If you ask anyone in the industry about what category they’re watching right now, odds are hard seltzer will be near the top of their list, and the September issue of National Liquor News featured this exciting category.
In the space of less than two years, the category has exploded into the Australian retail landscape, drawing product ranges from big and small names in the local industry, as well as attracting internationally powerful brands too.
Despite just slowly surfacing in late 2019, by summer 2020 consumers had developed a taste for hard seltzer in the season many dubbed as Australia’s ‘summer of seltzer.’
From this point on, people were no longer asking ‘what is hard seltzer?’ and instead were asking ‘where do I get it?’ Thus, a huge ongoing opportunity for liquor retailers was cemented. But with such opportunity, retailers are left with questions of their own, often surrounding the longevity of the category and reacting to it accordingly. While hard seltzer continues to develop in Australia, there are several angles the off-premise industry should look at while finding these answers.
Reflecting on results
Brands that have ventured into the hard seltzer category and contributed to its expansion of value and volume have reported strong results in the past year. One such producer is Australian brewer Moon Dog, which was one of the first local brands to enter the seltzer category in 2020 with Moon Dog Fizzer.
Co-founder, Josh Uljans, said: “For an emerging product that last year didn’t have its own category, alcoholic seltzer has really taken off within the Australian market. Despite only launching Moon Dog Fizzer in October last year, we’ve seen some incredible results that tell us seltzer is here to stay.
“As an independently owned Aussie business, we’re stoked to be holding our own against the bigger international players in the market… the brand has exceeded our three year sales targets in under 12 months, and we’ve been blown away with the positive feedback we’ve had from everyone.”
The founders of independent seltzer producer Fellr have described similar success, after selling 200,000 litres of hard seltzer in their first year. This year the brand is on track to sell over one million litres, and expects 500 per cent growth in the 2022 financial year.
“Pretty much since its commencement, hard seltzer has just been flying. I think it’s really outperformed a lot of supplier and retailer expectations and forecasts in the last 12 months,” said Andy Skora, Fellr Co-founder.
“It’s crazy to see the emergence of this category in terms of growth in retail stores. I don’t think I’ve ever seen a category grow as fast as it has and take share off other categories. Walking into liquor stores and seeing one or two doors dedicated to seltzers already in just 12 months is really crazy.”
Such a growth explosion is nothing new to international category leader White Claw, which has leveraged its iconic status in the US to captivate drinkers in Australia too. Since Lion brought the brand to our shores in 2020, it’s seen massive success with both its original launch SKUs and a new addition earlier this year.
“The seltzer category continues to grow momentum in Australia, as White Claw’s cult status continues flavour to recruit new drinkers. Selling six million cases annually across the globe, White Claw is the number one international hard seltzer brand and has taken market leadership MQT to June 2021 (vol/val) in Australia,” said Anubha Sahasrabuddhe, Consumer and Brand Director at Lion.
“Having sold one million cans at launch week, the limited edition release of US number one flavour Black Cherry became the number one selling SKU when launched at Easter, as Mango continues to be the leading flavour amongst Aussie drinkers.”
What’s next for hard seltzer?
After achieving such stellar growth in such a short amount of time, the future of hard seltzer is something that many are interested in, especially ahead of what is likely another peak season for the category.
One prediction for the future comes from Sahasrabuddhe, who said: “Ahead of other international markets, Australia has an established RTD category, which remains in significant growth driven by consumer consumption habits.
“Hard seltzers resonate with consumers as they better meet their evolving needs, offering a modern and ‘better for you’ alternative to traditional alcopops which are laden with sugar and calories. With health and wellbeing macro trends continuing to gain momentum here in Australia, we expect hard seltzers to explode this summer, with White Claw really leading that growth.”
Another ‘summer of seltzer’ has been tipped by several other producers too, including Saintly, where Barton said sales have already begun to pick up pace.
“Last summer many consumers tasted hard seltzers for the first time and it was about discovery and trial of all of the new brands and flavours available,” he said.
“With much of the east coast locked down for winter and states due to open up just in time for summer, we anticipate as much as 150 per cent YOY growth for the summer period across the seltzer category.”
Alvarez said there will likely be big things to come from the category, especially as new and existing brands look to differentiate themselves in the market.
“Considering their impressive growth in Australia to date and their track record in the USA, IRI is predicting that the seltzer category in Australia will be worth $300 million by the end of 2025, which represents a sizable opportunity for Jack Daniel’s,” she said.
“We are excited to see how the category evolves in the coming months, no doubt there will be a wave of new and established brands entering the segment this summer.”
Although the founders of Fellr agree that this summer will be another big one for seltzer, they also said it will start to help consumers understand what they really like about the category, which will influence what the market looks like in the medium to long term.
“It’s definitely just the tip of the iceberg for the seltzer category,” Morgan said. “Last summer was kind of everyone’s first attempt at it, and there was a lot of throwing stuff at the wall and seeing what stuck, what flavours were popular and what brands were resonating. I think this year is going to be the big summer for seltzer to kick off and solidify itself in popular culture as an exciting space to be in.”
Skora added: “We’ve seen an explosion of brands enter the market… I think soon we might be seeing the cream rise to the top with the top brands, and a shrinking of other brands.”