The Alcoholic Beverage Market in the United States

Hard Seltzers are outpacing canned wine sales among Millennials, but especially among Generation Z

The shift in wine consumption habits and more generally in the alcoholic beverage sector in America among the new generations

 

Hard Seltzers are the trend of the moment in the American market among alcoholic beverages, especially among young Americans

Currently, it is the alcoholic beverage category that promises the highest return on investment: sales in America and worldwide are expected to explode

Hard Seltzers are mixtures of sparkling water, alcohol, and fruit flavors sold in cans. Thus, they are very economical to produce. The brands White Claw and Truly lead Hard Seltzer sales in the United States: about 82.5 million nine-liter cases in 2020 (which is already larger in volume compared to the leading spirits category in the United States: vodka)

Market research company IWSR predicts that by 2023, sales of Hard Seltzers in America will be more than tripled, reaching over 281 million nine-liter cases. Hard Seltzers and other "seltzer-like" products hold a market share of 2.6% of all alcoholic beverages in the United States, compared to just 0.85% a year ago. IWSR also estimates that e-commerce sales of hard seltzers will increase from a current share of 0.8% to nearly 2% by 2023, as it becomes easier to sell wine and spirits online in America.
 

Reasons behind the growth in Hard Seltzer sales

One of the main reasons behind the rising sales of hard seltzers in the USA and worldwide is the lower calorie and carbohydrate content compared to beers and other mixed drinks. A can of Hard Seltzer contains about 100 calories and 2 grams of carbohydrates per 12-ounce can, compared to 150 calories and 15 to 30 grams of carbohydrates in a similarly sized beer can.

The marketing, design of the cans, online promotion are among the driving factors for the popularity of Hard Seltzers. If the value of the content is 5 cents, if the cost of the can is another 5 cents, if logistics and structural costs are another 10 cents, the costs of design, promotion, and advertising are at least 1 dollar or even $1.20. The consumption of Hard Seltzers is driven by popularity among young people, and popularity is a function of promo/advertising investment, where promotion and advertising are 100% online. This is also true for canned wine, which is popular among American Millennials, but it is even more true for Hard Seltzers.

MORAL OF THE STORY = to sell canned wine in America or Hard Seltzers, you don't need to produce a world champion wine, but you need to be world champions in marketing, design, promotion, online [read: Instagram and TikTok]
 

The Global Market Size of Hard Seltzer Beverages: Sales Projections 2020-2027

The global market size of hard seltzers was valued at $4.4 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 16.2% from 2020 to 2027. The increase in sales of gluten-free and low ABV beverages in developed markets, including the United States, Australia, and South Korea, has created a significant sales opportunity for the market. Moreover, the growing number of manufacturers has entered the market, creating availability of a wide variety of products.

Last year, the U.S. research agency Allied Market Research estimated the value of the hard seltzer market in the USA at $3.8 billion, with a forecasted year-on-year growth of 12.7%, reaching $10.9 billion by 2027. Currently, these are conservative expectations for a segment that seems to have no limits: minimal alcohol content (5%), sweet and non-demanding taste, negligible cost (it can be found for as low as $2 a can). All ingredients that make hard seltzer the drink of the moment.


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