Sonic Hard Seltzer — the drive-thru fast-food chain’s collaboration hard seltzer brand with Oklahoma City’s COOP Ale Works — is now available nearly statewide in 30 states as part of the spring resets.
Speaking to Brewbound, COOP president Sean Mossman said the expansion gives the Sonic Hard Seltzer brand access to more than half of the U.S. population (54%) in the lower 48 states. The early returns in these new markets have been “great,” he added.
Sonic Hard Seltzer’s two variety packs and 19.2 oz. single-serve cans were previously in seven states, before rolling into 23 states as part of the spring resets. The company is working to fill out distribution in 17 additional states and has the start of networks in New York, Pennsylvania, Washington and North Dakota.
“It’s early in the sense of placements and distribution percentage being where we want it — that’s a build,” Mossman said. “But right now, the velocity where we are, dollars per point of distribution, is really, really strong. So we’re the No. 3 velocity brand inside Target nationally, we’re No. 4 velocity inside Walmart nationally.”
In the expansion markets of Tennessee, Louisiana and Illinois, Sonic Hard Seltzer is anywhere from the No. 3 to No. 4 brand in terms of velocity behind hard seltzer segment leaders Truly Hard Seltzer (Boston Beer Company), White Claw (Mark Anthony Brands) and Bud Light Seltzer (Anheuser-Busch InBev).
“Now the game for us is just to drill deeper in the markets that we’re in, one, and two, add additional states,” Mossman said. “We’ve already added five more under contract that will roll out before July 4, and continue to sort of move along a path to 47 states of distribution.”
The three exceptions to Sonic’s distribution expansion are Hawaii, Alaska and Utah, where lawmakers voted to shift sales of hard seltzers with ethyl alcohol from grocery stores to state-run liquor stores.
Year-to-date through April 30, the hard seltzer segment’s off-premise dollar sales have declined -6.2%, volume is down -12.5%, and dollar share is down -0.3% to 8.7% of the beer category, according to NielsenIQ. Despite those negative trends, Mossman said many wholesalers have noticed that the losses are largely coming from the top of the segment, with longtail players such as Sonic gaining share.
In Oklahoma, Sonic holds around a 7.4% share of the seltzer segment, Mossman said, adding that newer markets range from 4-6% of the segment.
“We’re adding more and more distributors almost every day, and we want to keep fleshing out that network for the long-term,” Mossman said. “This is a 15-to-20-year project for us, that by establishing that distribution network now we have the ability to innovate and plug new products and new opportunities in the network. And that’s not an easy thing to do in the current environment.
“There’s a real lack of access to market that exists out there for a lot of brands, we happen to have a brand that is gaining a lot of attention, and it’s been relatively easier from simply the fact that it is Sonic that we have to bring to the table,” he continued.
Mossman counted strong performance in grocery and liquor chains such as Kroger, Albertsons, BevMo, Binny’s and Specs, as well as big box retailers Walmart and Target. The focus now turns to regional grocery chains, such as Food Lion, H-E-B, and Houchens.
“The national sales team really queued up a lot of big wins for us and built a lot of credibility as we go into the regional chains,” Mossman said. “We continue to have success with places like Circle K on the convenience side, and we’re really starting to just dig in on the convenience side with the single-serves, especially.”
Two Sonic Hard Seltzer flavors, Cherry Limeade and Ocean Water, launched in 19.2 oz. single-serve cans in March, but Mossman said those may transition to 24 oz. cans in the future due to the more secure supply of the larger cans.
Who Drinks Sonic Hard Seltzer?
Asked who is drinking Sonic Hard Seltzer, Mossman said the drinker profile is primarily female, suburban, middle- to upper-middle class. He credited the Sonic “Drink Stop” campaign for helping build brand loyalty and bringing newer consumers into hard seltzer.
“That’s a big opportunity for us: The non-seltzer drinker that is a big fan of Sonic,” Mossman said.
New Sonic Releases, New Partnerships on the Way
Mossman teased Sonic brand extensions will hit in the fall, although he declined to share specifics.
In addition to Sonic, COOP is working on additional licensing partners for new products that will launch in early 2023. The company is now finalizing the formulation and packaging of those products and announcements should follow in the summer.
Filling the innovation pipeline is a major priority moving forward, including adding other FMBs or progressive adult beverages, Mossman said.
“We’re running multiple tracks: We’re selling and building out a team, we’re establishing a distribution network — a pretty broad distribution network with the best of them; and then at the same time, our marketing team is really trying to fill the innovation pipeline with either new licensing partners or brand extensions of the existing Sonic license,” he said.
COOP, Sonic Distribution Rights in OK Move to Molson Coors Network
At the end of April, COOP helped facilitate the sale of its statewide distribution rights for the beer brand and Sonic Hard Seltzer in its home state of Oklahoma.
COOP and Sonic were previously with RNDC for four years, but have since transitioned to five Molson Coors houses in Oklahoma — Capital Distributing in Oklahoma City, LDF Companies in Tulsa, Fisher 59 in Lawton, Pope Distributing in Enid and Jett Distributing in Clinton — beginning May 4. Mossman said the time was right to make the move with Sonic Hard Seltzer growing much larger and the craft beer business becoming more saturated at its key accounts in its home state.
“While RNDC has been a great partner for four years, we needed to be with a network that can take us to places that maybe they’re not entirely prepared to go – to independent convenience, smaller regional convenience chains – and so there’s a lot of opportunity moving to the new network that we want to take advantage of,” he said. “But it was simply a recognition of the fact that our partnership had gone as far as we can take it in regards to growth and we needed new partners.”