Half a decade removed from hard seltzer’s breakout summer of 2019, we’ve got some clarity about what this phenomenon actually is. On one hand, it’s a bona fide, multi-billion dollar segment, a repudiation to the naysayers inside and outside the American beer business who refused to countenance its ascent, then downplayed it as a fad in hopes it would fizzle quickly. On the other hand, if you draw your lines around malt- and cane-based flavored alcoholic beverages — which, for the sake of accuracy and clarity, is what I’ll do in this column — hard seltzer has fizzled. Those frothy pandemic gains, the knock-on effects of genuine novelty, national pantry-stocking mania, and a historic channel shift to off-premise, packaged beer, have receded.
The reality is what’s left, and it’s this: Hard seltzer is White Claw, then everyone else. Truly? In trouble. Vizzy? Vanquished. Bud Light Seltzer? Buddy, you’d better sit down for this one. The brands that had the operational strength and circumstances to compete with Mark Anthony Brands’ (MAB) segment-defining hard seltzer at scale have simply failed to do so, for reasons we’re going to get into. The upshot, though, is a remarkable re-consolidation of the market.
“White Claw [now controls] over 60 percent of all dollar sales for the segment while most other leading brands seem to be continuing their bleed,” says Dave Williams, the president of Bump Williams Consulting, referencing NielsenIQ scan data. Unlike its one-time foes, which are in various states of free fall, the brand has stabilized, and is growing year-over-year (albeit slowly.) There are small brands still growing in the segment, but none of them are within an order of magnitude. I’ve seen enough: White Claw wins.
This victory wasn’t always preordained. Serious challengers to White Claw had a real opening at the outset of this decade, when interest was high and the segment was still defining itself to drinkers, distributors, and retailers. It’s also important to remember it wasn’t the first-mover in the space; that would be Bon & Viv (née SpikedSeltzer), which hit the market for the first time in 2012, a full four years before MAB’s flagship debuted in 2016. Anheuser-Busch InBev bought SpikedSeltzer that same year, which is also when Boston Beer Co. launched Truly. This wasn’t a rout off the rip.
Some close observers of the industry saw around the hard-seltzer bend anyway. “It remains to be seen how much the seltzer market is actually a segment and a category, versus a couple of very powerful brands,” the Brewers Association’s chief economist Bart Watson told VinePair’s Tim McKirdy in February 2020. He was right.
I think there are four main reasons that hard seltzer shook out as just one very powerful brand, and a lot of also-rans. To wit…
White Claw saw a gender-neutral niche and nailed it. Credit where due, the brand’s marketers understood early on that they’d have to get the United States’ hard-drinking jabronis comfortable with drinking a fizzy, fruity product in order to achieve meaningful scale. (American men drink more beer than women at nearly a two-to-one clip.) Gender-neutrality has been a brewing-industry holy grail for decades, but it’s a rare flavored malt beverage to strike that balance, as Zima, Smirnoff Ice, and so many others can attest. White Claw made that its marketing mission from the jump. “Whatever we put out creatively and how we positioned the brand really reflects that everyone [regardless of gender] hangs out together all the time,” Sanjiv Gajiwala, White Claw’s now-former vice president of marketing told The Washington Post in 2019. Crucially, the brand didn’t overplay the “Dudes Rock” idea, or any other aspect of its marketing: It only launched its first global marketing strategy in 2021. An unofficial assist from comedian Trevor Wallace, he of the “Ain’t no laws when you’re drinking Claws” slogan that dominated darties at the turn of the decade, gave insecure guys plenty of cultural cover to partake. (MAB sent Wallace a cease-and-desist for his trouble.)
Viable competitors biffed it. Not to take anything away from White Claw, but I can’t overstate how poorly major brewers responded to its rise. ABI’s 2019 mermaid-centric rebrand of SpikedSeltzer to Bon & Viv sent the pioneering brand skittering into feminine-coded irrelevance; being nested within its troubled, ever-shifting craft brewery portfolio probably didn’t help. “It was just, for us as a company, before its time,” North American chief executive Brendan Whitworth told The Wall Street Journal in 2021. Indeed. BBC turned Truly from a true No. 2 into a cautionary tale of bull-market optimism, line over-extension, and the importance of basic brand cohesion. Molson Coors tried to position Vizzy as vaguely healthy and Coors Seltzer (remember Coors Seltzer?!) as environmentally friendly — weird choices that helped usher the latter to a quick death and the former into a class-action lawsuit and case-hemorrhaging purgatory. I didn’t even remember Heineken’s hard seltzer play, but I looked it up: Sunrise, released in 2020 in collaboration with AriZona for reasons unknown. I don’t think there’s a major brewer in this country (call it 2 million barrels and up) that isn’t down double digits year-over-year on its hard seltzer offering these days. Marketing mistakes were made, and they were myriad.
The market got crowded, confusing, and downright silly. Also myriad were the followers that flooded into the market once White Claw (and, to be fair, Truly, before its tumbles) proved that American drinkers were thirsty for hard seltzer. Many of these arrivistes were comparatively tiny craft breweries: Near the height of the boom, circa May 2021, there were around 600 active SKUs in NielsenIQ-tracked off-premise scan data. Still, small players deserve small blame for overwhelming drinkers with half-baked, under-differentiated hard seltzers. The world’s biggest brewer, on the other hand, wasn’t done spinning the wheel after missing the mark with its mermaids. ABI threw Natural Light into the hard seltzer fray in 2019, followed by Bud Light in 2020, and Michelob Ultra at the top of 2021, plus CACTI (its hard seltzer collaboration with Travis Scott, which was dogged by quality, legal, and promotional issues) later that year. Between ABI pumping all these brands through its massive marketing and distribution apparati, BBC rolling out a seemingly endless parade of Truly packs, and a bajillion small brands angling for a piece of the market’s long tail, shit got confusing. White Claw, with its relative restraint, reaped the benefit.
A superior spirits-based alternative emerged. I’ll get a bunch of emails if I don’t note that High Noon exists, so: High Noon exists, and it’s obviously part of this story. Its spirits-based formula meant it wasn’t able to achieve ubiquity or price parity with hard seltzer right off the bat, but as drinkers got overwhelmed by, or just got over, malt- and sugar-based options, Gallo’s vodka-powered seltzer hit became a logical next step up the premiumization ladder. And then it started hitting hard. Recent NIQ scan data analyzed by Brewbound indicates “spirits seltzers” — which include brands like High Noon and ABI’s NÜTRL — are up 56.8 percent in dollars in the past 52 weeks compared to a year prior, while “malt seltzers” are down 15.6 percent. As the competition stiffens for bubbly booze water sales, White Claw’s dominant market position and longstanding value proposition has put it on solid footing to compete against spirits-based drink-alikes.
Williams, from BWC, is quick to point out that there’s still promising growth in the hard seltzer segment. Smaller brands like Nectar, Lunar, and Passion Tree are posting major gains in niches that White Claw can’t reach. And Happy Dad, from YouTube edgelords the NELK Boys, is a legitimate breakout on a not-so-small denominator: It’s now the fifth-largest hard seltzer brand in the market by dollars, and is up almost double since last year. It’s “one of the only brands able to gain any notable share” in the space, says Williams. Happy Dad fascinates me, and I’ve covered its rise before. But even with all that growth, its share is still just 2 percent.
That’s what passes for “notable” these days in the hard seltzer game, though. For the foreseeable future, it’s White Claw’s segment — everyone else is just trying to stay alive in it.
🤯 Hop-ocalypse Now
When Monster Beverage Corporation announced its plan to buy CANarchy Craft Collective in early 2022, the going assumption was that the energy drink giant was interested more in the turnkey distribution network than the breweries themselves. That’s more or less borne out, and as the craft beer market has softened, Monster has slashed jobs at pioneering craft breweries like Oskar Blues Brewing Co. and Cigar City Brewing. Meanwhile, its own flavored malt beverage line is going gangbusters, which is probably why in its official Q1 2024 earnings release, Monster namechecked both The Beast Unleashed and its hard-tea spinoff, Nasty Beast, and glossed over the rest of its bev-alc portfolio as “various craft beers and hard seltzers.” Ouch. That portfolio is up over 20 percent in dollars year-over-year, by the way.
📈 Ups…
Workers at Wicked Weed Brewing’s facility in Portsmouth, N.H., are going union with Teamsters Local 633… Teamsters at Molson Coors’ breweries in Georgia and Ohio have picked up pickets to spread word of Local 997’s ongoing strike on Fort Worth… Gird your gullets, American Craft Beer Week runs May 13–19 this year — that’s next week!… BrewDog’s controversial co-founder/chief exec James Watt resigned…
📉 …and downs
The overall beer category is down year-to-date in the off-premise, but craft beer is down more at -3.4 percent… Great Lakes Brewing Co. is on the hunt for a new chief exec after its current CEO stepped down… ABI’s American business remains “down bad,” as the kids say…
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