Hard seltzer sales ‘impressive collapse’ causes effervescent category to deflate

Wander the shelves of any LCBO, beer shop, or bottle shop these days, and you’re sure to see dozens of hard seltzers, in a seemingly endless variety of flavors.

But falling sales and projections at two of North America’s biggest producers have some observers wondering if the fizz has gotten out of the world’s biggest liquor craze of the last decade.

Boston Beer Co., makers of Truly seltzers, recently announced that it was withdrawing its financial forecasts for the rest of the year because the US market was likely to sell 100 million fewer cases of hard seltzers than had been forecast in May. Sales data from market research firm Nielsen IQ recently showed that even market leader White Claw had seen double-digit year-over-year declines in recent months.

For a category that had doubled and tripled in size in recent years, it’s a surprising and rapid slowdown, said beer and spirits author and consultant Stephen Beaumont.

“That’s only from the May forecast. That’s an impressive collapse, ”Beaumont said.

“We believe there will be continued uncertainty about carbonated water demand trends through the remainder of 2021. As a result of this uncertainty and its impact on our volume trends, the Company is withdrawing its financial guidance for 2021,” announced Boston Beer September 8. a day when the company’s shares plummeted nearly 10 percent. In late July, the company saw its shares fall 26 percent in a single day after lower-than-expected quarterly earnings it attributed to falling mineral water sales.

The market in the US and Canada has been dominated by larger brands such as White Claw (produced by the Mark Anthony Group, which also makes Mike’s Hard Lemonade) and Boston Beer Co.’s Truly. Other large beer and consumer products companies, including Molson-Coors and Coca-Cola, have made significant investments in the seltzer market.

For major brewers that have seen sales of their flagship beer brands plummet for most of the past two decades, the seltzer craze had been a welcome change of pace, Beaumont said.

“The major brewers have been doing it because they couldn’t afford to be left behind. Their top brands have been falling for years, ”said Beaumont.

Adam Collins, director of communications and corporate affairs at Molson-Coors, acknowledges that rapid growth in the seltzer category is slowing, but insists the company is still happy with the sales of its Vizzy seltzers, as well as the line by Topo Chico. hard seltzers that it produces for Coca-Cola.

There’s still a lot of life in the seltzers, Collins said, this isn’t a modern-day Zima.

“It has had triple-digit percentage growth in recent years. We never expected that kind of growth to continue forever, ”Collins said. “At the end of the day, the seltzers are here to stay.”

According to a recent report by Morgan Stanley analyst Filippo Falorni, sales of Molson-Coors seltzers in the United States increased 89 percent year-on-year in the four weeks ending Aug. 28. In the same period, Mark Anthony posted a 16 percent increase. While Constellation Brands, which makes Corona Hard Seltzer, plunged 39 percent. AB-Inbev, which makes Bud Light Hard Seltzer, grew just two percent.

According to an LCBO spokesperson, mineral water sales are still increasing at the provincial alcohol retailer. Still, falling sales in the United States have caught the attention of Canadian growers.

“I don’t think anyone is really surprised that there has been a slowdown. But the fact that this happened soon caught a lot of people off guard, including us, ”said Todd Lewin, president of Muskoka Brewery, which produces several varieties of mineral water under the name Hard Sparkling Water.

Lewin said individual can sales have been well below forecasts this year, although cases of 12 and 24 have remained.

Surprising sales growth south of the border over the past few years has drawn many craft breweries, both in Canada and the US, into the world of hard seltzers. Some of them probably shouldn’t have jumped with both feet, Lewin said.

“I think people saw some of the numbers coming from the United States, where it was going up 250 percent a year, and they looked at it with pink glasses. They thought it was an easy category to enter, ”Lewin said. “I think some producers, especially small ones, didn’t realize how much work it took to build a brand.”

Still, hard seltzers are unlikely to go away completely, at least not for a while, Beaumont said.

“Are the tough seltzers here to stay? For the immediate future, yes. Would you be sure to say that they will be available in 10 years? Not necessarily.”


Leave a Comment