Confession Time. Seltzers Are Good.

Beer is getting a bad rap lately. Every few weeks there’s another warning to brewers. People in their 20’s aren’t drinking beer. Instead, they are all turning to hard seltzers.

Sales of White Claw and Truly (Boston Beer Co.) are way up. These lower calorie, lower sugar drinks have sold more than $1 billion worth of products in the past year.

Oh, the horror.

No, big brewers are scrambling to get a slice of the seltzer game. It’s even causing one big brewer to change their name. Come January Molson Coors Brewing will become Molson Coors Beverage Company.

The Motley Fool puts it this way:

After another poor showing in the third quarter, Molson Coors (NYSE:TAP) has come to the same realization many other brewers have:Beer doesn’t sell anymore(emphasis added) — particularly as it’s been taken over by new beverage innovations, most notably hard seltzer.

Everybody is panicking.

Molson Coors is ready to introduce their own line of seltzer. Budweiser maker, AB InBEV, bought out a SpikedSeltzer and rebranded it as Bon & Viv to try to appeal to women. The world’s largest brewer also introduced Natural Light Seltzers this summer and is planning on releasing a Bud Light seltzer soon.

Journalists write drinkers are are shunning beer and turning to seltzers because they so worried about calories and sugar content.

Let’s be clear. This isn’t about health.

One can of Truly has only 100 calories and 2g of carbs. White Claw checks in with the same. Two of Molson Coors light beer offerings have almost the exact same calorie/carb make-up as hard seltzers.

Coors Light only has 102 calories and 5g carbs per can. A can of Miller Lite pack less calories than seltzers (96 calories) with 3.2g of carbs per can.

How did Truly and White Claw surpass the millions spent on marketing light beers? It’s simple. Taste. Many seltzers taste better than light beer. There I said it. And it’s not just me saying this, hence the industry disruption.

I was skeptical at first of the seltzer revolution. I didn’t want to try them. I felt like I would betray my love of craft beer. But, I caved. And I enjoyed.

For me, Truly’s berry variety pack, in particular, blueberry is the best. It’s refreshing and goes down really easily. Maybe the fact it’s owned by the Boston Beer Company helps.

Nah. They are just tasty.

Larger companies like Molson and InBEV often have trouble adapting to new trends because of their size. They move slow. For the past several years, their strategy has been to buy out craft beer brands and use their distribution power and deep pockets to beef up their business instead of innovating.

Molson bought Hop Valley and Saint Archer. InBEV bought several craft breweries including Tempe’s Four Peaks and Chicago based Goose Island.

Now they are paying the price.

As The Motley Fool writes:

Perhaps of greater importance is Molson’s decision to invest in bringing new beverages to market faster, going from an average of 18 months down to four, and getting them to scale up quickly.

That’s likely the result of Molson — and most other brewers — being caught flat-footed by the explosion in popularity of hard seltzer. Molson has its own brand out there, Henry’s, but it is an afterthought in market share. The brewer plans to introduce a different brand, Vizzy, next year, which it says possesses characteristics that will help it leapfrog the competition.

The problem is Vizzy is already way behind the White Claw curve. White Claw is cool or lit or on fleek or whatever the kids say now. White Claw quickly has become ingrained into American pop culture via memes and the phrase ‘Ain’t No Laws While Drinking Claws.’

What’s Vizzy going to do, ‘Vizzy makes you dizzy?’ (that’s exactly why I don’t create memes).

Bottom line is taste matters. Choice matters. Trends change all the time. It’s just a question of who is making the most impactful change.

 

Larger companies like Molson and InBEV often have trouble adapting to new trends because of their size. They move slow. For the past several years, their strategy has been to buy out craft beer brands and use their distribution power and deep pockets to beef up their business instead of innovating.

Molson bought Hop Valley and Saint Archer. InBEV bought several craft breweries including Tempe’s Four Peaks and Chicago based Goose Island.

Now they are paying the price.

As The Motley Fool writes:

Perhaps of greater importance is Molson’s decision to invest in bringing new beverages to market faster, going from an average of 18 months down to four, and getting them to scale up quickly.

That’s likely the result of Molson — and most other brewers — being caught flat-footed by the explosion in popularity of hard seltzer. Molson has its own brand out there, Henry’s, but it is an afterthought in market share. The brewer plans to introduce a different brand, Vizzy, next year, which it says possesses characteristics that will help it leapfrog the competition.

The problem is Vizzy is already way behind the White Claw curve. White Claw is cool or lit or on fleek or whatever the kids say now. White Claw quickly has become ingrained into American pop culture via memes and the phrase ‘Ain’t No Laws While Drinking Claws.’

What’s Vizzy going to do, ‘Vizzy makes you dizzy?’ (that’s exactly why I don’t create memes).

Bottom line is taste matters. Choice matters. Trends change all the time. It’s just a question of who is making the most impactful change.

Mike Broomhead

Mike Broomhead

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