Industries evolve. But does change occur incrementally, as the result of a long and gradual process, or does it require a watershed moment or cultural flashpoint to accelerate growth? When it comes to beverages and consumer packaged goods (CPG) such as hard seltzers and cocktails in a can, the answer is “a little bit of both.”
To better understand the CPG industry’s overall trajectory, trace the origins of both hard seltzers and ready-to-drink (RTD) canned cocktails, put the two products head to head, and take a peek at the industry’s future direction.
What Is Hard Seltzer?
Time marches on, consumer tastes change, and drink trends come and go. Once upon a time, the landscape of America’s alcohol industry was fairly predictable. Beer, wine, and liquor were your primary choices. You could have a beer from a large-scale domestic brewery or pick up a bottle of your favorite wine or spirit at the liquor store to mix or drink straight up.
Gradually,\ consumers wanted more variety in their choices. In the 80s and 90s, spirits and cocktails came to the forefront of the industry with the cocktail renaissance. This was followed by a wine boom, which brought with it more techniques, suppliers, and resulting variety. As a new generation saw shifts in drinking preferences, a few more major movements entered the industry: the craft beer boom, the hard seltzer boom, and the currently exploding ready-to-drink boom.
Today’s consumers have choices. Lots of choices. Let’s start with hard seltzers. What exactly is hard seltzer though, and what differentiates it from beer?
Hard seltzers generally include three major components:
- Carbonated soda water
- Malt-based alcohol
- Some form of “fruit” flavoring
If you were to judge hard seltzers based on the ingredients alone, you might find them lacking. Yet consumers both crave and prefer the ubiquitous drinks. Something about them speaks to an entire demographic.
Related: A Look at the Current Cocktail in a Can Market
The attraction has to do with the nature of the drink itself. Hard seltzers are designed to be light, low-calorie beverages. In fact, most hard seltzer products contain no more than 6% alcohol by volume (ABV) and come in around 100 calories. Therefore, they represent a more health-conscious alternative to beer.
Consumers have embraced hard seltzers as their drink of choice these last few years. The drink’s combination of light flavor, pleasant fizz, and low caloric value has catapulted them into the spotlight.
The Rise of the Hard Seltzer Industry
“Zomething different!” read the tagline back in 1993. The product being highlighted was called Zima. It was a carbonated spin on the wine cooler introduced by Coors. While the brand initially caught consumers’ attention, it quickly “fizzled out” and faded into obscurity.
Hard seltzer 2.0 came much later, sometime around 2012. Long-time brewing aficionado, Nick Shields, noticed that people were frequently ordering vodka mixed with club soda at the bar. Shields saw potential with the mixture but thought it was inadequate in its current state.
From there, he used his years of experience as a brewmaster to create something unique, working solely out of his garage. The result was a malt-based beverage full of flavor and bubbles. The rest, as they say, is history.
Fast forward to 2022. The past decade has brought an unprecedented level of growth to the hard seltzer category. According to Grand View Research, the hard seltzer market as of 2021 has ballooned into an $8.95 billion dollar-a-year global industry. Even more pronounced is the hard seltzer market’s future outlook. Over the next decade, the compound annual growth rate of the hard seltzer market (CAGR) is projected to eclipse 22.9%, meaning there’s still growth potential to be found.
One way the industry could achieve that growth is through a more diversified space. The two biggest names in the hard seltzer industry, Truly and White Claw, account for an overwhelming 75% of the market share. The other 25% is dominated by smaller manufacturers.
Yet the seltzer boom is hitting its peak, and brands that did not see initial success are fading into the background. Over the next few years, expect to see the craft beer effect take hold in the hard seltzer subset, with more and more small-batch “brewers” entering the space.
With consumers worldwide turning away from beer en masse, it seems like nothing could possibly stymie the industry’s unmitigated growth—except perhaps some really good cocktails in a can.
An Evolution in Taste
Armed with an abridged history of the hard seltzer industry and an awareness of the drink’s surging popularity, let’s introduce some counterbalance to the conversation. Hard seltzers may be the belle of the ball, but there’s a new kid in town: cocktails in a can.
The modern canned cocktail rose to the spotlight sometime around 2017. While technically not the first time that small, independent brewers, manufacturers, and mixologists have tried to catch lightning in a bottle, five years later the canned cocktail is enjoying a similar level of success to its hard seltzer cousins.
But what propelled mixed drinks in a can back into the national consciousness? In short, changing customer tastes coupled with some cultural accelerants. One thing is for sure: hard seltzer paved the way, but canned cocktails have gone above and beyond seltzer’s reach.
According to Daily Seven Fifty, revenue from canned cocktails rose more than 226% in the period from the drink’s inception in 2016 to 2021, with over 50% of drinking-age adults having tried these delicious, convenient beverages.
Last year, overall sales of cocktails in a can reached $1.6 billion dollars, representing a staggering 42% year-over-year increase in sales volume. Here’s the bottom line: cocktails in a can are gaining ground in the hard seltzer community, and sales of the former may soon eclipse the latter.
What’s behind the market shift? In 2017, the idea was a combination of novelty and excitement hot on the heels of an industry finally opening itself to an increased level of variation. Bar-made cocktails represented a high-class alternative to beers and seltzers, with bespoke drink combinations experiencing their own renaissance.
Related: What’s a Vodka Gimlet Made Out Of?
What started as a novel trend quickly matured into a full-fledged paradigm shift, however, due to a slew of societal factors including the COVID-19 pandemic. During the pandemic, canned cocktail sales surged due to quarantines and social distancing requirements. Cocktail fans had to find other ways to obtain their favorite drinks such as daiquiris, martinis, and old fashioneds.
Pandemic restrictions are safely in the rearview, yet canned cocktail sales continue to grow. Mixed RTD drinks have a solid industry foothold, and this particular beverage subset doesn’t look to be going anywhere anytime soon. With that in mind, let’s take a look at how canned cocktails actually stack up against their hard seltzer counterparts.
From Rags to Riches: The Real Difference Between Hard Seltzers and Cocktails in a Can
Hard seltzers and cocktails in a can have had a similar level of unbridled growth, but in terms of taste, ingredients, and overall quality, the similarities end there. While both products speak to the same demographics, they each scratch a very particular itch. Here’s a breakdown of each drink.
From our discussion above, we know that people prize hard seltzers for a handful of qualities, including their carbonation, an ABV that’s comparable to beer, and a low caloric content. Most hard seltzers have ~100 calories and fall into the 4-6% ABV range, similar to the products put out by large-scale domestic brewers. As a result, they are perceived as a healthier alternative to beer.
That said, there is a distinct downside. Hard seltzers use a wide range of sugars, artificial sweeteners, and “natural” flavorings to attain an acceptable taste. In short, the ingredients are designed for mass production and a healthy profit margin.
The right cocktails in a can, by comparison, can have a richer, more complex taste that’s free of artificial flavors, sweeteners, and fillers. Check the ingredients before you buy—the best brands use only premium ingredients in their bar-quality drink blends, and the result is the same drink you’d get if you’d made the trek to the bar and paid the high tab for a freshly mixed cocktail.
For example, a well-crafted canned margarita uses a simple mix tequila, orange curacao, and 100% real lime juice. That’s all that should be in a margarita. The result is a full strength (25% ABV) craft cocktail on par with anything you’d find on the bar scene.
When done right, it’s an authentic cocktail taste in a convenient and portable form. By virtue of their ingredients and the quality of the liquor used, canned cocktails appeal to customers who crave the sophistication and elegance of bar-made drinks but the convenience and versatility of canned alcohol.
An Eye Towards the Future
It’s been nearly ten years since hard seltzer products came along and disrupted the status quo. A light alternative to traditional beer, they went far beyond a simple trend, reshaping the way people drink, and paving the way for the RTD beverage industry. Now, ten years later, the industry is shifting once again, propelling canned cocktails into the spotlight.
Unlike the light, watered-down flavor of seltzers, cocktails in a can provide customers with all the flavors, quality, and strength of a bar-made cocktail but in the convenience of your own home or party scene. Ready to taste the difference? Let Post Meridiem deliver our premium brand of canned cocktails direct to your door. Visit us today for more information or to view our entire product lineup.