Convenience store operators who earn a large part of their living by knowing what consumers want today are asking the question: Are hard seltzer sales fizzling?
The answer is not quite as simple as they might like. The segment is maturing in the wake of the boom it experienced during the height of the COVID-19 pandemic, but it remains a popular and strong-selling category. So no, sales are not “fizzling.”
First, a definition: seltzer is the American name for carbonated water, while “hard” refers to the fact that it contains alcohol (which is why drinks without alcohol are called “soft”). They are alternately referred to as “spiked” seltzer, typically contain about 5% alcohol by volume, and are lower in calories than most comparable alcoholic drinks. Hard seltzers are also gluten free and low in sugar — facts that attract health-conscious consumers.
The fact that the category is growing is not in doubt. U.S. revenue in the hard seltzer category for 2023 will reach $17.24 billion, a number that is expected to grow annually by 8.51% (a compound annual growth rate from 2023 to 2027), with the U.S., leading all other nations, according to Hamburg, Germany-based Statista Market Insights. The market is expected to show a volume growth of 5.5% in 2024.
Major players, according to Statista, include White Claw, with 18% of the market; Michelob at 7%; Smirnoff with 7%; TRULY at 7%; Twisted Tea with 5%; Bud Light at 5%; and Lemon Life with 2%. Interestingly, consumers appear to be enamored with smaller brands, which maintain a collective market share of 49%.
On the other hand, Statista projected that by 2027, 45% of spending and 23% of volume consumption in the U.S. hard seltzer market will be attributable to out-of-home consumption, meaning bars and restaurants.
What’s more, hard seltzers find themselves in an increasingly crowded marketplace. Retailers are seeing growth in the so-called “beyond beer” category, which encompasses seltzers, ciders, ready-to-drinks, flavored malt beverages and cheladas. Beyond beer sales currently account for 54% of the growth in beer sales, according to Westwood, Mass.-based marketing research and strategy agency Ignite Research LLC.
