AB InBev launches cocktail-inspired hard seltzers

Dive Brief:

  • Anheuser-Busch introduced Social Club Seltzer, its new hard seltzer brand in three flavors: Old Fashioned with notes of blood orange, warm spices and smoky oak; Sidecar with a blend of stone fruit flavors and fresh lemon; and Citrus Gimlet which combines citrus and juniper.
  • Each can is 12 ounces with 150 calories and 7% alcohol by volume. The seltzer will be sold at retailers in 6-packs of individual flavors and 12-packs with a variety of flavors.
  • Anheuser-Busch said it identified a gap in the seltzer market for cocktail lovers that this new beverage aims to fill. “Inspired by the flavors of classic cocktails and combined with the refreshment of a seltzer, Social Club appeals to cocktail lovers who are looking for the flavors they love but in a more sessionable format,” Lana Kouznetsov, vice president of Beyond Beer with Anheuser-Busch, said in a statement.

Dive Insight:

Innovation is a top priority for Anheuser-Busch and seltzer appears to be a category in which the company is investing its time and money. Last year, Anheuser-Busch said it was planning to invest an additional $100 million into the hard seltzer category, according to CNBC. Only months later, Social Club Seltzer became the brand’s latest hard seltzer offering.

Anheuser-Busch also has Bud Light Seltzer, Natural Light Seltzer and Bon & Viv, all of which are aimed at different segments of the alcohol market. Bon & Viv is tailored to millennial women as a healthier offering with no sugar and fewer calories, while Natural Light hard seltzer is marketed to bargain-seeking college students with larger packages, a higher alcohol level and a lower price point. Bud Light Seltzer will likely be positioned to attract the average backyard beer drinker looking for a light, crisp option from a familiar brand. Now, the company is introducing a product aimed at consumers looking for a “complex and sophisticated” beverage with the lightness of seltzer. 

AB InBev has struggled in its previous venture into hard seltzer after it acquired Spiked Seltzer in 2016, which has since been rebranded to Bon & Viv.​

In addition to Anheuser-Busch, other alcohol makers such as Molson Coors and Constellation Brands are scrambling to get a foothold in the seltzer space. Up until now, the market has been dominated by White Claw, which is the category leader with a 59% dollar market share, according to IRI data ending in September, followed by Truly, owned by the Boston Beer Company. Both are innovating in a bid to grow and retain their market dominance as the bigger players enter the space.​

Retail sales of the product soared 208% to $1.4 billion for the year ending Nov. 30, 2019, according to data provided to Food Dive by Nielsen. This followed increases of 169% and 358% in the previous two years. UBS expects the hard seltzer category to increase to $2.5 billion by 2021. 

At the same time, ready-to-drink beverages are seeing similar growth with malt-based cocktail sales soaring. Anheuser-Busch is marrying the seltzer and ready-to-drink cocktail trends and taking a bet that the mix will address several segments important to consumers simultaneously.

Social Club Seltzer has the ability to cater to cocktail lovers that are looking to introduce some easy-going convenience into their bar program. A Nielsen study revealed convenience is a major driver behind ready-to-drink cocktail sales with 55% of consumers stating it was an easy way to enjoy a cocktail without needing a mixologist. The cocktail seltzer also appeals to seltzer lovers looking to premiumize their canned libations while still enjoying an approachable beverage.

As the dominance of legacy alcohol and beer brands is being threatened, creating approachable cocktails has become somewhat of a mission for companies in recent years. Molson Coors has turned to mixes with functional ingredients in the form of antioxidants while its Jacob Leinenkugel brand has created a beer with a splash of seltzer

AB InBev — the parent of Anheuser-Busch —​ seems to have leaned into the convenience factor and introduced cocktails in a pod in the hopes of bringing spirits into the home much the same way the K-Cup brought single-serve coffee to the masses. 

So far, these efforts have not yet hit the sweet spot with customers. AB InBev posted in February a lower quarterly profit, blaming higher costs and lost market share in the U.S. to hard seltzer makers, The Wall Street Journal reported. The debut of hard seltzer roll outs in quick succession shows AB InBev is trying to not only capture some of this growth but prevent its competitors from further eroding its sales.

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