Going in hard on seltzers
Although still in its infancy in the UK, the hard seltzers category looks like it has plenty of potential with UK consumers. Sonya Hook reports:
The UK’s hard seltzer category is currently worth more than £10.4 million (CGA and Kantar, year to November 2020) but is forecast to reach around £600 million by 2025, equivalent to the current size of the RTD category (Nielsen, October 2019-August 2020).
It’s already big business in the US where retail sales reached $2.7 billion (£1.9 billion) last year (Nielsen, US offpremise, year to June 13, 2020).
UK consumers may not want the same from this category as their US counterparts, so predictions can vary, but potential growth of more than £500 million in just a few years is clearly not to be ignored.
Last year’s pioneers are confident that people are ready to discover and buy into this sector and, having had months to test the market, these producers now have a clear idea about which macro trends will drive hard seltzer growth.
Nick Graham, co-founder of Berczy hard seltzer, says: “It’s very early days but hard seltzer has certainly arrived in the UK and looks to be here to stay. The big players are pumping money into the category and raising awareness around the benefits [of drinking hard seltzers] to traditional RTD cocktails and G&Ts.
It seems to be a huge hit with the UK consumer so far, and all the forecasting shows a very similar growth trajectory to what was seen in the US.”
One of these big players is White Claw, now the number one hard seltzer for both value and volume in the US and UK, worth £2.8 million [UK] and with 37% share of the market. It is available in four flavours in retailers including Tesco, Sainsbury’s, Waitrose, Co-op and Whole Foods as well as a number of key on-trade outlets.
White Claw launched in the US in 2016 and off-trade sales director Matt Rounding says in the UK the company has seen similar consumer needs, early adoption and “brand fandom” in its initial months.
Rounding says: “We know that our UK audiences, much like the US, are looking for a refreshing alternative to high-abv spirits, sugary RTDs and high-calorie beer. White Claw isn’t just a drinking experience, it’s a lifestyle choice, as there is no need to compromise between a healthy and active lifestyle and enjoying a social life.”
Jessica Markowski, convenience sales director at Budweiser Brewing Group, believes staycations and outdoor events will drive sales this summer.
Last year the producer brought over its Mike’s hard seltzer brand, which it says was the second fastest-selling hard seltzer in the last 12 weeks of 2020. In recent months it added Bud Light Hard Seltzer.
Markowski says: “As we prepare for the final easing of pandemic restrictions, we can expect to see seltzers play a notable role in this summer’s social gatherings. In 2020, the seltzers category saw a 36% uplift in sales in July and August. Looking to 2021, where once we would have seen consumers planning for summer holidays, in the coming months the focus will be on staycations and socialising outdoors and at home, creating an opportunity for lighter drinks, such as seltzers, to thrive thanks to their refreshing nature and easyto- drink format.”
Kopparberg is also predicting hard seltzer interest this summer. The producer says its Mixed Berries and Passionfruit flavours have been a success, and this has led to the recent introduction of a Strawberry flavour.
Rob Salvesen, head of marketing, says: “We believe Kopparberg has managed to find the perfect balance of subtle and refreshing with a punchier flavour than other brands on the market. For those looking for a light, lower-calorie alternative, this is the drink of the summer.”
Other producers with a foothold in the UK market are predicting a big jump in awareness for both the category and brands within it this year.
Oli Clements, director at Drty says: “We will start to see brands carving out more definitive positionings and the category will really start to compete with the big boys on the booze shelf.”
Clements also notes that, although hard seltzers are stealing share from beer in the US, data in the UK market shows the hard seltzer drinker is more likely to be an RTD fan or fruit cider drinker than they are a beer drinker.
He adds: “This might change as the category becomes more established. In our Drty Hard Seltzer Handbook we found that only 25% of beer drinkers would try hard seltzers if available, compared to 40% of cocktail drinkers.”
Sussex-born Arrowtown, which has 70 stockists across the south, agrees there has been a general increase in awareness for the hard seltzer category over the past year.
Co-founder Rob Smith says: “With the phrase ‘hard seltzer’ being alien to most UK consumers, there was always going to be an educational process required to teach consumers what a hard seltzer is and ultimately why you would drink it. It seems that the general level of awareness has increased significantly.”
Like many hard seltzers Arrowtown’s two variants are low in sugar, but this required a careful focus on its taste profile, according to Smith.
He says: “UK consumer preferences are undoubtedly very different to US consumers’, as shown by the lack of traction gained by light beer this side of the pond. There’s no getting around the fact that us Brits have a sweet tooth, thus we knew our drinks needed to deliver the fuller flavour that UK consumers have come to expect from their alcoholic drinks.”
The growth of the wellness industry in the UK is aligned with the rise in popularity of hard seltzers.
This is an area Berczy hard seltzer has been exploring with its most recent flavour launch, Passionfruit & Turmeric.
Graham says: “It is our boldest flavour so far, and we’ve had some fantastic feedback from it – a lot of our customers’ favourite. After seeing turmeric take off last year in the wellness industry, combined with us loving its subtle kick, we loved the idea of incorporating it into our drinks.
“We have a huge focus on all-natural ingredients and reducing sugar levels in our drinks – subsequently they are also low calorie.”
Berczy was launched into the UK in November 2020 after a rebrand and a name change. It has recently secured listings with Planet Organic and Daylesford Farm Shops.
Sentz is another that relaunched and rebranded after its initial introduction as Sence. The revamped brand hit the market earlier this year and the company says initial feedback for the range has been positive.
Founder Xavier Warburton says: “The health and fitness trend has excelled, along with consumers becoming more comfortable to make purchases online. Many consumers are now keen to try a low-calorie option and want to have a good time guilt-free, more than ever.”
Warburton says the category has two core consumer groups in the UK. One is millennials and the second is older women with disposable incomes, who are looking for an alternative to a glass of wine or a G&T. Both audiences want a clean, clear and light drink that tastes delicious and “gives them a buzz without the carbs and calories”, he says.
Two Brooks also points to these two consumer groups. Co-founder Francesca Bruni says Two Brooks is a unisex drink aimed primarily at 25 to 45-yearolds. However, the producer has also identified a valuable secondary target audience of 46 to 65-year-olds.
Bruni says: “This group has an entirely different way of consuming our products, and typically uses our seltzers for cocktail creations, or as a tonic replacement for elevated G&Ts.
“We’ve found that the gin community has been extremely receptive to hard seltzers, especially valuing their light and fresh taste, and appreciating the less traditional flavours of our seltzers.”
Bodega Bay says its target healthconscious consumers – generally aged 18 to 27 – also seem to be switching from premium G&T brands “for mid-week and mid-tempo occasions”.
Founder Charlie Markland says: “Our target market is young professionals attempting to live a healthy lifestyle alongside a hectic day to day life.”
Bodega Bay is now the number one selling hard seltzer in the on-trade, according to Markland. It has listings with big on-trade players but can also be found in Morrisons, Tesco and Booths.
Budweiser’s Markowski agrees that the popularity of hard seltzers is driven by consumers seeking a more balanced lifestyle. She says: “Almost a third of adults have put a greater emphasis on healthy eating since the outbreak [of Covid-19] began. With fewer calories, carbohydrates and sugars than popular beers and wines, hard seltzers are perfectly positioned to meet this demand.”
And Drty, which launched in 2019, has secured a number of listings with premium health-focused retailers, proving its target market is also aligned with the wellness trend. The brand is now listed in Ocado, Whole Foods, Planet Organic and John Lewis. It can also be found in premium independent convenience stores across the UK.
George Blurton, sales and marketing director at Long Shot, also points to the UK popularity of RTDs, which has been fuelled by the pandemic and could lead to growth in the hard seltzer market.
He says: “Previously, canned cocktails and the like might have wrinkled the noses of the more discerning drinker – but we’ve seen a big rise in quality across the category in recent years, which again helps pave the way for canned hard seltzers too.”
Another boost for the hard seltzer category’s alignment with healthier lifestyles comes from the British brand Served, which recently announced that singer/songwriter Ellie Goulding has acquired “a significant stake” in the business.
Goulding, a global goodwill ambassador for the UN Environment Programme, says her passion for health, fitness and the environment inspired her to invest in the brand.
Served is made in Herefordshire, where Goulding grew up. The drink is created by infusing sparkling spring water with “wonky fruit” and pairing this with the producer’s trademarked spirit to create a 4% abv hard seltzer with only 57 calories per can.
The brand now has more than 1,000 stockists including WH Smith, Selfridges, Planet Organic and Harvey Nichols.
Dean Ginsberg, co-founder, says: “Hard seltzers play into six mega consumer trends that are highly relevant to UK consumers and the modern health-conscious social lifestyle, particularly during a pandemic where people have been in lockdown for extended periods of time.
“These mega trends include wellness, reduction in sugar consumption, an increased focus on sustainability, lower-abv consumption, veganism and plant-based food and drink, and natural ingredients.”
Served also recently caught the eye of Justin King, the ex-chief executive of Sainsbury’s. King, who is also a nonexecutive director at Marks & Spencer, has invested in the business and joined the advisory team as senior board advisor.