Canned cocktails are becoming more popular than fizzy seltzers

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Cans of Cutwater Tiki Rum Mai Tai canned cocktails at a retail store in Pleasant Hill, California on February 11, 2022.

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Hard seltzer water has lost its effervescence. Now canned cocktails are all the rage.

Also known as ready-to-drink cocktails or RTDs, canned drinks were the fastest growing spirits category last year, with $1.6 billion in revenue. That’s a 42% increase over the previous year, according to the Distilled Spirits Council of the United States. By comparison, hard seltzer sales are down 5.5% over the past year, according to data from NielsenIQ, a market research firm.

More and more beer companies are jumping on the canned cocktail craze, producing pre-mixed versions of margaritas, pina coladas and daiquiris.

On Thursday, Molson Coors – the brewer of Coors Light, Miller Lite and Blue Moon – announced it was developing Topo Chico Spirited, a new line of canned cocktails made with spirits like tequila and vodka. The company didn’t reveal which three flavors will hit U.S. markets next year, but said the drinks will be modeled after “familiar cocktails” already found on “bar and restaurant menus.”

In a recent report, DISCUS explained why so many companies, especially traditional beer makers, are entering the space. The report found that 94% of consumers choose RTDs because they offer their preferred flavor choice, and 92% said it was because they were convenient. Eighty-two percent said, simply, it’s because they taste better than beer.

“American consumers are increasingly prioritizing convenience, taste, variety and quality in their beverage choices,” said Robert Blizzard, a partner at research firm Public Opinion Strategies, which collaborated with DISCUS on the report. .

Although the canned cocktail market still represents a relatively small percentage of total U.S. alcohol sales – just 4.6% in 2021, according to the report – the category is expected to experience greater growth as that beer companies continue to enter the space and offer consumers even more variety in flavor-packed cocktails they can drink at home or on the go, without mixing or measuring. (Beer sales have not declined, according to DISCUS, but the drink is losing market share.)

Over the summer, Heineken and tequila maker Dos Equis, launched a classic-style canned margarita cocktail made with Tequila Blanco and lime juice.

“Bringing a big brand into a fast-growing category where not all brands are instantly recognizable is a big opportunity,” said Heineken Marketing Director Jonnie Cahill.

Cahill said the cocktail party was a hit.

“The sell-through rate per store is exceeding our expectations. It’s almost double what we expected,” Cahill said, adding that the company hopes to expand to more states and introduce more flavors after this “start.” promising”.

The world’s largest brewer, owner of Budweiser Anheuser-Busch Inbev, is also enjoying success with its foray into space. The brewer – also known for its Stella Artois and Michelob Ultra brands – announced in March that it would expand its portfolio “beyond beer” through its acquisition of Cutwater Spirits. Its three new cocktails include ranch water, rum-based mojito, and vodka soda.

Fabricio Zonzini, president of Anheuser-Busch’s business beyond beer, said while the company hasn’t abandoned seltzer water, “fast-growing RTD spirits continue to become an area of greatest interest to us, with Cutwater being our top priority”.

Tough times for Hard Seltzer

Brewing companies are targeting spirits as sales of hard seltzer, which typically contains malt-based alcohol, decline.

Chris Swonger, CEO of DISCUS, said more and more brewing companies are “recognizing that alcohol consumers are turning to spirits and are choosing convenient ready-to-drink products made from premium spirits.”

The DISCUS report found that for the 12th consecutive year, these and other spirits gained market share over beer and wine, rising 1.7 points to 41.3% of the total alcoholic beverage market.

Boston Beer President Jim Koch said in an interview on CNBC’s “Closing Bell” last year that the hard seltzer boom “isn’t going to go on forever.”

At the time, Boston Beer, known for Sam Adams, was forced to dump millions of cases of excess supply of its Really Hard Seltzer, the Mark Anthony Group’s biggest White Claw competitor, citing slowing sales in industry. The company, which also makes Angry Orchard, said it “overbought” materials for its really hard seltzer water.

“Hard seltzer has lost its novelty as consumers have been distracted by many new non-beer products entering a hyper-crowded market,” Boston Beer CEO Dave Burwick said on a conference call with industry insiders. investors in July.

Still, some companies believe there is hope for hard seltzer. As Molson Coors ramps up its efforts in canned cocktails, there’s room for its Topo Chico hard seltzers and its Topo Chico Spirited line, according to manager David Coors.

“I think [hard seltzer’s] proved he has stamina. I think it’s proven to be a broad, important and stable category,” he said.

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