At a time when people are drinking less alcohol and looking for “healthier” options, hard seltzers – alcoholic, low-calorie carbonated waters – are creating quite the buzz. Kim Berry writes. This article was first published in Food & Drink Business July/August 2020.
The hard seltzer market in the US is experiencing phenomenal growth. In 2019, on-premises sales grew five-fold in 2019 to US$1.2 billion.
US drinks market analysts IWSR forecast consumption would triple in the US by 2023 to more than 281 million cases. It found hard seltzers – whether from a wine or spirits base – control about 2.5 per cent of the US alcohol market.
When Carlton & United Breweries launched its first hard seltzer beverage in the Australian market, Actual Vodka Seltzer, its senior marketing manager Marc Lord said CUB thinks the category’s phenomenal growth in the US can be replicated in Australia.
Lord says: “The hard seltzer market grew from nothing to become a multi-billion-dollar business in just five years in the United States. This is the next big thing here in Australia, and that’s why Carlton & United Breweries created Actual.
“Consumers now want simple, no-nonsense alcoholic drinks and that’s what Actual is. Standing in front of the RTD and craft beer fridges with thousands of flavours it’s hard to make a choice, so we’ve made it simple.”
Brandy Rand, COO of the Americas at IWSR, says: “The rise of hard seltzers shows there was a segment of consumers underserved by the current beverage alcohol market who were looking for alternatives that were refreshing and flavourful, but also low-calorie and low-sugar.”
The Australian hard seltzer start-up Fellr is the creation of two seasoned drinks marketers Andy Skora and Will Morgan. They told Food & Drink Business that they realised there was a serious lack of pre-mixes that people were proud to serve.
The ready-to-drink (RTD) sector had experienced the independent craft beer movement and the premiumisation of spirits, but there was space in the independent RTD market that Skora and Morgan decided to chase.
Morgan says it is less about a seltzer boom and more about tapping into the health call out that is so prominent for consumers now.
“People are automatically moving to a healthier style of drink. No sugar is one of the biggest call outs at the moment, shifting people away from beer. Being gluten free and low sugar are going to be the new norm for RTD.
“Seltzers have struck a chord because they have a brewed base – they are more sessionable with less carbs, less sugar and less artificial ingredients than other RTDs. There are no candy flavours, so it offers drinkers quite a bit and that is unique,” Morgan says.
Meanwhile, Lion has partnered with Mark Anthony Brands International to bring North American White Claw Hard Seltzer to Australia.
White Claw launched in 2016 and has grown to claim 60 per cent market share in the US seltzer category and is almost three times the size of its nearest competitor, Lion says.
Lion Australia MD James Brindley says its popularity in the US makes it a global market leader. “It is a natural fit for our growing portfolio of adult beverages beyond our core beer range – and taps into a number of consumer trends around lower calorie and lower sugar products.
“We believe the seltzer category represents a significant growth opportunity for Lion over the coming years and we are looking forward to bringing the biggest seltzer brand in the world to Australia.”
Skora says: “We knew it was mandatory for Fellr to have all-natural ingredients, low sugar and be gluten free. But we wanted to prioritise flavour, so we’ve retained less than one gram of real fruit sugars to maintain a fresh and real fruit taste. And we’ve still managed to make one of the lowest calorie drinks on the market.”
For the Fellr founders, the health cues will be expected by consumers. “People love a good brand story and they also want something they’re proud to share on their socials and with their friends. Craft beer has really nailed that but premixes haven’t.
“Our tagline is the core we jump from: the drink from the land of fizz. It is about capturing the Australian energy of people getting out and having an awesome time,” Morgan says.
Another point of difference in the category is the use of slimline and sleek cans. Fellr’s can features a matte finish with a gradient graphic on a slimline can. The company worked with Visy to develop the final product.
Morgan says it is very early days for seltzers in Australia. “The US is a very different market to Australia as it didn’t have an established RTD market. Australian consumers are familiar with the concept but this new entrant to the market is exciting.
“This summer is when it will make its mark. It will be the new norm for RTD and beverage.”