ALEXANDRIA, Va.—The success of hard seltzer brands is changing the alcohol industry, and manufacturers are gearing up for a big summer of sales, reports BusinessInsider.com. Alcohol sales were up about 2% in 2020, while ready-to-drink sales including seltzers and canned cocktails rose 43%, according to IWSR Drinks Market Analysis.
In convenience stores, alcoholic beverages comprise 8.6% of total inside c-store sales and contribute nearly 4.9% to margin, according to NACS State of the Industry data. Ready-to-drink products such as hard seltzers and canned cocktails continue to surge, in part driven by increased demand for low-carbohydrate, low-sugar, low-calorie drinks, NACS Magazine reports. Within the wine category, the coolers/wine cocktails subcategory was the fastest growing last year as average sales increased 30.1% in 2020 off a relatively large base in 2019, SOI data indicate. Read more NACS SOI insights from the alcohol and other c-store categories in the June issue of NACS Magazine.
Alcoholic seltzers enjoyed more than $4.5 billion in sales during the 52-week period ended May 22, according to NielsenIQ data. Sales are up 80% over the same period in the previous year, which was itself a major increase from an industry that did only about $39 million in sales in 2017. Year-to-date sales are already at $3 billion, doubling over 2019, according to NielsenIQ data.
The growing popularity of seltzers has helped make ready-to-drink cocktails a major category of its own, though canned cocktails still make up just 3% of alcohol sales. The category did more than $434 million in sales for the fiscal year ended May 22, a jump of more than 160% over the previous year, reports NielsenIQ.
The same trends that first made hard seltzers popular continue to drive their growth. First, hard seltzer consumers typically want "an experience through flavor or trying something new," said Danelle Kosmal, NielsenIQ analyst.
Plus, convenience is a key factor, and the tall, slim cans have become synonymous with portability. Finally, health and wellness trends make customers more likely to select seltzers over other alcoholic beverages. Some successful brands have communicated nutritional information like carbs and calories to consumers, which makes the drinks seem like less of an indulgence than other options, Kosmal told BusinessInsider.com.
The typical hard seltzer drinker is between the ages of 21 and 43 and lives in the suburbs or small urban areas, reports Instacart. They're also what Kosmal calls "promiscuous drinkers," meaning they drink across different alcohol categories. Hard seltzer drinkers are 214% more likely to purchase a ready-to-drink cocktail, which helps drive the growth of that new category, according to Kosmal.
Seltzers exploded during COVID-19 as people were stuck at home and unable to visit bars and restaurants.