Samuel Adam-maker Boston Beer Co. recently saw its stock bubble up. The rise came during the summer of 2019, not through its traditional Boston lager, but through a relatively new product that has taken the Flavored Malt Beverage (FMB) market by storm. Whether you call it “hard” seltzer or “spiked” seltzer, the simple concoction of water + bubbles + alcohol has become more than just a niche product in the minds of the modern beer drinker. The newly developed sector of fresh and airy beverages is leaving its stamp on the millennial zeitgeist as influencers have labeled spiked seltzers “the unofficial beverage of summer 2019.”
For Boston Beer, its inclusion into the FMB market (and seltzer sub-market) came with the introduction of Truly Hard Seltzer in 2016. The seltzer came to life competing against early brands including spiked seltzer forefather, SpikedSeltzer, now labeled Bon & Viv under Anheuser-Busch, and current industry-leader White Claw by Mark Anthony Brands. According to Bloomberg, Boston Beer’s acceptance of non-beer products, along with their $300 million deal to buy Dogfish Head Brewery, lead to record-high shares for the Boston brewer. The company’s stock ticker was up by more than 60% year-to-date as of July 2019, with stocks at the time selling as high as $395.48. Citing this data, Bloomberg reported that the rise in sales of spiked seltzer and Boston Beer’s RTD offerings helped mitigate the cost of the company’s Angry Orchard Rose soft launch and its declining sales of beer.
A new generation of drinkers has brought fresh perspective and buying power into today’s beer market. Whether it’s for health-conscious reasons, dietary preferences or a rising sobriety movement, millennials are not drinking as much beer as their generational predecessors. A CB Insights study concluded that beer had lost 10% of its market share to wine and hard liquor between 2006 and 2016. Beer companies responded to this change-in-market by providing drink alternatives that appealed to their changing demographics. Brewers are now experimenting with kombucha, making low or non-alcoholic beverages and substituting alcohol for other enhancers like CBD and cannabis-infused drinks.
While beer sales are experiencing a drop, spiked seltzers have risen to take their place, speaking to the millennial drinker’s sensibility in ways we haven’t seen before. Millennials love spiked seltzers because the beverage presents itself as a “healthier” alternative to beer, with the term “healthy” being used to describe having fewer calories. Brewing companies promote this concept by printing the calorie count directly on the can alongside dietary preference disclaimers like keto or paleo-friendly. With a typical spiked seltzer hovering around 100 calories or less – compared to a hearty 300-calorie IPA – brewing companies can provide a light alternative to beer that health-conscious millennials can, in theory, drink all day.
Spiked seltzers appeal in more ways than just a wellness approach. The category has also become a status symbol for the social-media-savvy consumer. Ready-to-drinks (RTDs) have taken a prominent space in the market for many years now, with Four Loko, Smirnoff Ice and Make’s Hard Lemonade once being the lubricant of choice for ephemeral college nights. But despite being as inexpensive as these brands, spiked seltzers have surpassed their RTD counterparts by presenting themselves as a more sophisticated beverage. Spiked seltzers are also considered gender-neutral. Unlike the effeminacy of wine coolers or other RTDs, spiked seltzers can appeal to both women and the more “evolved bro” who can crack a joke about his masculinity while enjoying a crisp drink. The status symbol recognition of these drinks appears on the Internet as stunts and parodies of those consumers who follow a particular brand. Beer companies have allowed these consumer-generated social-media stunts to propel their brand image and cash-in on sales, as millennials are curious to try the spiked seltzer offerings of their favorite craft beers.
The same CB Insights study that showed the generational drop in beer consumption also mentioned that consumers who drink beer are more likely to purchase craft beer over big-brand names. This allows craft brewers the opportunity to clinch the spiked seltzer market in their towns. Many independent breweries are excited to convert their malting process into sugar fermentation, from which spiked seltzers typically get their alcohol content. While some believe this trend may leave a negative impact on the brewing industry, evidence suggests that spiked seltzers are here to stay. A 2019 Vox article pointed to a UBS analyst who projected that the spiked seltzer market could be worth up to $2.5 billion by 2021.
As trends in the market come and go, REA JET can help your company adapt to the ever-changing demands of the craft beer industry. Whether you’re changing a product or introducing a new line, REA JET can offer the marking and coding solutions that will help you seamlessly transition and grow. As the leading provider of coding and marking technology, REA JET guarantees high quality marking solutions for your cases, cans or bottles through our state-of-the-art, next-generation printers.
To learn more about our, high-resolution coding and marking technology for the craft beer industry, visit REA JET today.