Nielsen insight: hard work will engage consumers
Innovation has been everywhere in the off-trade this year: canned wine is now a staple in UK supermarkets, the ready-to-drink category has exploded and you can even find hemp-infused drinks on the supermarket shelves.
The next wave of innovation to hit the off-trade will take inspiration from our friends across the pond. Think about an iced tea or coffee, or a cold bottle of kombucha, or even a refreshing sparkling water. Now, add alcohol and, voila, you have the next boozy beverage trend. Introducing: hard tea, hard coffee, hard kombucha and hard seltzers. Hard seltzers can best be described as a blend of fizzy water and alcohol with a fruit flavouring, and are attractive to some thanks to their lower calorie content.
I caught up with our Nielsen colleagues in the US to try to understand a little more about this trend and to get a steer on what this could mean for the UK off-trade market. The “hard” trend in the US was born out of manufacturers looking for ways to meet shopper demand for new and different healthier alcohol options. Innovation in this space took inspiration from the fast-growing types of soft drinks, such as seltzer, kombucha and the latest cold versions of traditional hot drinks. Alcohol was added and the “hard” trend began.
In the US, these latest innovations have worked well to attract younger shoppers to the category, and the most popular occasion that the new hard seltzers are being purchased for in the US are relaxing at home or for celebrations.
The UK soft drinks category has seen sales growth through the increasing popularity of cold variations of hot drinks, kombucha and even sparkling water. We’ve started to see glimpses of hard seltzers in the UK with the introduction of Balans into some stores and, considering the UK off-trade has seen spending decrease from the younger age groups, this could be a way to capture spend, drive new occasions and re-engage millennials.
It’s been four years since the hard seltzers category was launched in the US, and it’s now worth $1 billion, so the growth opportunity here is substantial. We are not going to see a sudden influx of these offerings at once in the UK.
It will be phased, and hard seltzers will likely hit the market first. Interestingly, in the US two-thirds of hard seltzers sales are through mixed flavour multipacks, whereas the RTD category in the UK is dominated by single can offerings to drive experimentation. I expect we’ll see key seltzer flavours from the US make their way over in the form of stone fruit and citrus in single cans. If hard seltzers can create similar success here, the category could be worth around £20 million in the coming years, and one of the top US brands, White Claw, has already registered its trademark in the UK.
Though some of these drinks might sound a little obscure, there is no doubt the market will be injected with these products over the next couple of years. You only have to research White Claw to see the fuss it has created in the US and the excitement that it, and other hard offerings, could bring to the UK.