white claw

Surge in hard seltzer brands slow uptake

24 August, 2021

It has been a sobering quarter for hard seltzers. Sales of the canned RTD that disrupted the US alcohol market when it burst on to the scene in 2016 have finally stalled.

During the four-week period ending July 11, 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 in a single day 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 slowdown is more notable given the wild popularity brands have enjoyed. In 2019 the category posted year-on-year growth of 320%. According to Nielsen o-trade data, hard seltzers sold $4.41 billion in the 52 weeks to March 20, 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, White Claw 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 of 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 re ned ­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 among 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.”

CATEGORY EDUCATION

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.”





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Nick Strangeway

Bar food's blurred lines

Once upon a time pubs and bars were somewhere you went with the sole purpose of getting pissed and there wasn’t a knife and fork in sight, just a packet of dry roasted nuts.

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