The hard seltzers category has taken the US by storm, but can its success be replicated in the UK? Lucy Britner reports
'Plink, plink, fizz’. Those of a certain vintage will remember that this was the slogan for everyone’s favourite effervescent antacid, Alka-Seltzer. And for lots of Brits, the word ‘seltzer’ is still associated with the cloudy hangover remedy. Now, though, seltzer (which is just another word for carbonated water) has turned alcoholic. The US phenomenon has arrived on UK shores, with many drinks companies clambering aboard the bandwagon. Can America’s drink du jour make it on this side of the pond?
According to on-trade insights specialists CGA, hard seltzers generated $1.2bn in sales in the US on trade during 2019 – with 462% sales growth, while volume sales increased by the equivalent of 182 million 12oz cans.
The key question for many is whether British consumers will engage in the same way. Initial signs are positive
‘The key question for many is whether British consumers will engage in the same way. Initial signs are positive for the category, with 13.7 million consumers open to the idea of trying hard seltzers in the future,’ says CGA’s client director for drinks, Philip Montgomery.
With the outlook appearing healthy, we must first head back to the US to understand the key differences between the markets in order to assess the potential for hard seltzers over here. ‘It’s not a simple “plug and play”,’ says Davin Nugent, CEO of White Claw’s parent company, Mark Anthony Brands. White Claw, which has been around since 2016, is the leader in the huge US market, as well as top dog in the UK’s much smaller market, where it has only been available for a matter of months.
‘There’s a consumer education job to be done,’ says Nugent, highlighting an imminent £2m marketing campaign to extol the virtues of the category as well as the White Claw brand. He also points to the vast number of new entrants. ‘It’s very competitive already,’ he says.
One such newbie to hard seltzer is Chase Distillery. Director James Chase has just released a range of gin seltzers, inspired by his time living in the US in 2019.
He says there are several key differences between the US and UK markets: ‘The US has a deep understanding of what a seltzer and a hard seltzer is, the category has been around for a long time,’ he explains. ‘Whilst the UK has a strong cocktail scene, and knowledge of craft is certainly increasing, we are only just looking at healthier drinks that offer less sugar or contain fewer calories.’
Oliver Dixon is co-founder of the UK’s Something & Nothing brand. At the moment, Something & Nothing focuses on alcohol-free seltzers, which have just launched in the US following a couple of years on the market in the UK, but the company is planning to roll out alcoholic seltzers later this year.
‘We carried out an extensive research trip to the US last year and we can confirm hard seltzers are definitely a big deal,’ he says. ‘However, they are very mainstream, mass-market products, with big cans, big boxes, in big supermarkets. The ingredients are often poor quality and the flavours and brands are generic.’
Dixon says growth in the European beer, wine and spirits categories has been primarily driven by premium products.
Therefore, he feels it’s ‘unlikely the more mass-market products within the category are going to be as successful over here’.
Definition-wise, the US classifies hard seltzer with beer, says White Claw’s Nugent. In the UK, however, they are instead aligned with spirits. In fact, White Claw’s UK offer is spirit-based, while the US one is sugar-based. ‘They taste exactly the same,’ claims Nugent.
There’s also the word ‘hard’. When the US switched on to cider a few years ago, for example, launches were branded ‘hard cider’ because in the US, the word ‘hard’ means a drink containing booze. But some UK producers aren’t a fan of the term.
East London Liquor Company’s (ELLC) new 4% abv Pomegranate & Vodka Seltzer launch forgoes the word. ELLC founder Alex Wolpert says ‘hard’ ‘is a bit macho and a bit misleading’, likening it to the word ‘craft’ in the way that it’s bandied about.
Wolpert also points out that ‘can culture’ is ‘not as established’ in the UK market as it is in the US. ‘Canned drinks should be a treat and not a guilty pleasure,’ he says. ‘The fact that it’s in a can shouldn’t detract. It should be a good experience that you want to come back to, not just something you drink on a train.’
Quest for success
With all this talk of differences, can the category in the UK ever grow to the dizzying heights of US success? Former Diageo employee Oli Clements, who launched the DRTY brand along with fellow former Diageo colleague Matija Pisk in October 2019, says all the fundamentals are there for hard seltzer to be successful in the UK.
‘Aside from the obvious trends around calorie content, there are exciting brands entering the category with great-tasting products, and operators in both the on- and off-trade are backing the category with space on shelves and menus,’ he says.
‘Whilst the shape of the market in the UK might well differ to the US, we’ve seen more than enough since launch to suggest this is a category UK consumers will buy into for the long haul.’
Chase also points out that the UK has a long history of following US trends: ‘From craft beer to pulled pork and even the inspiration for setting up Chase, the UK’s first craft distillery in 2008.’ While he admits that the US market is larger, he has ‘no doubt it will catch on here in a big way’.
He adds: ‘The seltzer serve, or mixing a spirit with soda water, will only gain in popularity. And like the maturing gin category, all ships rise with the tide and a new influx of brands will certainly help create awareness and drive change.’
The current uncertain environment is also propelling brand launches as some come to the category out of necessity. Research and development projects are being accelerated in an active effort to keep businesses afloat in these strange and uncertain times. BrewDog’s Clean & Press is one of these projects.
‘To try to help our business get through this crisis we have been fast-tracking some of our innovation projects,’ BrewDog said back in May, when the brand launched. The development time for Clean & Press, which carries four flavours, shrank from 12-18 months to ‘a few weeks’.
‘We wanted to put a craft BrewDog spin on this emerging category,’ the brewer explained. ‘Rather than being fermented like the US seltzers, our Clean & Press seltzer is spiked with our... single malt vodka, Rogue Wave.’
What's in the can?
Like BrewDog, many producers are keen to highlight what’s in the can, and there is no doubt the category’s foundations are built on health and wellness trends. Most cans boast a calorie count as well as highlight natural ingredients or the absence of any added artificial sweeteners.
At Bodega Bay, head of marketing Luis Coutinho believes hard seltzers are well placed to answer trends around wellness and convenience. He says the category is opening up drinkers to the fact that it doesn’t have to be ‘an either/or option’.
Coutinho says consumers can choose a low-calorie, naturally flavoured drink. When you get in closer, ELLC’s Wolpert warns that transparency is key.
'We have a pedigree in making spirits. That’s what we hang our hats on, so we really want to be “spirit first”. There are a lot of seltzers that don’t – and you don’t need it – but we wanted to lead with that because we felt that being transparent about what is in the can is really important.
‘If you look on some of the cans, they don’t have ingredients and if you go on their websites, you have to look quite hard... that, to me, seems crazy.’
Wolpert is also wary of linking alcohol to health and wellness. ‘What I would say is along the same lines as our 0.5% abv gin and tonic in a can: if you want less alcohol or fewer calories, we have an option.’
He also points to the quantities of sugar in normal carbonated soft drinks. ‘By reducing the sugar amount you are appealing to the more health-conscious drinker. Appealing to a health-conscious drinker is great; trying to crack into the wellness category is a little bit immoral.’
With some ambiguity around what is in the can, could there be some scope for introducing tighter definitions?
‘There is always going to be market dilution as brands strive for a way to find new ways of creating interest,’ explains Bodega Bay’s Coutinho.
But DRTY’s Clements is eager to make sure that we don’t get too bogged down in rules and definitions. ‘This isn’t Champagne!’ he says. ‘We see innovation as a good thing and a great way to attract different types of consumers into the category.’
We see innovation as a good thing and a great way to attract different consumers into the category
He talks about gin as an example of a category success story. ‘There have been product launches in that category that purists would argue don’t adhere to the traditional definition of what a gin is, and yet these products have played a key role in attracting new drinkers into the category, ultimately contributing massively to its growth.’
Clements says the future will be fast-moving for the sector, with expansion into other markets and more brands entering over the coming months and years. Bodega Bay’s Coutinho is hoping for ‘world domination’, after a reported 4,000% growth since lockdown started.
The company now has Molson Coors Beverage Company as its exclusive distribution partner, with exciting plans to scale its business internationally, targeting Western Europe, Australia, Japan and South Korea.
And what about White Claw’s Nugent? ‘I genuinely believe the category is going to be huge’, – this from the former MD of Kopparberg, who helped kick-start the fruit cider craze in the UK.
Looks like hard seltzer really is set for world domination.
THE ON-TRADE POTENTIAL
There’s no question that canned drinks fit neatly into the off-trade, but hard seltzers are a category on their own and several pundits can see scope for this boozy, fizzy water behind the bar.
‘Understanding the consumption preferences of potential consumers is going to be paramount in these first steps of seeding these brands,’ says on-trade insights specialist CGA’s Montgomery.
‘CGA research shows that the prospective hard seltzer consumer is already more likely to
consume spirits, cocktails and cider than the average consumer, so positioning these brands among that cohort is going to be key for long-term success. Hard seltzers have the potential to shake up an already pretty turbulent on-trade this summer.’
Bodega Bay already counts Drake & Morgan, Incipio Group and Darwin & Wallace among its on-trade stockists: ‘We are proving there is a trade-wide appetite to list carefully curated hard seltzers to serve the healthy hedonists out there,’ says Coutinho.
ELLC’s Wolpert also sees potential for certain outlets. ‘It’s much more of a specific market,’ he explains. ‘Higher volume, rooftop bars, music venues, festivals.’ In fact the company had planned to launch its hard seltzer brand at festivals this year. ‘They got canned. Pardon the pun.’
Wolpert’s keen to stress, though, that these drinks will never replace classic cocktails or the theatre and experience associated with them.
‘If hard seltzers can add something to your customers’ experience in terms of speed, quality and consistency, then brilliant. But if the bar can do better, then they should, because it’s all about customer experience.
It’s not a substitution by any stretch of the imagination but [hard seltzer has] definitely got legs in the on-trade.’
This article was first published in the autumn 2020 issue of Imbibe.