- Anheuser-Busch is releasing a new Bud Light Seltzer next year and is planning to invest an additional $100 million into the hard seltzer category, according to CNBC.
- The hard seltzer will come in four fruit flavors — Black Cherry, Lemon Lime, Strawberry and Mango. Each can will contain 100 calories, 1 gram of sugar, 2 grams of carbs and 5% alcohol.
- This will be the third hard seltzer brand for the big beer company. It also has Natural Light Seltzer and Bon & Viv.
AB InBev has been in the hard seltzer game since 2016, when it purchased Boathouse Beverage, the maker of SpikedSeltzer. The company rebranded it to Bon & Viv.
But hard seltzer did not really make it onto most consumers’ shopping lists until this summer, when the beverage's sales grew about 164% in the four weeks ending July 30. Sales nearly doubled during the last year, according to Nielsen data.
The growth of the $550 million segment was so profound it even managed to push beer sales in a positive direction for the first time in five years. IRI data puts seltzer in the larger beer category for marketing statistical purposes, and with this method of measurement, July's reported sales of beer were up 3.5% since January, totaling $19.5 billion.
Even with this explosion in popularity, there is still room for growth. White Claw, which controls the majority of the hard seltzer market has limited overall penetration. White Claw Senior Vice President of Marketing Sanjiv Gajiwala told Esquire only 4% of households have bought their alcoholic seltzers. Similarly, UBS expects the hard seltzer category to reach $2.5 billion by 2021, which would mean a 66% annual growth rate and a consumption spike from 14 million cases last year to 72 million by 2021.
Such promise of growth in a wildly popular category undoubtedly prompted AB InBev to amplify its investment in the space to the tune of $100 million, and continue its efforts to grow its portfolio beyond beer. Innovation is a top priority for the company, with CEO Michel Doukeris telling CNBC the company’s overall investment toward new ideas will grow 20% in 2020.
Seltzer seems like a safe bet, but it is interesting the company will release a third line of the beverage rather than invest in the growth of its two already existing brands. After three years on the market, a July analysis of Nielsen data by Beer Marketer's Insights quoted by The Wall Street Journal showed Bon & Viv with a 7.4% share. Mark Anthony Brands' White Claw dominated with 54% of market share, followed by Boston Beer's Truly Spiked & Sparkling with 29%.
The release of a third AB InBev seltzer line could be a way to increase market share by appealing to different segments of the overall hard seltzer market. Bon & Viv is tailored to millennial women as a healthier offering with no sugar and fewer calories, while Natural Light hard seltzer is marketed to bargain-seeking college students with larger packages, a higher alcohol level and a lower price point. Bud Light Seltzer will likely be positioned to attract the average backyard beer drinker looking for a light, crisp option from a familiar brand. In other words, it appears that AB InBev is searching to convert loyal brand buyers who are interested in the hard seltzer trend.
Although the summer of 2019 brought unprecedented growth to the category, only time will tell if 2020 will have a similar result. While projections indicate growth in the market, the pace may even out and AB InBev may find hard seltzer fans have already found their preferred brand — and are remaining loyal.
If that is the case, AB InBev is going to have to get creative to convince curious consumers to try its Bud Light Seltzer rather than reach for the more ubiquitous White Claw.