Beer may still be king for some, but visit any grocery or convenience store and you’ll discover there has been a shift—one that snuck up on many who believed craft beers were the only new kid on the block. Enter the hard seltzer.
As flavored seltzers spiked with alcohol, these lighter-than-beer, fruity beverages ramped up from a virtual unknown in 2013 to gobble 10% of the market share by 2020 and earn over $14 billion in revenue so far in 2022. But there are signs that the market is plateauing, even as major brewers and craft beer manufacturers are racing to create and cleverly market new flavors and varieties.
And just as consumers are getting comfortable with sharing their beer aisle space with a dizzying array of hard seltzers, there is another disruptor on the horizon, galloping towards a store near you.
Changing Consumer Preferences
If you follow the trends, it’s easy to see that consumers are on a journey of maturation. Beer was the mainstay for decades, but even as hard seltzers have gained popularity, people with discerning taste are moving relatively quickly away from malt-based seltzers to something more authentic and with better taste: spirit-based canned cocktails that are more akin to a bar-made drink.
When compared to other ready-to-drinks (RTDs), distilled-spirit-based cocktails in a can are on a completely different playing field than malt-based hard seltzers and are geared for a more experienced drinker who wants a stronger, bolder cocktail. They want more authentic beverages, ones that taste familiar, are made with the right ingredients and proportions, and deliver the classic cocktail vibe.
Malt-based beverages aren’t all bad, but many of them are full of sugary, artificial flavors and colors that sound interesting but aren’t made with quality ingredients. If you drink enough of them, you’ll get a buzz, but when quality is more important than quantity, it’s time to move on from the hard seltzers and drink something you’d stock your bar with or see in a craft cocktail made by a respectable bartender. Hard seltzers will likely always have their place, but it’s great to see people who want the convenience of RTDs have more options.
Hard seltzers show that a significant portion of the world is looking for something beyond beer—a new experience that offers convenience and variety. And while hard seltzers filled a void for a time, discerning consumers are still looking for more. They want manufacturers to add quality to the mix, driving acceptance of alternative canned beverages, which is now attracting people to this emerging, spirits-based RTD space. They are finding that nothing replaces a properly made cocktail.
Are Seltzers Dead?
Beer isn’t dead. Neither is seltzer. In fact, malt-based products currently make up 90% of RTD sales. What we’re finding, however, is that RTDs are experiencing polarization. You’re always going to have loyalists—die-hard beer drinkers who would never be caught holding a can of pineapple-mango wine spritzer. And you’ll likely forever find hard seltzer lovers who believe their canned watermelon vodka seltzer is the perfect substitute for a heavy beer.
Those who prefer hard seltzers may be surprised to know the newest trend is really not that innovative. Yes, canned hard seltzers and spritzers are relatively new to the market, but they’re just slight variations of stuff that’s been in this category forever, sold at a convenience store near you: drinks that are often malt or wine based and targeted to the less experienced drinker. Think Truly and White Claw.
Then, there are the higher-quality, spirits-based seltzers that contail actual spirits, like vodka. Brands like High Noon and Onda are making a name for themselves and offering drinkers something a bit more elevated than the basic hard seltzer.
On the opposite end of the spectrum, you have the fastest-growing segment of the RTD category. This small but growing group of well-made, distilled-spirits-based RTDs is ascending rapidly with a focus on the more experienced, discerning drinker who appreciates a well-made cocktail.
They are looking for the real thing—an RTD cocktail made only with what they’d stock in their own bar. If the can says a margarita, for instance, they expect a proper shot of premium silver tequila, orange curacao and 100% real lime juice. No seltzer water to make it fizzy, no bright colors or sour mixes. Just a perfect blend of authentic ingredients in just the right proportions—something they can just open and pour over ice. Brands like Long Drink, Post Meridiem and Cutwater are among the best.
The thing is, many of those who drink the malt-based hard seltzers don’t understand their canned margarita doesn’t contain any spirits and is not actually anything close to a real margarita. The same goes for all other cocktail-like seltzers. It’s easy to get confused. The Daily Beast explains it this way: “While no one could blame you for thinking that hard seltzer was essentially a canned Vodka Soda, it’s actually more like a beer. You see, because of tax rates it’s much cheaper to brew alcohol from sugar and then carbonate it than to use a distilled spirit and mix it with club soda.”
Thankfully, some are willing to invest in quality ingredients and manufacturing processes to deliver a better experience.
Those Doing the Spirits-Based RTD Cocktails Right
Some will never care much about quality, but we are seeing there is a growing market of those who do, whether it’s for RTD alcoholic beverages or any food or drink. These consumers want convenience but also authenticity, top-shelf ingredients and products they view as healthier options. They don’t want the added sugar and artificial ingredients, especially those found in seltzered-down drinks.
And manufacturers are listening. What once began as pandemic-spurred, at-home drinking, where consumers craved craft cocktails but couldn’t get one made, momentum continues to build long after the shutdowns. As we return to normalcy and people are flooding restaurants, bars and music venues again, there’s no indication that the adoption of RTD beverages will slow down.
By embracing premiumization, ingredient transparency, provable authenticity and innovative packaging, some pre-mixed cocktail companies are carving out their own niche among their competition. They want to be recognized as a superior cocktail you’d be proud to serve guests, carry in a cooler and even order from a restaurant.
Yep, it’s not just in-home sales that are driving the adoption of RTD cocktails. Restaurant bars and other high-traffic bars like at music festivals are opting for the convenience, speed and low cost of serving up canned cocktails. It can be much faster and less expensive and labor-intensive to open a can of a bar-quality cocktail than to stock a bar with all of the ingredients needed to make a variety of cocktails. All of these factors can help venues reduce their labor costs while still delivering premium cocktails their guests love.
The companies at the forefront of the rise of premium RTDs are focused on quality—from their ingredients and packaging to their retail locations. Today, most offer online sales as well, giving consumers an easy way to try a variety of canned cocktails with little effort. It will be interesting to see how this product category impacts consumer purchases, the beer and seltzer markets, and how people view canned cocktails.
One thing we know for sure is consumers now have better alcoholic beverage options and no longer have to compromise quality for convenience. Try Post Meridiem’s extensive line of award-winning, spirit-based cocktails and taste the difference.
