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The hard seltzers race
How our new data series can help you monitor changes and grow your brands in the ever-changing RTD category
Analysts have highlighted that the increasing trend towards health consciousness might be a threat to the liquor industry and a decline has been observed in the proportion of Australians consuming alcoholic beverages (1). However, this trend also represents an opportunity for innovation in the sector and a potential key to unlock new growth prospects.
Although the worldwide movement towards moderation is undeniable, consumers are also looking for ‘better for you’ alternatives which translate into higher mindfulness around ingredients and the search for drinks with lower carbs, lower sugar and lower alcohol content.
Major liquor players have indeed been responding to the commercial pressure initiated by this trend for a few years already, notably by innovating in the RTD segment. With a brand-new qualitative offer of RTDs presented in premium packaging and focused on low alcohol, low sugar and natural ingredients that appeal to these health-conscious consumers, brands managed to reverse the market opinion.
Now associated with the positive ideas of convenience and innovation, RTDs are successfully fighting for their share in the Aussie alcohol market.
Here are a few examples of the NPDs answering this trend over the past years. In 2015, Pernod Ricard launched Absolut Botanik, positioning this 5.7% ABV drink as a ‘less sweet’ vodka premix with ‘botanical’ flavours. Diageo also promoted Smirnoff Pure as a 4.5% vodka premix with no preservatives or artificial ingredients. Sugar-free products were also introduced in market such as Wild Turkey & Zero Sugar Cola or Vodka Cruiser Sugar Free.
As the health consciousness trend continues to rise with 42% Australians monitoring how much sugar is in their diet (2), brands are now forced to keep innovating to stay competitive and are now heavily investing in an emerging category that is becoming the star in the RTD fridge: the ‘hard seltzer’ or ‘alcoholic seltzer’ category.
While these products may be new in Australia, data from Nielsen shows sales in the United States have skyrocketed 193% since last year. In the first six months of 2019, Americans spent $389 million on hard seltzer, which was an increase of 210% from 2018. Industry analysts are predicting the alcoholic selzter market will reach $1 billion in sales in the US this year and could be worth $2.5 billion by 2021 (3). This clearly shows that hard seltzers answer current consumer trends. This lower carb and lower sugar alcoholic alternative is perfect for the growing ‘afternoon with friends’ occasion while it also capitalizes on the convenience of cans as a pack format.
In the context of covid-19, RTD is one of the category that doesn’t heavily rely on the on-trade space which makes it even more interesting to explore for many liquor players. We therefore expect the race for market shares to be fierce in the new ‘hard seltzer’ category.
As a matter of fact, many brands have already recognized this opportunity and launched their Alcoholic Seltzers in Australia. We are already observing a fragmented market where smaller craft brands are competing with giants.
If Lion was the first major company to launch an alcoholic seltzer into the Australian market with the introduction of Quincy in November 2019, many others large players quickly caught up or are expected to do so this year. For example, Asahi released its vodka-based sugar free seltzer Good Tides in March 2020. It was followed by Actual launched by CUB in May 2020 and positioned as ‘low-calorie ready-to-drink vodka, made with 100 per cent natural ingredients to a vegan recipe’. Lion also signed an agreement with Mark Anthony Brands International to introduce White Claw Hard Seltzer in Australia, which is already very popular in the US with close to 60% market share. Smaller players are battling hard as well and the following Aussie trendy brands are already available in national banners: Fellr and Sips for example.
It is important to recognise that despite the popularity in the US, the winning strategies will look different in Australia due to the particularity of our market. While the largest distribution channel for seltzers in the US is supermarkets – therefore allowing brands to create impulse purchase as part of broader shopping trips, brands in Australia will have to compete for space in liquor stores. In this context, designing the right ‘where to play’ strategy, focusing on being strategically distributed in the stores with the highest potential (especially in the independent channel) and achieving execution excellence in the fridge will be critical.
To help liquor players make the most out of this trend and generate growth in the off-trade space despite the current crisis, Snooper launched a new syndicated data series to help them track the ever-changing RTD category – including hard seltzers, with a focus on independent liquor stores.
Here is a sneak peak of the insights collected in a sample of stores. If you’d like to access the full report, click on the link at the bottom of this article.
High category penetration
Most of the stores visited had at least 1 Seltzer brand
Increase in range
Up to 10 SKUs
We have seen an increase in the number of players and SKUs from June to August 2020
Increase in Space
Up to 22 facings
The amount of facing allocated to the Seltzer category does not grow proportionally with the amount of fridge doors allocated to RTD highlighting the potential for range extension & new product development
Brands are competing for space
With the proliferation of players in the Hard Seltzers category, brands are fighting to increase their number of facings in RTD fridges, especially in indies.
Bottlemart Middle Swan WA, Metro, August 2020
Single pack type can be a great trial format for new category buyers and can help you claim more space.
16 facings with Actual having the lowest share due to unavailability of single cans
Bottle-O Latrobe Terrace Paddington QLD, June 2020
Indies is a strategic channel to grow distribution and market shares. Small brands are fighting hard for space.
Ray has 4x more facings than Quincy in this Bottle-O in metro QLD
Liquorland Bassendean WA, Metro, August 2020
National banners are also allocating significant space to this emerging category.
12 facings in this Liquorland in WA equally split across 3 brands (vs. 20 facings allocated to the gin-based RTD category)
Examples of brands seen in store – contact us to have the full list and the data at banner and store level.
Monitor new player entrance and benchmark competition to build a data driven battle plan.
Subscribe to our data series to track KPIs such as brand penetration, price, promo mechanics, pack types, # facings , position on shelf, …
Seltzers will also be competing for space with other innovations : is Hard Kombucha the new Seltzer?
Some stores have a bigger Hard Kombucha range and allocate more facings to this category than to Hard Seltzer. Contact us if you’d like to have access to the full data set to track new category penetration and share of fridge to stay ahead of your competitors with your innovation strategy.
BWS Bassendean South WA, Metro, August 2020
12 facings of hard seltzers and 2 brands ranged vs. 16 facings of hard kombucha and 3 brands ranged in store
Liquorland Bassendean WA, Metro, August 2020
12 facings of hard seltzers and 3 brands vs. 8 facings of hard kombucha and 2 brands
Seltzers will also be competing for space with other innovations : is Hard Kombucha the new Seltzer?
Some stores have a bigger Hard Kombucha range and allocate more facings to this category than to Hard Seltzer.
BWS Bassendean South WA, Metro, August 2020
12 facings of hard seltzers and 2 brands ranged vs. 16 facings of hard kombucha and 3 brands ranged in store
Liquorland Bassendean WA, Metro, August 2020
12 Facings of Hard Seltzers and 3 Brands vs. 8 facings of hard kombucha and 2 brands
Planograms are inconsistent and Seltzers are adjacent to different categories depending on stores
How can brands and retailers team up to help shoppers navigate the fridge and implement the right planogram?
When multiple Seltzer brands are ranged, there are rarely blocked together. Adjacent categories also vary significantly. This lack of consistency in planogram raises questions on the easiness to find this emerging category in the fridge, especially in a context where brands need raise awareness among the Australian shopper community.
Contact us if you want access to the full data set to assess what are the top adjacent categories and how it impacts the easiness to find your brand from a shopper perspective.
IGA Dareton NSW, Regional, June 2020
No category blocking with 2 seltzer brands being adjacent to different categories (cider vs. vodka).
Bottlemart Belvidere WA, Metro, August 2020
Seltzers adjactent to gin, cider and hard lemonade
Liquorland Cannon Hill QLD, Metro, August 2020
Seltzers adjacent to hard kombucha in cider fridge
Cellarbrations Daylesford VIC, Regional, June 2020
Seltzers adjacent to hard lemonade, mango alcoholic drink and below cider
Bottlemart Dapto NSW, Regional, June 2020
Seltzers adjacent to whisky & cola and expresso martini
Brands and retailers are investing in POS to drive conversion and educate on 'better for you' benefits
Wobblers, fridge decals and aisle fins are capturing shoppers attention when facing the fridge.
Contact us if you’d like to access the full data set to benchmark your competition merchandising strategy and its impact of product visibility and easiness to find the seltzer category from a shopper perspective.
Sources : (1) Roy Morgan’s Alcohol Consumption Currency Report 2019, (2) IRI, (3) Drinkstrade, (4) MABI
RTD Data series - Get access to the full data set
Contact us to access the full data set, including our photo gallery and insights collected in hundreds of stores across the country. Subscribe to our data series to see how the RTD space evolves on a monthly basis. Stay ahead of your competition and leverage the data to design your innovation strategy and drive growth for your brands.
