During the 4-week period ended 11 July, US sales slowed to 4% growth with fewer new customers entering the fray. Shares of Boston Beer Company, which owns the market’s second most popular hard seltzer brand Truly, lost a quarter of their value last Friday after chief executive Dave Burwick said in a statement that the company "overestimated the growth of the hard seltzer category in the second quarter and the demand for Truly, which negatively impacted our volume and earnings for the quarter and our estimates for the remainder of the year."
The company blamed the flood of new brands for causing “consumer confusion”.
The market slowing is made more notable given the wild popularity brands have enjoyed. In 2019 the category posted year-on-year growth of 320%. According to US NielsenIQ figures for off-trade sales, hard seltzer sales totalled US$4.41 billion in the 52-week period ending on 20 March 2021.
For the time being, however, category leader White Claw seems unaffected. Sales powered by memes and social media increased at a triple-digit annual rate from its 2016 launch to 2020. And the brand is now available in 15 countries.
By positioning itself as a healthier alternative to beer, the brand was able to engage with a new, elusive customer base that has been so difficult for alcohol brands to reach.
“Consumers are seeking ‘better for you’ options to suit their active lifestyles,” says Davin Nugent, chief executive officer at White Claw.
“They have become less interested in beer and sugary drinks, with their associated high calorie and carb content. Taste expectations have also changed with consumers increasingly gravitating towards more refined flavours, rather than sweet, intense tasting products.
“As a result, consumers are expecting more from their drinks and are actively seeking new taste experiences without having to compromise. The brand also comes with no baggage, it is a modern brand that appeals to men and women in equal measure. “
Without baggage, the brand has found a home on social media and amongst the notoriously difficult-to-please gen Z drinkers, with impressive interest.
“The numbers are staggering,” says Nugent. “Last year alone White Claw fans generated over 4 billion impressions, 46 times more social media mentions than competing brands in the US.”
And youth engagement seems to be a strategy that the brand is continuing with a UK launch that includes an exclusivity partnership with the hyper-local 10-minute-groceries app Gorillas.
“UK and Irish consumers have less knowledge about the category, which is why we take our category education role seriously,” says Nugent.
“However, the initial signs are very positive. We lead the category across all the markets we have entered so far, including the UK and Ireland. We believe that universal, global trends and needs drove the US growth and that similar dynamics are at play in the UK and Ireland.”
