The daily beast
Sorry, snobs, tough seltzer, and canned cocktails are blowing up
Photo Illustration by Sarah Rogers / The Daily Beast / Photos via Getty The chorus of voices this spring announcing the death of the hard seltzer seem smaller, but more shrill, a sure sign of the continued potency of soft drinks. go away and let it be just a fad. But I’m here to tell you that the hard seltzer isn’t going anywhere and is about to step up a gear. , according to Bump Williams Consulting, the go-to source for beer grade numbers. You might be tempted to attribute this increase to the fact that the coronavirus pandemic has closed bars and restaurants across the country. But in 2020, global hard seltzer sales topped $ 4 billion, up from $ 2.6 billion the year before, and captured nearly 10% of the overall beer category. These are huge numbers for a product that was first launched less than ten years ago. The hard seltzer has fully penetrated national distribution channels and almost all major brewers have at least one brand. Craftsmen also took part in these drinks. Truly, the second biggest seller in the US hard seltzer market, is the product of Boston Beer, which is the parent company of Sam Adams. Hardly a week goes by without another craft brewer – big or small, new or old – announcing that they are also launching a hard seltzer. Recently, it was Stone Brewing, and it’s an interesting argument to enter this industry. “We pay close attention to the data, and the hard seltzer category just can’t be ignored,” brewery new CEO Maria Stipp told me. “At the current rate, the seltzer will pass the trade in terms of category size. So that makes sense to us. Beers are always our priority, we are not straying from that, but craft enthusiasts are drinking hard seltzers from their favorite breweries now. Stone IPA drinkers may be confused, even angry, about all of this, but its seltzers sell heavily in its own taprooms. The launch also shows that Stone has his ears open to the sound of the market. The name of these drinks – Buenavida – and the look reflect a deep understanding of the appeal of hard seltzer: clean, healthy looking, low in calories, and fun. Stone chose to put Buenavida in a clear, embossed bottle, instead of the nearly universal 12-ounce thin box. “Our decision to launch in glass bottles is intentional,” Stipp said. “Glass gives us the opportunity to show off this clean, clear liquid and it feels premium and special.” The premium feeling is something the hard seltzer lacks, and it will need it to continue to grow. We’re expecting a luxury option for almost everything in 2021, from cars and paint to toothpicks, and the big brands have been so busy trying to meet basic demand that there is no had no time and little chance to build one. But there is a new player in the canned drinks category that has a lot of experience in producing high-end products that is now entering the fray: the spirits companies. The Short Answer: Tax Codes While no one can fault you for thinking hard seltzer was essentially canned vodka soda, it’s actually more like beer. You see, because of the tax rates, it’s a lot cheaper to brew alcohol from sugar and carbonate it than to use a distilled spirit and mix it with soda. The US Federal Excise Tax (FET) is different depending on how the alcohol in a beverage is made, and it is much more on spirits than on wine or beer. To keep it as simple as possible (which isn’t easy), a gallon of wine at 16 percent alcohol by volume (ABV) or less is taxed $ 1.07. The tax on a gallon of sparkling wine, oddly enough, is $ 3.40. A gallon of beer no matter what the ABV is just taxed at 58 cents. Cider, which has always received special treatment because of its rural, “real America” image, is taxed at 22.6 cents per gallon. But a gallon of 100% spirits (50% ABV) is taxed $ 13.50. Additional state taxes are also slanted Irish whiskey of my dreams is now available in the US Stop wasting your money on bourbon that’s too old A number of craft distilleries and new beverage brands have started to make canned cocktails that actually use hard spirits. Of course, they pass the tax costs on to the consumer. But the big spirits brands have taken note of the rapid growth and the money being made on hard seltzer and they want to be a part of it. Treat consumers to seltzer with real spirits, from brands they already know and love, like Bacardi Rum, Tanqueray Gin, or Ketel A vodka, and they’ll likely go hard seltzer and even pay more for them. scaring the beer companies, Jim Koch, founder of Boston Beer and owner of Truly, recently wrote a missive to his colleagues in the industry urging them not to bash and see the threat that emerges Which is even more terrifying for Koch and his countrymen is that the spirits brands are trying to change the tax code, so that these spirits-based drinks are treated more like in the eyes of the federal government, David Ozgo, chief economist of the Distilled Spirits Council of the United States, notes that thanks to these ready-to-drink (RTD) drinks, the once-clear lines between beer, wine, and spirits are blurring. Consumers don’t really care what type of alcohol they drink, but how much it tastes, how much it costs, and where they can get it. “Currently,” he said, “spirits consumers are forced to pay much higher taxes for a spirits-based RDT product even if it has the same alcohol content as alcohol-based RDTs. malt and wine, which can be sold more than three. times more points of sale. It is totally unjustified and unfair to the consumer. This fight is not only taking place at the federal level, but also at the local level. Some states are considering treating beer strength RTDs (of any type of alcohol) such as beer or wine for tax purposes and for places where they are permitted to be sold. In my home state of Pennsylvania, for example, an initiative is being considered to allow the sale of spirits-based RTDs outside of state stores which currently have a monopoly on their sales. cocktails and hard seltzers made from real vodka. Dave Williams, vice president of analytics and knowledge at Bump Williams Consulting, believes this is necessary for the success of mind-based RTDs. “Until they can become as widely available as commercially hard seltzers, I doubt we’ll see them reach the same heights,” he told me. “But that doesn’t mean it’s not a fertile area for growth, as we’ve seen a number of brands do very well in this space, including the recently launched Crown Royal line.” market disruptors ”, the hard seltzer is a perfect fit. Now, spirits-based RTDs look like disruptors in the hard seltzer market. It should satisfy the continued desire for new products, for some time anyway. So where does that leave us? Keep in mind that a significant number of people only drink the last thing because … it’s the last thing. They don’t really like what they drink, but they love to drink what everyone else drinks. The hard seltzer releases them from this in the same way as a Vodka Soda. Or as a friend of mine said when he found some hard seltzer, “I’m just glad I don’t have to drink IPA anymore.” This goes along with my own thinking that the popularity of Michelob Ultra indicates that a lot of people want to drink beer … without having to taste it. This lack of flavor isn’t necessarily all negative either. You can add a range of hard seltzer ingredients, fruit, juice and bitter to wine even for a sparkling sangria. Hard seltzers can be your drink or the canvas you paint your drink on. They’re versatile and fun, and don’t require or reward connoisseurs at all. Anyone trying to be a die-hard seltzer snob will more than deserve the derision they get, for me I’ll stick to beer, because I honestly love it, and whiskey, because it’s delicious. and final. But I’m also going to stick with what I said 18 months ago: “Hard seltzer could be the next light beer, something that completely changes basic market assumptions.” For the moment, this work is far from over. Stay tuned. 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