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Analysis

Why the hard seltzers market has started to sparkle

Hard seltzers have become hugely popular in the US, and now the UK and Europe seem to be acquiring a taste for these low-calorie alcoholic sparkling waters.

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Hard seltzers such as White Claw have taken the US by storm, and all the signs are that the UK and Europe will follow suit. (Photo by Timothy A Clary/AFP via Getty Images)

“In the next ten years, hard seltzer will become a recurrent item on people’s shopping lists,” says Paolo Bruni, head of sales and marketing for London-based Two Brooks hard seltzer.

Essentially alcoholic sparkling waters with fruit flavours, hard seltzers provide a solution to a growing number of people who want to make healthier choices about their diets. Increasingly popular in the US, the drinks are now becoming staples in the UK and Europe.

London-based hard seltzer brand Drty has released the Drty Hard Seltzer Handbook, an in-depth look into the market of this new range of drinks, showing how the hard seltzers market is growing. The likes of White Claw lead the market, although established brands such as Brewdog and Heineken have launched their own hard seltzers, along with independent brands such as London-based Two Brooks and Served.

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Dean Ginsberg, co-founder and joint CEO of Served Drinks, explains that the company was founded through a realisation that the alcohol industry had been slow to react to the needs of the modern health-conscious consumer.

“We realised that we are living in an age where people really care about the food they put in their bodies – for both themselves and the planet,” he says. “With this in mind, we couldn’t get our heads around why companies creating alcoholic drinks all seemed to be packing them with sugar and cheap artificial ingredients and offering little to no ingredient or nutritional transparency.”

Hard seltzers are fizzing in the UK

These healthier – and sometimes more eco-friendly – qualities are what makes hard seltzers appealing to some, with the Drty report, based on CGA data, revealing that hard seltzer consumers are “also more likely to be drinkers of fruit ciders, spirits and cocktails, while less likely to be drinkers of beer and apple cider”.

We couldn’t get our heads around why companies creating alcoholic drinks all seemed to be packing them with sugar and cheap artificial ingredients and offering little to no ingredient or nutritional transparency. Dean Ginsberg, Served Drinks

However, creating awareness of hard seltzers in Europe has been challenging, and launching a business during a pandemic can be frightening, explains Bruni, but things are starting to change.

“As the months went by, the number of hard seltzer producers multiplied, and has been legitimised by the entry of the ‘big players’ each launching their own hard seltzer,” he says. Bruni adds that he initially experienced resistance from potential trade partners and a reluctance in some areas to even have a conversation about hard seltzers, even though their popularity was skyrocketing in the US.

With national lockdowns in place for much of the time since March 2020 in the UK, accessing the on-trade market has been particularly challenging, explains Ginsberg, but things are now starting to come back to life, he adds. Because of the pandemic, direct-to-consumer revenue has seen a huge growth for Served.

“We have seen revenues surge by more than 1,120% in the past three months through our website, as many consumers have shifted to purchasing online,” says Ginsberg.

Serving the UK, Europe and beyond

As hard seltzers grow in popularity in the UK, Ginsberg says that Served is looking further afield. “As we embark on our next phase of growth, we look forward to introducing Served to more people up and down the country and across Europe this summer,” he adds.

Two Brooks’s Bruni is also excited about his company’s international expansion plans, with negotiations in place to start building a presence in Europe over the summer. “The hard seltzer craze has officially made its way all over Europe and beyond as we prepare to start exporting abroad,” he says.

Recently, the company also struck a deal to start selling in Bahrain. “Two Brooks has struck a deal with the biggest distributors in Bahrain [BMMI] and will start selling across liquor stores and bars, restaurants and hotels early this summer,” says Bruni.

The sweet taste of success

These expansions into international markets, along with big beverage companies launching their own hard seltzers, paints a highly promising picture for the alcoholic sparkling waters market.

According to Ginsberg, the hard seltzer category is one of the fastest-growing drink categories in the UK and is expected to reach £600m in sales by 2025. “We expect significant growth over the next two years, with a flurry of new brands, big and small, entering the market to capitalise on the trend,” he adds.

However, Ginsberg also expects the hard seltzers market to “stabilise after this initial peak, with a number of brands falling away. The brands that will succeed longer-term will be those that have been able to build a genuine connection with their customers.”

With summer around the corner and al fresco dining and socialising likely to remain the norm as people continue to be cautious over social distancing, the sun seems to be shining on the hard seltzers market. Consumers can be notoriously fickle when it comes to trends in alcoholic beverages, but the healthy image that hard seltzers have cultivated makes their long-term prospects seem positive.

Marina Leiva

Marina Leiva

Senior reporter

Marina Leiva is a senior reporter at Investment Monitor, where she specialises in the agribusiness sector.