The beer cooler at Cheers Liquor Mart in Colorado Springs, Colorado provides a glimpse into overall trends for the beverage these days. “The whole seltzer category has blown up here, with White Claw and Truly leading the way.” says Jack Backman, the store’s owner. “We’ve gone from two cooler doors of seltzers to six in just the past year.” Backman adds that while hard seltzers started out appealing to just younger consumers, “now the popularity has grown to our whole clientele.”
Hard seltzers are also surging at Julio’s Liquors in Westborough, Massachusetts, according to beer manager Jason Hollander. “Most hard seltzer consumers skew toward either White Claw or Truly,” he says. “But many will also pick up a new seltzer release as an impulse buy.”
Hard seltzers and other flavored malt beverages (FMBs) are indeed commanding attention from retailers and consumers. More than two-thirds of the malt-based products earning Impact Hot Brands status this year are FMBs, popular for their generally lower calorie, sugar, and abv content and varied flavors. Just four domestic beers, six imported brews, and two hard ciders joined more than two dozen FMBs as Hot Brands in 2020, a year in which beer sales shifted significantly to off-premise channels.
Hot Brand honors are awarded to established brands with double-digit growth in 2018, 2019, and 2020; established brands with at least 15% growth last year; brands among the top ten in their respective categories with at least 5% growth in 2020 and at least 15% growth since 2017; and significant new products. Fourteen of the 37 brands were new to the list in 2020. Constellation Brands, Molson Coors Beverage Co., and Mark Anthony Brewing each had five brands on the list, while Anheuser-Busch InBev (A-B InBev) and Diageo Beer claimed four.
Doubling Up
Mark Anthony’s White Claw and Boston Beer Co.’s Truly continued to post dramatic growth last year, with both brands more than doubling in volume. According to Impact Databank, White Claw skyrocketed to 95.5 million 2.25-gallon cases in 2020 while Truly jumped to 50 million cases. Hollander says that while White Claw is the top selling hard seltzer at Julio’s, “Truly has emerged as the category innovator. It’s been the first to market with new expressions like Truly Lemonade and Truly Iced Tea, with other brands following suit.” The retailer expects the same to be true of Truly Punch—launched in the spring—of which he says, “it’s doing fantastic so far.” White Claw and Truly are priced at $17 a 12-pack of 12-ounce cans at Julio’s, and are merchandised with stand-alone displays and holiday sales features, Hollander says.
Leading beer marketers launched big-name hard seltzers of their own in 2020, including A-B InBev’s Bud Light, Constellation Brands’ Corona, and Molson Coors’ Vizzy and Coors entries, all of which have been named Hot Brands. But in a sign of how tough the hard seltzer market is to break into, Molson Coors is discontinuing its Coors Seltzer brand, choosing to focus on portfoliomates Topo Chico and fellow Hot Brand Vizzy seltzers.
Reaching volume of 17.9 million cases in its first year, Bud Light seltzer, which added lemonade and iced tea variants this year, “heavily contributed to the Bud Light franchise having its best performance in the last five years,” says Andy Goeler, Bud Light vice president. Corona hard seltzer, meanwhile, “exceeded our expectations” in 2020 due to strong distribution and marketing support, says Ann Legan, vice president, brand marketing for Corona. Legan adds that new innovation, such as the recently launched Limonada expression and increased media investment are planned for this year.
Other new hard seltzer entries in 2020 named to the Hot Brands list included Labatt Blue Light seltzer, marketed by Fifco USA, and Oskar Blues Brewery’s Wild Basin. According to Janine Schoos, brand director of the Labatt family, its seltzer brand has been an early success thanks to “dedicated wholesaler relationships, social media, and word-of-mouth support.” While some hard seltzers struggled with supply issues during the pandemic, Schoos says, “Labatt Blue Light seltzer has been available, stocked, and visible at retail.” Wild Basin, meanwhile, was aided by its colorful packaging and contemporary flavor combinations like lemon agave hibiscus, says Lauren Carroll, brand manager. This summer, Wild Basin was rebranded from a “boozy sparkling water” to a hard seltzer “for better clarity on the shelves,” Carroll notes.
In addition to White Claw and Truly, A-B InBev’s Natural Light and Diageo’s Smirnoff Spiked Sparkling returned as Hot Brand seltzers. Natural Light seltzer more than doubled in volume in 2020. “Natural Light has one of the most passionate fan communities out there,” says A-B InBev’s vice president of Budweiser and value brands Daniel Blake. “The franchise is constantly pushing the envelope in the seltzer category through flavor innovation and with its provocative and catchy product names that grab consumers’ attention on the shelf.”
Smirnoff hard seltzer has also embraced flavor innovation. “Our formula for success has been around a flavor that can be delivered in a variety of formats,” says Smirnoff FMBs director Lisa Lee. In 2021, a pink lemonade line extension was rolled out for the brand, as well as for Smirnoff Ice and the branded vodka.
FMB Frenzy
Beyond hard seltzers, other FMBs, such as Boston Beer Co.’s Twisted Tea; Mark Anthony’s Mike’s Hard, Mike’s Harder, Cayman Jack and MXD; and Brown-Forman Beverages’ Jack Daniel’s Country Cocktails posted strong gains in 2020 and repeated as Hot Brands. Fifco’s Seagram’s Escapes also returned, with growth driven by a low abv and flavor variety. “Our No.-1 flavor, Jamaican Me Happy, continues to grow each year,” says brand director Jennifer McCauley. “Our consumers want more and more variety and are willing to buy multiple packs to get it.” Two other FMBs to repeat as Hot Brands, Geloso Beverage Group’s Clubtails and Johny Bootlegger, benefitted from the shift to off-premise occasions and expanded distribution last year, including placement in large-format retail stores, according to vice president of US operations Paul Rene. New FMB standouts, meanwhile, included Smirnoff Ice, which introduced a zero-sugar option last year; Pabst Brewing’s Pabst Blue Ribbon hard coffee; and Molson Coors’ Steel Reserve 211 Spiked Strawberry Burst and Leinenkugel Spritzen.
Due to unique and extensive flavor profiles, FMBs are increasingly appearing in cocktails, marketers and retailers say, a trend which could benefit on- and off-premise retailers alike. “Consumers of Seagram’s Escapes have the option of drinking it straight from the package or using it as a convenient mixer,” says Fifco USA CEO Rich Andrews. “Both options provide a full-flavor experience within the beer category during occasions that might have been previously reserved for wine or spirits.” Julio’s Hollander says that Truly has become popular as a cocktail mixer, while Cheers’ Backman adds that White Claw and Truly (both $18) have taken market share from flavored vodkas such as Smirnoff, Pinnacle, and Svedka.
With on-premise outlets now reopened and looking to recover from last year’s struggles, FMBs could provide some help. “The on-premise appeal for Clubtails is the ability to serve a delicious cocktail-inspired beverage at locations with beer-only licenses,” René says. And according to Diageo’s Lee, “as consumer behavior shifts back to the on-premise, we see an opportunity to ensure our products are at the right places to offer a convenient, ready-to-drink solution.”
Modelo Movement
Despite the surge in popularity of FMBs, several Mexican brews continued to post stellar performances, led by Hot Brands stalwart Modelo Especial. The top imported brew and No. 6 brand overall, Modelo made the list for the 27th consecutive year with a 14% increase to 144.5 million cases. Greg Gallagher, vice president of brand marketing for Modelo at Constellation Brands, says the label continues to benefit from its “Fighting Spirit” ad campaign, as well as recent partnerships with brand ambassadors Amanda Nunes, the mixed martial artist, and rapper Anderson .Paak. “Significant growth opportunity still exists for Modelo Especial with both Hispanic and general market consumers,” Gallagher notes. Sibling Modelo Especial Chelada, meanwhile, grew 18% to 8.6 million cases, driven in part by the introduction of the Mango y Chile expression, and despite the fact it was only available in single-serve 24-ounce cans and promoted solely with Spanish-language advertising. Multi-packs of 12-ounce cans and English-language ads are planned, though, Gallagher says.
Constellation Brands’ Pacifico and Corona Premier also returned as Hot Brands, up 12% and 20%, respectively. According to senior director of brand marketing Alex Schultz, Pacifico was aided by a big emphasis on digital and social advertising in 2020. And so far this year, he says, “strong momentum continues.” Schultz sees “additional upside with draft as we see the on-premise open up across the country.” According to Legan, Corona Premier, Constellation’s low-carb and low-calorie entry, meanwhile, “sits at the center of two trends that have been driving beer growth—premiumization and betterment.” She adds that the brand has been growing in household penetration at a faster rate than other light beers.
“All of the Modelo brands are on fire,” says Backman from Cheers Liquor Mart. “The growth is coming from not only the Hispanic market but also the general market. The only issue we have been having is with inventory shortages.” Julio’s Hollander, meanwhile, says that Modelo Especial, Pacifico, and Corona Premier (all $17 a 12-pack of 12-ounce bottles), are “taking away” from Corona Extra volume. Modelo and Pacifico attract a younger consumer than Corona, the retailer says, while some Corona drinkers are “trading over to Premier’s low-calorie and low-carb attributes, while staying with the Corona brand.”
Molson Coors’ Sol Chelada, also from Mexico, joined the Hot Brands list for the first time, as did Heineken USA’s Heineken 0.0 non-alcoholic brew. Erica Messing, director of business execution at Heineken USA, says the non-alcoholic beer represents “an incremental opportunity” for retailers, as it’s not a substitute for beer with alcohol. “Younger consumers are paying more attention to no-alcohol options and credibility is growing,” she says, noting that unlike other NABs that are usually merchandised in their own section at retail, Heineken 0.0 is positioned next to Heineken lager. Hollander adds that the brand ($11 a 6-pack of 12-ounce bottles) “does very well at our store. It’s pulling in long-time O’Doul’s consumers and trading them up to an import.”
Stateside Standouts
Just a handful of domestic beers were named Hot Brands in 2020, but A-B InBev’s Michelob Ultra led the list with volume of 148.9 million cases, a 12% increase over year-earlier volume. Like Corona Premier, Michelob Ultra—which was named the official beer partner of the National Basketball Association last year—continues to benefit from its better-for-you positioning. Portfolio mate Busch Light, meanwhile, was added to the Hot Brands list with a 14% gain in volume to 93.1 million cases. Popular in the Midwest, Busch Light “continues to gain steam” in markets beyond, says A-B’s Blake. Indeed, Hollander in Massachusetts says the brand ($21 a 30-pack of 12-ounce cans) “seems to be gaining popularity with consumers in their 20s and early 30s.”
Only two craft beers and two ciders were named to Hot Brands: Sierra Nevada Brewing’s Hazy Little Thing IPA, which leaped 40%; New Belgium Brewing’s Voodoo Ranger Imperial IPA, jumping an impressive 48%; California Cider Co.’s Ace, which increased 11%; and Boston Beer’s Angry Orchard Unfiltered, which was new to the list. According to Sierra Nevada chief commercial officer Joe Whitney, “Hazy Little Thing’s eye-catching graphics and playful name generate trial. It also has the highest rate of sale and repeat purchase rate of any IPA across all classes of trade.” Hollander says the brand ($18 a 12-pack of 12-ounce cans/bottles) is one of Julio’s Liquors top-selling IPAs. Dave Knospe, senior brand manager for Voodoo Ranger, notes that while Imperial has been a part of the brand’s lineup since launching in 2017, “it’s really picked up as we’ve had more and more people trying the beer. The beer is a hit with craft, domestic and import drinkers alike.” At Cheers Liquor Mart, Imperial ($20), along with the entire Voodoo Ranger line, “has shown the most growth in the craft segment in the past year,” according to Backman.
Despite the challenges the beer industry confronted in 2020, some three dozen brands posted impressive results. With the reopening of the on-premise channel in 2021 comes the opportunity for expanded draft beer sales, as well as the inclusion of FMBs in cocktails. Brands that seek to capitalize on current on-premise and off-premise opportunity could very well be among this year’s Hot Brands.