Hard Seltz shakes up the alcoholic beverage industry on the North Coast
The North Coast has carved out a venerable reputation for itself in the craft alcoholic beverage sector, from its wine made from organically grown grapes in the Russian River Valley to rye harvested in Petaluma for use. in whiskey or from the expertise of regional brewers.
But over the past year, the industry has been rocked by a decidedly non-artisanal product: hard seltzer water. It is a low-alcohol drink filled with various fruit flavors produced in interchangeable factories across the country. A customer can purchase a multipack of cans or bottles for less than $ 20.
He was first ridiculed as Zima’s Second Coming – the clear, tasteless booze of the 1990s that then turned into a punchline for people like late-night talk show host David Letterman. No one is laughing now after $ 3.2 billion worth of hard soda was sold a year ago in retail stores, according to Nielsen. It was a small but rapidly growing slice of $ 145.2 billion of total alcoholic beverage retail spending last year.
During the pandemic, consumers bought even more seltzer water. From March to August, sales to the United States were $ 2 billion, more than double the total for the same period last year.
” We’re only just starting. I don’t think it’s a fad at all, ”said Jon Sebastiani, founder of investment firm Sonoma Brands, which owns a minority stake in Vintage Wine Estates and oversees the management of the Viansa winery.
Viansa plans to launch a wine / kombucha drink called Raye early next year which will be produced with grapes nominated by the vineyard and priced higher than typical seltzers.
“I think for any maker, especially wine or beer, they just have to consider entry into (seltzer hard) space,” Sebastiani said. “It’s already big and I think most people will believe it will be a lot bigger.”
Consumer enthusiasm for seltzer water spills over into the region’s craft beer and wine sectors. The producers are paying attention and trying to determine if there is an opportunity for them.
Barrel Brothers Brewing Co. of Windsor, known for its wide variety of craft beers ranging from porters to various Indian lagers, in April launched a drink called Seltzer In Place. It started with a black raspberry flavor and now has a tropical lime hard seltzer for sale on its website. A seedless watermelon flavor is coming soon. The drinks contain only 100 calories per can with an alcohol content of 5%.
A major draw for young drinkers is the low calorie content, said Bart Watson, chief economist at the Brewers Association, which represents independent brewers. Hard salt now accounts for up to 10% of the total value of beer sold on U.S. retail shelves, he said.
“People want different attributes than they wanted (before). So things like gluten-free or low-carb or no-carbs are more appealing to people, ”Watson said.
Also, many drinkers are intrigued by a new drink to keep their interest, said Wesley Deal, co-founder and brewmaster of Barrel Brothers.
“It’s a complement. You can have your beer and if there’s someone in your party who doesn’t like beer, try Seltzer, ”Deal said. “It will always be a good plus one.”
The big challenge, he said, is whether consumers will pay more for a homemade soda water product like Barrel Brothers’ hard seltzer water priced at $ 12 for a pack of four of 12. ounces.
The US hard soda market is dominated by two companies: White Claw, owned by Mark Anthony Brands, maker of Mike’s Hard Lemonade, and Truly, owned by Boston Beer Co., maker of Samuel Adams beers. The two brands had a combined market share in the United States of more than 75% in the latest available data, according to Nielsen.
Other regional and national beer and wine producers such as Corona, AB InBev and Gallo are joining the fray. In 2018, according to Nielsen, only 10 brands of hard seltzer were on the market. This has grown to 26 brands at the start of 2019 and to over 65 this summer.
Last month, the iconic Coca Cola said it would take its famous Topo Chico mineral water brand from Mexico and make it a hard version of seltzer. The move was of interest to industry analysts who noted Coca Cola’s disastrous entry into the wine market in the 1970s when it bought Taylor Wine, and withdrew a few years later.
“I wouldn’t bet a lot on the success of Coke,” said Jon Moramarco, wine industry analyst.
He said that while Coca Cola may have distribution capabilities, it likely does not have business partners who properly understand the alcoholic beverage industry.
Executives of alcoholic beverage companies are trying to understand the seltzer water market. Heavy seltzer drinkers remind Moramarco of the baby boomers of the late 1970s who clung to white zinfandel and wine coolers, and he believes they’ll eventually look to branch out into more premium drinks. .