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Going clear: Consumers embrace spiked seltzer

BY David Salazar

Alcohol consumers are still looking for a place where everybody knows their name, but recent trends suggest that place is their living room.

New numbers from Mintel show that 55% of Americans prefer to drink at home, and that number may continue growing as the number of consumers who say they are drinking alcoholic beverages away from home less often outnumbers those who say they do so more often. Roughly 29% of younger millennials said they drink away from home less and 69% of in-home drinkers cite cost as a key driver of the reasons they prefer to unwind on the couch rather than the local bar. These trends are likely to continue, according to Caleb Bryant, senior foodservice analyst at Mintel.

“While Americans enjoy going out for a drink now and then, our research shows that the majority of consumers say they prefer drinking at home,” Bryant said. “Today, millennials are currently leading the way when it comes to socializing in the home, but the preference for at-home drinking will likely be even greater among the up-and-coming iGeneration, who are generally regarded as more frugal and pragmatic than millennials.”

What this means for suppliers and retailers is that there’s a growing need for ready-to-drink alcoholic offerings that can appeal to the sensibilities of millennials and those in Gen Z coming into legal drinking age. To do so, the ready-to-drink category in particular has been taking lessons from the nonalcoholic drink category, capitalizing on a growing trend — sparkling water.

Hard seltzer or spiked seltzer is one of the newest segments in the alcohol category — its entrance coming on the heels of the alcoholic soda trend several years ago. Its emergence also has coincided with increased consumer interest in sparkling water as a category, with Mintel’s 2018 Summer Food and Drink Trends Report noting that 37% of consumers ages 25-to-34 years old have had flavored sparkling water in the last three months. Brian Owens, vice president at Kantar Consulting, partially links this to a shopper focus on perceived better-for-you options.

“I think guilt-free indulgence is a driver behind a lot of consumer behavior. Health-and-wellness is top-of-mind, and we’re seeing this across all categories,” said Owens, who will touch on the health-and-wellness consumer at the Kantar Consulting Health and Wellness Workshop set to take place at the W Hoboken on July 25 and 26.

“Consumers in the RTD category are seeking simple, authentic and refreshing cocktails, and are shying away from processed ingredients and artificial sugars and flavors,” said Matt Plumb, marketing director, tequila, at Suntory, which markets the Sauza brand. Sauza recently introduced Agua Fuerte, a sparkling water that features Sauza Silver Tequila, natural fruit essence and no artificial sweeteners.

“What makes Sauza Agua Fuerte unique to the category is it capitalizes on the growth of both spiked sparkling water, which according to Nielsen’s data grew nearly four times just last year, and the popularity of tequila, which is the second fastest growing spirits category,” Plumb said.

Like Sauza, another big name throwing its hat in the hard seltzer ring is Constellation Brands’ Svedka, the No. 1 imported vodka in the United States, which launched its Svedka Spiked Premium Seltzer. Its launch, according to a Svedka representative, is to bring to the RTD category the same things consumers want from a cocktail with less guilt and more variety.

“[Consumers] look for products that fit their lifestyle, are great tasting and feel very premium, but with a greater variety of flavors than they can find in other categories,” The Svedka representative said. “We know that they are looking for options that are low in calories, carbs and sugar, without sacrificing taste. SVEDKA Spiked Premium Seltzer offers a sophisticated twist on the traditional go-to cocktail, infused with deliciously refreshing blends of natural fruit and botanical flavors, including tangerine hibiscus, strawberry elderflower and cucumber basil.”

Beyond borrowing from recent trends in existing categories, alcoholic drink makers also may be responding to a future threat as cannabis makes its way into consumables.

“In California, Lagunitas just launched two sparkling waters — one infused with THC and one infused with THC and CBD, which is the non-psychoactive compound in cannabis,” said Kantar Consulting principal analyst Kate Senzamici. “That’s only available in California because it’s not legal at the federal level, but I think that’s a sign of things to come.”

Owens concurred: “In the alcoholic environment, especially in light of the retailization of cannabis, you’re seeing spirits trying to innovate now to maintain their share of space,” he said, noting that keeping with current trends still is key. “If you think about what alcohol is doing, it’s partially a response to some future threat, but also trying to cater to a new consumer demand we’re seeing across all categories.”

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