrels distributed in 2019.
Provi Announces Tennessee Expansion and Partnership with Lipman Brothers
Provi, a B2B e-commerce beverage marketplace, announced its expansion into Tennessee, made possible through a partnership with Nashville alcohol wholesaler Lipman Brothers.
“This partnership and expansion speaks to our continued commitment of building and investing in our relationships with local distributors,” Provi CEO Taylor Katzman said.
To celebrate the expansion, spirits giant Brown-Forman will make a $6,500 donation to the Nashville Predators Foundation to provide aid to local families. Provi and Lipman Brothers will donate an additional $5,000 to Tennessee Action for Hospitality, a coalition of restaurant-industry workers.
With its latest expansion, Provi is now active in 30 states.
Iron Horse Brewery Acquires Bad Granny Cider
Ellensburg, Washington-based Iron Horse Brewery has acquired Bad Granny Cider in Entiat, Washington.
The two companies announced their finalized agreement in a press release Thursday, which noted that their similar company cultures, customer visions and brand voices made for an ideal partnership.
“We recognized that we under-index in the ‘better-for-you’ segment of the category,” Dane Williams, head of new business development at Iron Horse, said. “Fortunately for us, BGC is an emerging brand in a ‘better-for-you’ segment that has tremendous upside. It’s exciting to know that we’ll now have a portfolio that appeals to a greater range of consumers.”
Beginning immediately, the sales teams of each company will start cross-selling products in their respective markets. While the two will continue to operate as independent brand identities, Bad Granny production will shift to Ellensburg within the next nine to 14 months, according to the release. As part of the agreement, Bad Granny co-founders Bret and Julie Pittsinger continue their involvement in the partnership through 2026.