Sonic Hard Seltzer is getting two sibling brands this fall as the license agreement between its parent company, COOP Ale Works, and Sonic Drive-In expands to Sonic Hard Southern Sweet Tea and Sonic Hard Slush.
“After tremendous support and response from across the country for Sonic Hard Seltzer, it became clear that the Sonic fan is enjoying the experience of their favorite Sonic beverages in adult form,” COOP Ale Works president Sean Mossman said in a press release. “Adult hard tea and adult hard slush are natural brand extensions, and we are all excited for our fans to be able to try these amazing flavors.”
Both offerings will roll out in September to select markets.
Sonic Hard Southern Sweet Tea check in at 5% ABV and will be available in 12-packs of 12 oz. cans and 24-oz. single-serve cans in Sonic Hard Seltzer’s full 38-state footprint. Those markets include Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
Sonic Hard Bevs will lead with a single “hint of lemon” flavor to start, and variations are slated for future launch, Mossman told Brewbound. The brand wades into an increasingly crowded hard tea subsegment that’s dominated by a two-decades-old behemoth: Boston Beer’s Twisted Tea.
Year-to-date through June 12, dollar sales of the Twisted Tea brand family at multi-outlet food and convenience off-premise retailers have increased +22.1%, to $351.8 million, making it the 12th largest brand family in the beer category, according to market research firm IRI. Twisted Tea holds about 75%-80% of the $2 billion hard tea segment, Mossman said.
“When I talked about Boston as a competitor, when I talked about Twisted Tea as somebody we’re going after, it is with the utmost respect,” he said. “But the reality is that’s a brand that has created a category. That’s a brand that is almost unopposed in a category, and it is what, by definition, we would all consider whitespace.”
How is Sonic approaching the segment differently than the myriad competitors Twisted Tea has smacked down over the years? With a key piece of drinker insight that Mossman believes has so far gone unheeded: Hard tea drinkers want hard tea that tastes like tea.
“Their response is a little bit more like ‘Don’t overcomplicate this category,’” he said. “They want good flavor. They want a flavor that they expect.”
Sonic Hard Southern Sweet Tea will check in “slightly under 200” calories, which is meaningfully less than Twisted Tea’s estimated 240, Mossman said. Sonic tea will also have fewer grams of sugar. But the biggest differentiator the product offers is its taste profile and how closely it matches the sweet tea sold at Sonic Drive-Ins, which account for 75% of all tea orders at the fast food chain.
“There’s a little bit of a lower-calorie, lower-sugar play,” he said. “But what we’re most excited about is that when we’re working with Sonic and working with their base tea formulas, we think we’ve got a better tasting product ultimately.”
Another arrow in Sonic Hard Bev’s quiver is its distributor network, which is mostly aligned with Anheuser-Busch InBev houses or those that otherwise typically lack Boston Beer (Twisted Tea, Truly Hard Seltzer) or Mark Anthony Brands (White Claw). Mossman categorized enthusiasm among Sonic’s network as “through the roof.”
“These are distributors that have been looking for a solution to their tea problem and are excited about this becoming the solution to their tea problem,” he said. “Their problem is, simply, they don’t have one that can compete with Twisted. That is the 900-pound gorilla. We get it.”
In fact, it was distributors beseeching Sonic Hard Bevs to launch a hard tea that helped bring about the new product, starting with La Vergne, Tennessee-based Ajax Turner.
“They are very excited about this,” Mossman said. “They’ve been dying for a good, solid, bankable entry into the tea space for a while.”
Sonic Hard Slush to Takes Aim at $200 Million Frozen RTD Opportunity
Sonic Hard Slush, 6% ABV ready-to-drink frozen pouches, will be available in three flavors: Cherry Limeade, Blue Raspberry and Watermelon. Inspired by Sonic Drive-In Slushes, the pouches were created to mimic the familiar experience consumers have of going to a Sonic location, getting a slush, and adding their own alcohol at home.
“We want to take that sort of ‘middleman’ out of it and have that experience, and we feel really strongly that what customers are getting is what they would expect from the Sonic product on the non-alc side,” Mossman said.
Sonic Hard Slush will not be sold at Sonic Drive-In locations, though.
Sonic Hard Slush will launch in 15 states this September (Alabama, Arkansas, Arizona, California, Georgia, Illinois, Louisiana, Missouri, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, Texas and Virginia), with additional states added in March 2023. While it will be a year-round offering, the fractured launch is due to the seasonality of frozen beverages.
Mossman said retailers have already committed to keeping Sonic Hard Slush on shelves for at least 12-18 months – including the slower winter months – in order to build the brand.
“The general reaction on the slush side is just excitement, [that it’s] a good opportunity to get into a space that’s growing,” Mossman said of retailers.
Mossman believes the total opportunity for frozen RTDs in wholesale nationally is $200 million. That space has been mainly dominated by Daily’s Cocktails. Over the next couple years, Coop Ale Works hopes to claim between 15-20% share of the space, but are “certainly not going to stop there if the consumer responds,” Mossman said.
“We’re seeing a lot of things like freezer pops come in and out and understandably so,” Mossman said. “But the gorilla in this category is, and will continue to be, Daily’s, and that’s what we’re going after in regards to direct competition.”
The marketing strategy for Sonic Hard Slush is to focus on occasion rather than specific demographics of consumers. Mossman said he sees the product being consumed at tailgates, pool clubs, backyards and more.
Sonic Hard Slush will also be sold warm, rather than already frozen. Not only does Coop Ale Works not “want to encourage” abuse of RTDs, but Mossman said consumers are already “accustomed” to having to freeze frozen RTDs at home. Additionally, consumers are used to looking for alcoholic beverages in retailers specific cold boxes and warm shelves.
“[If] we’re asking you to move alcoholic beverages over to freezer space, we’re gonna have to do the work of conditioning that consumer to go look for it in a different space, rather than get the incremental sales in the alcohol aisle at the retailer,” Mossman said.
Sonic Hard Seltzer Volume +166% March through May at New Wholesalers
Sonic’s hard tea and hard slush will join elder sibling Sonic Hard Seltzer as it settles into its successful near-nationwide expansion, which began earlier this spring.
Volume flowing through wholesalers that began selling Sonic Hard Seltzer in March increased +166% through May. In existing markets, velocity has increased +34%.
“We’re shipping out 34% more product in the same shelf space as we had back in January – it’s increasing,” Mossman said. “We’re seeing distribution increases, we’re seeing velocity increases in the same shelves.”
Sonic’s expansion this spring began in warmer, southern markets such as Mississippi, where it holds a 2.5% share of the hard seltzer segment, and Tennessee (3.1%). Wisconsin and Washington launched recently, and Pittsburgh and Philadelphia are launching this week, Mossman said. The brand will expand to Northern California next week.
“It’s a little bit like drinking from the firehose still on market launches,” he said. “But we think we’ll get to a point where pre-Labor Day we pretty much have the network set for this year and then we look to expand that network early next year as we start to move towards seltzer season.”