The US alcoholic beverage market: In the US, 2022 will be the year of the hard seltzer
In five years, the US hard seltzer market has done what it took craft beer more than 30 years to do
Alcoholic beverage producers in the US have planned the launch of new low-alcohol products for 2022
In recent years, the market for hard seltzer drinks in America (canned blends of carbonated water, fruit flavorings and alcohol) has captured the public's attention because it has taken over 10% of the market share that was formerly held by beer. This commodity sector has now become a major player, growing to generate over 4.1 billion in annual sales.
As a result, a new name for low alcohol sparkling beverages has become popular among the companies in the industry and American consumers. Anheuser Busch coined the term "beyond beer" and now the American market is offering an increasing number of products in this new category of alcoholic beverages. The reason for the enthusiasm of food and beverage brands in the USA is simple: although the growth of hard seltzer has declined since the pandemic, the category is still booming in America. This is not surprising considering that hard seltzers are easy to drink, inexpensive (around $2 per can) and have a minimal alcohol and calorie content.
The tastes of American consumers are changing and US beer sales are falling in favor of hard seltzer drinks
People in America are looking for healthier alternatives to moderate their alcohol consumption
The key factors currently driving the growth of the hard seltzer beverages market are related to the changing buying preferences of American consumers and the changing demographics in the United States:
- Low-cost premiumization: the demand for premium drinks among consumers in America is increasing. This trend is supported by an accelerating rate of urbanization in the large cities, where the consumption of low alcohol beverages is higher. But as the main consumers of hard seltzer are Gen Z Americans, cost is also a key factor in conditioning what consumers purchase. This product is compatible with their needs because it tends to be inexpensive, it is also aesthetically pleasing and the wide assortment makes it possible to meet the need to stand out of young Americans.
- Health and wellness: healthy alternatives with moderate amounts of alcohol are increasingly sought after. The public debate over sugar is driving demand for healthier alternatives such as hard seltzer drinks.
The pandemic has also been a perfect incubator for the new category of "beyond beer" or hard seltzer drinks in America. The trend of non-alcoholic and low-alcohol drinks has been on the rise in the US market for at least seven years. The difference is that, once, American consumers' purchasing decisions regarding non-alcoholic (or near non-alcoholic) beverages were driven by the need not to drink: this applied to drivers, pregnant women, and former alcoholics. On the other hand, today's consumers proudly claim that they could drink alcohol but simply don't want to. Interestingly, 78% of low-alcohol drink buyers also buy beer, wine, or spirits: moderation is the driving force behind the purchasing decisions made by young American consumers.
The hard seltzer market in America is driven by the new generations of US consumers: Millennials and members of Generation Z
Millennials and especially Gen Z are more aware of the choices they make and more attentive to nutrition, an element that is fashionable with their peers. And the slew of new products available on the market, such as hard seltzer drinks, is fueling this trend in the US.
Foreign beverage companies in the US risk losing a significant market trend in the hard seltzer category: product premiumization
Sales in the US hard seltzer market will grow at an annual rate of 23% over the next three years
Although rumor has it that this category is nearly obsolete, on the contrary, the low-alcohol beverage industry is evolving and maturing, with an increasing focus on value over pure sales volume growth. Companies worried about the inevitable slowdown in sales after the incredible levels seen in 2020 then risk missing out on this less explosive but steady growth in the US.
One thing is certain: America's leading hard seltzer brands will constantly seek innovation to avoid standardization. It will be a matter of making subtle changes and leveraging light premiumization strategies (in terms of flavor or branding) to remain their relevance for American consumers.
In short, this business direction should not be discarded a priori. By now, the excellent prospects for the evolution of the hard seltzer drinks category in America are certain and it is therefore better to set to work with expert consultants to plan an explosive entry into the US market.