Drinking hard or hardly drinking?
In part two of our look at the incoming trend of hard seltzers, Anthony Gladman asks how much of a threat they pose to UK craft brewers, and how those brewers are responding
Wednesday 20 January 2021
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Hard seltzer tastes like something a scientist might hand you in a clinical trial. It’s fizzy water dosed with alcohol, and a minimal concession to flavour because – ugh – the pesky humans who will drink this stuff have an irrational attachment to samples tasting ‘nice’.
But I’m not the target audience for this new kind of hooch. Clearly, there are plenty of drinkers who love it. Younger ones, mostly, who haven’t developed the same love of bitterness and booze that I’ve been cultivating for decades.
A big splash
The way hard seltzer has fizzed up in the USA you’d think someone had been shaking the can. In 2018 there were 10 brands. In 2019 that grew to 26. By 2020 there were 65, racking up sales between them worth almost three billion dollars.
Multinational companies have leaped into this so-far-so-bottomless money pit with gusto. AB InBev, Constellation Brands, and Molson Coors have bought up smaller brands as well as releasing their own. Even Coca Cola is getting in on the act with its new brand Topo Chico. It seems the American thirst for fizzy water that gets you drunk is far from being slaked.
Industry analysts predict hard seltzer will rise like a cork popped from its bottle for the next five years at least. In its wake it will drag drinkers away from vodka, wine and beer (it already outsells pale ales in the US on-trade.) Hard seltzer slingers are making bank on a par with Scrooge McDuck, last seen skiing down his pile of gold.
The 90s were a hard-drinking decade. Top hits from the time include Underworld singing ‘lager lager lager’; Oasis’s “Cigarettes and Alcohol”; Chumbawumba’s “Tubthumping”. All revel in booze. For those who lived through this freewheeling hedonistic age, the fuss about hard seltzer will have a familiar tinge, like tasting last night’s WKD Blue on your hangover burps. We’ve been here before, right? Isn’t this just alcopops by another name?
There are some similarities, for sure. The categories both appeared from overseas as if out of nowhere, fully formed and ready to wreak havoc on stale old grandpa drinks. Both were met with initial sneering mockery, followed by a realisation that people are actually going to drink that shit. And both saw rapid growth bringing with it media attention. But there are also many ways in which the two drinks are not alike at all.
If you don’t remember alcopops, here’s a brief primer. Think hurt-your-teeth sweet (Bacardi Breezer). Think lurid concoctions that looked more like screen wash for your car (Aftershock; WKD; MD 20/20, street name Mad Dog). Think trashy, brash, lads-on-the-lash (any and all of them). Mindful drinking these were not.
Both hard seltzer and alcopops skew young in their audience, but back in the 90s this tipped over into encouraging under-age drinking. Or so the tabloids told us at the time. In a culture awash with alcohol, trying your luck buying booze was almost a duty for self-respecting under-age adolescents. It was our way of getting one past The Man (Alcopops came of age well before the Challenge 21 and 25 schemes were introduced). They were never cool, per se, but they were fun, and efficient at getting you pissed.
The predictable tabloid furore led the Portman Group to adopt its first code of practice, and chancellor Ken Clarke to increase tax on alcopops by 40%. It was a national shame-hangover that never quite left us, even to this day.
Hard Seltzer has a very different image (White Claw memes aside). Its cans are sleeker and its designs more sophisticated. Instead of ‘gets you pissed quick’, it plays on lightness, refreshment, wellness, and natural flavours. They are low in calories and many brands are also quick to point that they are vegan and gluten-free. The majority are totally clear and colourless, finish clean and dry on the palate, and... don’t taste of much, to be honest.
Hard seltzer makers have taken aim at a somewhat older drinker – ages 25 and up – who is more concerned with things like calories and bloating. Someone who still wants to be social and get a buzz on with their mates, but who is much less likely to wake up in a skip and brag about it afterwards.
George Blurton, co-founder of hard seltzer brand Long Shot, says hard seltzers are looking for a “slightly more discerning drinker”. Someone whose tastes already lie beyond the mainstream, who enjoys craft beer and small batch gin, but wants to socialise without undoing all the work they put into their diet. “People who want to have a drink but feel less of the guilt,” he says.
A crowded market
Unlike the USA, where White Claw and Truly dominate, the UK hard seltzer market has yet to find its overall leader. Instead, a slew of new brands are jostling for position. Most of them, like Long Shot, are small. “One thing we didn’t cater for at the beginning was how many other competitors would be popping up this year,” George says. “When we launched in May, you’d go to the shops and there would be no hard seltzer on the shelves. And now it’s getting bigger and bigger each time. I think that’s good news. The more that shelf grows the more the awareness of the market will be.”
Larger companies such as BrewDog and Coca Cola are starting to make waves, but so far neither one has muscled its way to the top. George says he welcomes their entry into the fray. “It’s a good time for us to ride that wave they’ll be building for us,” he says. “We don’t want to be fighting it out with the big guys – your White Claw, your BrewDog, your Molson Coors. They can do their thing. We want to focus on being small batch, high quality. That’s where we want to be.”
In late 2020 Long Shot was selling all its seltzer in cans. Customers ordered online, either through the Long Shot website, or through third party retailers including Amazon. This wasn’t quite the original plan. George says he had hoped to sell to craft beer bars and bottle shops, but Covid meant that had to be put on hold. “We’re starting to make tracks in the craft beer bottle shop model,” he says. “When everything is back to normal that’s where we want to be. We want to be the craft option in this world of big names.”
Nobody knows for sure where hard seltzer will find its natural home. For producers this means there is an opportunity to define it for themselves, before somebody else foists one upon them. Some brands are aiming upmarket – notably Bodega Bay, which says it is not targeting the craft beer fans but rather drinkers who want to manage what goes into their body. In late 2019 the brand launched straight into Harrods and Harvey Nicholls. Still, the real sales potential for most hard seltzer probably lies in the supermarkets, in multipacks of four or six. Convenience and travel could also be lucrative areas.
Potential for growth
There’s little doubt that hard seltzer has the potential to do well here in the UK. Already it is attracting younger millennial drinkers, and Gen Z as they come of age. It appeals equally to men and women (it hasn’t been around long enough to be seen as a drink for middle-aged white dudes) and thanks to its low calorie count generally plays well with the health-conscious nature of these age groups.
“I do see a big future,” says George. “I think what we’ll end up with is a stronger consumer base that really knows what the product is about and gets excited about the flavours. We’re not going to suddenly see hard seltzers in your traditional pubs. We might start to see them in craft beer bars. That’s where I see the next step for us.”
Nick Graham, co-founder of hard seltzer maker Berczy adds: “The US has shown the hard seltzer demographic can become exceptionally wide. In this vein, we think there’s a bit of a journey to go on with hard seltzer in the UK; the discerning craft beer drinkers may take more time to come around to the idea of the category, but as ingredient provenance and exciting flavour combinations become more prevalent, the market will expand and there will be a level of crossover between the hard seltzer and craft beer markets.”
Like many hard seltzer makers, Kath Stratford, Senior Brewer at London Fields Brewery, was ready for the category to make its mark in 2020, but instead saw that growth pushed into 2021 by Covid.
She says it will do well because people are more open now to exploring new drinks. “It’s very good for people who don’t really like wine or spirits and want to try something else – maybe something that isn’t as heavy.”
Kath says she would be surprised if most brewers weren’t already experimenting with hard seltzers behind closed doors. Making hard seltzer isn’t particularly challenging and doesn’t need any special kit. You can make a batch in about two weeks – half the time many craft brewers will spend producing a pale ale or IPA. And the process itself is one that appeals to lots of brewers. “Most of us are pretty nerdy about all sorts of fermentation,” Kath says.
Since launching the London Fields grape and guava hard seltzer at the Brew London festival in February 2020, she has been approached by former colleagues and others in the industry for advice. “If there’s a Brew London next year there’ll be a lot more hard seltzers there,” Kath says with confidence.
Sales have done well for Kath’s seltzer despite the disruption of Covid. “We’re lucky in that we’ve been able to capitalise on the takeaway market,” she says. She tells me the brewery has interest at the moment from “some pretty big customers”.
It seems clear that hard seltzer is about to get big over here in the UK. Even so, we are unlikely to see a repeat of its phenomenal growth in the USA. This is partly down to the alcopops hangover, which will put some drinkers off even trying them in the first place. But it is also because of important differences between our two nations.
For all its craft cred, the USA still has a culture – and climate – more aligned to chugging light lagers than exists here in the UK. And it lacks some of the other drinks that are so prevalent here: the flavoured ciders, the ready-mixed canned cocktails. This ready-to-drink sector is hard seltzer’s natural fit for the UK and contains what will most likely be its biggest competitors. Why have an almost-tasteless fizzy water when you can have a nice G&T in a can that’s the same size and the same price?
So what does this mean for craft beer? Hard seltzer has washed up on our shores at a difficult time for brewers, who are facing what could be a perfect storm.
Craft beer sales have been slowing for some time, as big beer companies increase their share of the craft market – particularly in supermarkets.
Brewers face significant uncertainty around tax. The future of the Small Breweries’ Relief, upon which many, if not most, independent breweries relied to establish themselves, hangs in the balance.
The looming impact of Brexit clouds the future even further. Already some brewers have faced difficulties placing orders for cans with European suppliers.
And finally there’s Covid, which sent everyone’s 2020 veering way off course. Britain’s small independent brewers reported losing over 80% of their sales during the first lockdown early in the year. Sales throughout the rest of the year remained well below normal levels. And in November 2020 research by three major beer trade bodies found that 72% of pubs, bars and restaurants were at risk of closing during 2021. Losses on this scale in the on-trade would naturally impact brewers too.
If hard seltzer pulls drinkers away from craft beer, that could be the final nail in the coffin for some breweries, particularly smaller ones with no canning facilities of their own. But it could also throw a lifeline to those who decide to produce their own hard seltzer and potentially tap into a whole new market.
Much depends on where hard seltzer ends up making its sales. If it finds its natural home in supermarkets, competing mostly with big beer multipacks and other RTDS, then perhaps hard seltzer and craft beer will be able to coexist just fine.
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