Brewing Trends: Strong Times for Hard Seltzer | Brewing Industry Guide

Brewing Trends: Strong Times for Hard Seltzer

There’s no denying the popularity of hard seltzer—the beverage success story of 2019. Unlike with beverage fads of the past, brewers large and small are betting on the bubbly longevity of hard seltzer, and they're poised to pivot to whatever comes next.

John Holl 14 days ago

Brewing Trends: Strong Times for Hard Seltzer Primary Image

Josh Grenz was walking through a local liquor store in Colorado last autumn when he noticed—and how could he not—the multitude of hard seltzers that were dominating shelf space in what had traditionally been known as the beer aisle. He knew the time was right to get on board the carbonated-booze-water Express.

“We already keg up nonalcoholic seltzer in the back of the brewery for us to drink, and we have a lot of fruit purees in house for the IPAs we make,” says Grenz, the owner and brewer of Verboten Brewing & Barrel Project in Loveland, Colorado. “So this was a logical step and really fits requests we get from people who are looking for low-carb, gluten-free alternatives to our beers in the taproom.”

Beverage fads come and go. There have been sparkling wine coolers, the first iteration of Zima (and then last summer’s limited-edition return), hard sodas, and hybrids such as Four Loko, but nothing that has come before has landed with quite the impact of hard seltzer.

Grenz put the brewery’s pilot system to work and dedicated a 7-barrel fermentor to the pursuit of hard-seltzer making. He kept the recipe simple: water, dextrose, the house ale yeast, and yeast nutrients. Fruit is added for some flavor. At first, because of the cooler weather, it moved slowly. As the weather warmed so did sales. Regular batches were added to the production schedule. Outside accounts started calling for kegs.

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“Interest is still growing, for sure,” Grenz says. In mid-August, there was a stretch during which his brewery actually ran out of hard-seltzer stock. “I joked when we made our second batch that I was now the brewery’s head seltzer maker, but I actually like making them. They are fun and easy on the back because you don’t have to lift malt sacks.”

Why this trend has hit the way it has speaks to a larger trend happening in beverages today. There is an overall push toward lower-calorie, lower-carbohydrate, lower-sugar beverages. On the beer side, lagers, gose, IPAs, and others that fit into the session or “active-lifestyle” bucket—and even nonalcoholic beers—are getting more attention and innovation than ever. On the backs of that, Michelob Ultra became the third best-selling beer in America earlier this summer (behind Bud Light and Coors Light), thanks in part to its association with healthy living.

“I tell brewers all the time that when we opened Verboten, I stopped making beer for me and my buddies and started serving a wider audience. Craft beer has always been about what’s the next thing, the new thing, and the customers have been trained to look for that. Hard seltzer is the next thing, and it’s bringing in the beer drinkers and the folks who don’t drink beer.”

Billions in Bubbles

IRI, a firm that tracks beverage industry sales, says that since 2017 hard seltzer as a category has grown almost 830 percent; a quarter of that growth happened in the first 7 months of 2019.

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The statistic that has brewers most interested—and maybe concerned—is that IPA, the most popular style of craft beer, has now fallen behind hard seltzer. One market analyst told Business Insider that if the growth continues, the category could grow to $2.5 billion in sales by 2021, dwarfing its current $550 million mark near the end of the summer.

Independent Fizz

Late last year, the Brewers Association amended its definition of “craft brewer” for its members, and noticeable in the change was that brewers no longer had to have beer as their primary beverage output. This was especially important to members such as the Boston Beer Company, which, in addition to Samuel Adams beers, makes Twisted Tea, Angry Orchard Cider, and Truly Hard Seltzer, all of which are significant parts of the business.

It also freed up smaller brewers to diversify portfolios and explore other beverage categories, such as canned cocktails, coffee, cider, and seltzer. As younger drinkers continue to show a lack of loyalty to a single category, the smartest option for breweries is to diversify.

In announcing the change of the definition, Brewers Association Director Paul Gatza said the word “traditional” was dropped from the guidelines because it had become “outdated because craft brewers, seeking new sources of revenue to keep their breweries at capacity and address market conditions, have created new products that do not fit the traditional definition of beer.”

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Big-Company Blitz

Because of the dollars at stake, the hard-seltzer makers are pulling out all the stops in an effort to grab as many consumers as they can. The biggest brand in the country right now by a country mile is White Claw, which is owned by Mark Anthony Brands, the company behind Mike’s Hard Lemonade. Truly Hard Seltzer is owned by Boston Beer Co. Bon & Viv Spiked Seltzer is owned by AB-InBev. Other breweries such as Corona have gotten into the space. MolsonCoors rebranded its Henry Weinhard brands for hard sparkling water use (the name was once a proud one in Portland, Oregon, beer history) and is still making hard sodas, too.

Pabst, which is also trying to introduce other alternatives into the mix, noticeably “hard coffee,” announced in August that it would be testing an 8 percent ABV hard seltzer flavored with lime. Four Loko threatened on social media to release a hard seltzer with three times the normal alcohol. Another new entrant is a line of hard seltzers under the Natural Light label, which is looking for follow-up from its strong success this past summer of Naturdays, a light-beer-and-lemonade hybrid.

This autumn saw the creation of an all hard-seltzer festival (Fizz Fight in Denver, Colorado), and nonstop TV and radio ads try to get folks to taste all the new flavors, from rośe to mango to all manner of citrus and beyond.

Interestingly, when Boston Beer announced that comedian and actor Keegan-Michael Key would be doing television spots for Truly Hard Seltzer this autumn, it specifically highlighted taking on other beverages, including the one that built the original company.

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In the ads, according to a press release, Key “reveals why drinkers should reach for Truly instead of beer, wine, or spirits.” That’s right. Drink hard seltzer, not beer.

Other Avenues

It’s also easy to point to the success of hard seltzer because of the big success of regular seltzer. Sales of nonalcoholic seltzers have grown over the past several years, led by brands such as La Croix and Polar, while soda sales have slowed or declined.

There are brewers getting into the nonalcoholic-seltzer business as well. Lagunitas has ramped up production of its hoppy carbonated water and continues to grow its footprint. In Wyoming, the state’s oldest brewery, Snake River Brewing, is going its own way by releasing a hoppy sparkling water as well.

It’s not unlikely that breweries that already offer carbonated water to visitors in their tasting rooms could soon start packaging the same for sale to get a piece of that beverage action as well.

Continue to Trend?

What this round of seltzer madness has mainly taught smaller brewers is to pay attention to the trends, especially when it comes to what the industry titans are putting out and customers are gobbling up. While not many craft brewers jumped on the hard-soda bandwagon, the few who did saw modest but limited success as the category quickly wilted.

“We kept hearing that light or session would be the next trend,” Grenz says. “But this is it. Americans have a fondness for sweet drinks, and while our hard seltzers are more on the dry side, there’s no denying that bent toward sugar. Hard seltzer fills that need.”

In a few weeks, Verboten will start canning their seltzers with Grenz hoping to see them on the shelves at his local store among all the others soon after.

John Holl is the author of Drink Beer, Think Beer: Getting to the Bottom of Every Pint, and has worked for both Craft Beer & Brewing Magazine® and All About Beer Magazine.

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