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How White Claw is leading the hard seltzer charge

Davin Nugent, the head of Mark Anthony's international business, explains how its White Claw brand has become a success story in North America, and predicts a bright future for hard seltzers.

white-claw-seltzer
White Claw’s strong social media presence is helping it to dominate the hard seltzer market in the US. (Photo by Christopher Lane/Getty Images for White Claw)

What is the ownership structure of Mark Anthony brands?

Mark Anthony Brands International is the innovation and brand development and international distribution company within Mark Anthony Group. We look after brand creation, brand development, marketing strategy and international distribution for all of our brands.

All of the brands that we develop are available in the US through Mark Anthony Brands Inc, more commonly known as the Mike’s Co.

The brand marketing strategy and the oversight for all of our brands, including in the US, is run out of Dublin. Our US business handles distribution, sales and marketing activation.

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How has White Claw come to be the largest hard seltzer brand in the US without spending big on marketing?

We are in a very fortunate position from that perspective. We saw the opportunity to innovate within a category that lacked both major innovation and a better-for-you option within alcohol. In the US, there has been a large growth trend for seltzer – or flavoured sparkling water – brands, which were having a major impact on traditional carbonated soft drinks. We looked at what the drivers were. People were looking for a lighter taste, better-for-you ingredients and something that more reflected their lifestyles.

White Claw has a unique personality. It is not a brand that is an adjunct to an existing product – there is no White Claw beer or cider or spirit. Davin Nugent, Mark Anthony

White Claw has a unique personality. It is not a brand that is an adjunct to an existing product – there is no White Claw beer or cider or spirit. It was created specifically to meet this need. That is where the brand has connected with consumers – it has been positioned as both premium and very much gender-neutral.

The consumer has tapped into this. The brand enjoys enormous popularity among the target consumer, be they male or female. That has been a major benefit for White Claw.

What has become the major win for us in the US and, indeed, in other markets as we have moved into them, has been that the consumer has taken it on and championed it. They are drinking less and better, so they are looking for brands that are more reflective of that.

To put this into perspective, in the US alone in 2020 there were more than 4.5 billion impressions on social media containing White Claw. That shows the huge support the brand enjoys with its consumer base in the US. We have seen this being replicated in other markets as we have entered them over the past 12 months.

What has been the marketing strategy on social media that has proved so successful for White Claw?

We have been conscious not to tell the consumer how to consume the brand or what the brand represents. A lot of brands fall into the trap of needing to show consumers what to do with it. We have been very much about introducing White Claw and then leaving it to the consumer to enjoy. It is those consumption moments of pure, uncomplicated fun that they are utilising and presenting on social media.

We have set a premium position for the brand in our marketing, but we haven’t tried to hold a mirror up to the consumer. Davin Nugent

We have set a premium position for the brand in our marketing, but we haven’t tried to hold a mirror up to the consumer – no one is going to do it better than the consumer. So, we are learning about how they are using the brand and that is informing what we do with our communications in every market that we enter.

The alcohol industry hasn’t got a particularly good track record of taking the approach of hearing the consumer tell them what they want and then acting on it.

We are conscious of listening to the consumer to hear what is missing in their repertoire of beverages. We are attentive to what those needs are and that is what drives our innovation process.

In our marketing, we set the tone for what the brand is about, but then we listen to what the consumer is saying to understand how to develop. You can’t just presume that because the brand is successful, you just go down a track that isn’t being informed by what the consumer is saying to you.

Where is White Claw in the US today, in terms of market share?

The hard seltzer category, which only really came about in 2016, is now worth $4.7bn in the US – roughly a ten-share of the US beer category. We have a value of about 48% of that category. We are by far the largest brand within it. It has clearly broadened over the last number of years and months, in particular where a group of brands have come in. There is about 260 now competing for share, but we are in a very strong position and continue to grow strongly in the US and now internationally.

Of those more recent entrants, we are seeing more established beer brands add a hard seltzer extension. What risk does that pose to White Claw?

Having a competitive category is good – it ensures that everybody is on their toes. It is also good for the consumer as it indicates a category that is making noise.

What sets White Claw apart is our focus on liquid quality. We remain a David versus the Goliaths in the industry. If it is a straight shoot-out from an advertising perspective, that is not something we believe is going to win the day in the end. The consumer is going to pick the product that is most attractive to them, and ultimately, tastes the best.

What gives White Claw the right to claim ‘David’ status when it has got almost 50% market share?

If you compare us to a lot of the majors, we are small by comparison. Yes, we have done incredibly well within the hard seltzer category, but it is still small by comparison to beer or spirits or wine. It is a much bigger universe out there, right?

We are still David versus those Goliaths, we are still at a very early stage in our global development. Even with our success in the hard seltzer category, that mentality still goes through the business today. We are very entrepreneurial, and that is a major differential versus the large majors who are moving into the category as well.

To what extent has the US success given White Claw an instruction manual for markets elsewhere?

As we move into international markets, there is a confidence that hard seltzer has real potential. However, the US performance doesn’t give us the right to think we have the right to be successful in every market we enter. There is a large body of work that needs to be done in every market. We have to do a huge job on education, for consumers to understand what the category is about. Then, we have to build the brand.

We are still David versus those Goliaths, we are still at a very early stage in our global development. Davin Nugent

We have to start at the ground floor in every market and build it up. We know what the plus points are from the US and we can take a huge amount of insight from that. But every market is different. If they weren’t, then the number one beer in the US would be the number one beer in every other market. It doesn’t follow that because you have success in one major market that it will follow everywhere else. It is about building small fires in each market to allow the consumer to discover White Claw, and then for the brand to grow organically.

If we force this, it will go down the traditional beer marketing route. For hard seltzer, that has been proven not to work. This is an entirely new category that is appealing to a new consumer.

The jury has been out on the prospects for hard seltzer outside of the US. What is your take on the international potential for both the category and your brand?

Bringing hard seltzer into new markets and establishing the category is half the fun. I love a healthy degree of scepticism, which buoys you up and [you then] want to prove it even more.

In Canada, where we only launched in February 2020, we are already the number one player – and hard seltzer in Canada is already worth close to $800m. In Australia, it has got off to a really strong start – we sold one million cans in our first week there last year. We are already up and running in a meaningful way in 12 markets internationally.

I know we think of White Claw and hard seltzer as an overnight success, but we have been at this for five or six years. The step change that came in 2018 and 2019 was after three or four years of putting in the foundations to build the category and build the brand.

It will take time – some markets will be faster than others – but we are confident that hard seltzer has global potential, not just US potential.

What is hard seltzer taking shelf space and consumption occasions from?

This differs by market. In the US, it is taking significant share from beer but also from spirits and wine. In the UK, it is attracting premium lager and cider consumers as well as spirits, while we are seeing a big draw from white spirits as well as ready-to-drink beverages in Australia.

This is what is really positive about hard seltzer – it has the potential to attract consumers from a very broad base.

You have recently launched a higher-ABV extension of White Claw, White Claw Surge. Doesn’t that defeat the object of hard seltzer?

It is about the consumer need. In the US, there is a strong market within the convenience channel for an 8% ABV single-serve product. We believe this will attract a consumer who is looking for a one-serve spirit-mix and it is a great opportunity to expand the occasions for White Claw. I don’t think it defeats the purpose, I think it very much meets the purpose.

When do you believe was White Claw’s tipping point?

The earliest that I thought there was huge potential was when we were researching the concept with focus groups in Boston. The excitement among the target consumer was so great – if the packaging was right, and if the liquid could meet the consumer expectation, then this was a real opportunity.

This is what is really positive about hard seltzer – it has the potential to attract consumers from a very broad base. Davin Nugent

For me, it has not been the entry of the big beer or spirits brands into hard seltzer, it has been the consumers’ endorsement of White Claw that came in 2018 and 2019. Social media really got behind the brand. There was this incredible meme culture and a swathe of support on Instagram that the brand was enjoying. That was the tipping point.

There was a lot of scepticism as to whether this was a fad, but there was this huge connection between the brand and its fan base. That other brands are coming in is great, but that is not the success factor for us.

How long do you give hard seltzer?

That is like saying how long do you give beer! Hard seltzer is only just starting.

This article originally appeared in Just Drinks.

Olly Wehring is the managing editor at just-drinks.