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Long read: Are hard seltzers over before they really began?

Published:  02 September, 2021

Richard Horwell, owner of specialist food and drink marketing and branding company Brand Relations, anticipates a hard year ahead for a fledgling drinks trend.

There was massive excitement over hard seltzers (also called spiked seltzer, alcoholic seltzer, or hard sparkling water) over the past two years in the UK.

The flavour profile of hard seltzers, which are largely fruity, suited the palates of those who may not be great fans of wine and beer. With a relatively low abv and calorie content, they were initially marketed as – and believed to be – a healthier choice of alcoholic drink.

Indeed, market forecasts predicted massive growth in the sector saying, for example, that the UK hard seltzer market was expected to reach a value of £75m by 2023 (according to a report commissioned by brand owner, DRTY in February 2021).

While I read all the projections and saw that hard seltzers would do very well in the short term, it was also clear that the bubble would quickly burst, particularly for smaller brands and entrepreneurs. As anticipated, despite continued enthusiasm, we are now starting to see the market drop. For example, Boston Beer Company stock has dropped more than 12% in just the last month.

So why are hard seltzers over before they really began?

Health claims

One of the obvious advantages to the consumer of drinking hard seltzers is that they contain fewer calories than other alcoholic beverages.

The majority of hard seltzers come in a 12oz can and contain around 100 calories (a 12oz serving of craft beer can contain as much as 350 calories). Although the amount of sugar varies between brands, it tends to be less than 3g of sugar per serving. So, a hard seltzer could be considered a healthy option, if compared to beer, wine or fruity cocktails.

For the growing number of health-conscious consumers, hard seltzers also tick a lot of boxes, being generally gluten-free, low-carb and lower alcohol.

But – and this is a big but – UK brands selling hard seltzers are not allowed to make any health claims about their drinks, by the simple fact that they contain alcohol. Indeed, there have been several complaints against hard seltzer brands upheld by the ASA (Advertising Standards Authority) for making stated or implied health claims, including Brewdog, High-Water, DRTY and Whisp.

And, if the big boys can’t get away with it, how are smaller brands supposed to communicate the health ‘benefits’ as a reason for buying their hard seltzer? To stand out requires spending a lot of money, the kind that small start-ups don’t have, but the already established brands do. This leaves smaller brands drowning under the bigger brands’ marketing noise.

The UK doesn’t always follow the US

A lot of the projected success of the hard seltzer market in the UK has been based on the ongoing growth of the sector in the US.

Here comes another 'but': often categories that boom in America flop here, for example Energy Shots. This is partly explained by the fact that in the UK we are far more limited as to what we can say about products. The UK population is also far less familiar with what hard seltzers actually are, leading to serious problems getting the message across to the consumer.

Smirnoff, Kopparberg and Coors have now all released their version of hard seltzers. The big, well-known brands are dominating the market and pushing their lesser-known rivals out.

Small brands are looking at big bucks competition. This means if they want to stand out they will need to spend something in the region of £100,000 just for marketing, yet they will still be limited in what they can actually say. This is an enormous amount of money to spend and potentially lose if you’re a start-up, but a drop in the ocean for established, recognised brands to invest to ensure they don’t lose market share. It is so common for little brands to fail after spending all the money they have, leaving the market to the big brands such as White Claw.

It’s not that hard seltzers will completely disappear, rather it will be the small players who will suffer and ultimately wither, while the big boys take over and thrive. It is simply not worth it for small brands. They just cannot compete.

Drink at home is very different to drinking out

For brands large and small alike, the RTD alcoholic drinks trend is going to change considerably now that bars, pubs, and clubs are reopening.

As life returns to normal, people are returning to their old drinking haunts and looking forward to the ‘experience’ that offers. They will not go to these places for a drink which is essentially ethanol with water and flavour and, even if they did, most bars don’t and won’t sell hard seltzers.

People who enjoy a cocktail, want the experience of the cocktail. They want to order it and see it mixed and poured for them, not simply tipped from a can into a glass!

In my experience, brands too often have to ‘incentivise’ an establishment to sell their product. In one case the owner insisted on receiving two first class tickets to New York, plus a stay in a swanky hotel while there.

Perhaps the big players can afford that, if they considered it worth the investment, but smaller brands certainly couldn’t and, even if they could, would still be unlikely to make profit from the result of that investment.

So, are hard seltzers an exciting development in the drinks market? Do they have a future ahead of them? I think not. Too soon, forecasts are saying that the hard seltzer boom is starting to fade.