Seltzers: Hard Sell Or Easy As?

Early last year we looked at the arrival of hard seltzers on these shores in The Alcopopalypse Cometh?, an article examining what they were and asking whether they had legs in the Australian market. It's been a wild and unpredictable 18 months since, but one in which a growing number of local offerings have appeared, and many have thrived.

For all the noise surrounding the category (albeit not so much on these pages), it's one that remains very much in its infancy. Indeed, in a recent article looking at future trends, Stone & Wood's GM Nick Boots said the brains trust there was expecting a couple of boom summers, but expressed caution beyond that.

So, was Australia hit with a summer of seltzer last year? Will we see one in the coming months? If so, where is the market coming from? And are they here to stay?

One craft brewery riding the fruity, fizzy wave is Moon Dog, whose Fizzer range currently features eight flavours such as Pink Flamingo, Strawbs & Cream and Piney Limey. Their forecast for the current financial year sees production be made up of close to 55 percent beer and around 45 percent seltzer – or around four million and three million litres respectively.

Moon Dog co-founder Josh Uljans still believes there's a long way to go for the fledgling category, one in which fellow indie brewers such as Wayward (W Seltzer), Hop Nation ('Ray), Blackman's (Coast), Cheeky Monkey (Great White), St Andrews Beach Brewery (Tidal), and Rocky Ridge (Pop Rock) are among those now operating too.

“In the States, they have the summer of seltzer every year – because people like alliteration, I guess,” he says. “But in the [US], it really took two or three years to really embed itself, and then it grew astronomically. It wasn’t a slow burn, but it did take a bit of time to really establish itself as something that had a broad appeal to a large number of consumers.

“I’d hazard a guess that the vast amount of people [in Australia] haven’t even heard of it, let alone tried it, let alone drink it on a regular basis.” 

With the category still in its infancy in Australia, he feels it’s hard to say with any certainty where it sits within the wider alcohol industry and what its impact is on other drinks. Take into account the ongoing impact of COVID on our spending habits and it makes it hard to tell what’s signal and what’s noise. 

“My sense is that it’s probably taking from a bunch of different categories,” Josh says. “Mainstream beer would be one of them, craft would probably be another, certainly wine, traditional RTDs and cider. It just taps into a desire for people to drink relatively uncomplicated, flavour-led products.”

It's a view reflected by Chris O'Brien (right), general manager of Liquor Barons, a cooperative of retailers in WA that's just signed up its 90th member. Across their stores, 26 percent of their beer sales are craft beer – way ahead of the WA and national average – while the group regularly collaborates with craft brewers in the state.

"It will take some share from beer," he says. "Prosecco, pinot grigio and New Zealand sauvignon blanc will also be hit, white RTDs will be impacted too, and gin because of its fashionable position right now. If the fashion moves to seltzer, then that fashionable crowd moves there."

Chris points to the phenomenal success of White Claw in the US and believes better supply to Australia this summer will see it fare well here too.

"The reason the summer of 2020/21 wasn't the summer of seltzer is that they couldn't get it here," he says. "Those problems have been solved for 2021/22 and I think it's just so huge, particularly in North America, that we're going to see something huge in Australia too.

"We're gearing up because the consumer is telling us they want it, so we need to have a good range available."

Wherever the interest is coming from, Josh says he views seltzer's arrival in Australia as adding a new string to the bow of brewers, who are able to use the equipment and capability they already own to make another product.  

“I’d say that the rate of growth of craft beer is still outstripping whatever it’s losing out of on occasion,” he says. 

“There’s an incredible variety of high quality products for people to get their lips around and I don’t see that going anywhere. If it was, I’d be quite worried.”

Daniel Bone, insights director at data company IRI Australia, says seltzer played a significant role in the strong sales performance of RTD drinks in the last financial year, along with category leader RTD vodka. Already, he says seltzers generate more annual dollar sales than one of the category's other major performers: RTD gin. 

 

Sydney brewery Wayward are one of many smaller breweries to have launched a seltzer range in the past 18 months.

 

“Seltzers, being a fledgling format within the wider category, have been a major driver behind the category’s soaring sales,” Daniel told The Crafty Pint.

“RTD premixes represent the fastest growth category in retail liquor in the financial year 2020-21, growing annually by a whopping 30 percent year-on-year. That compares to [around 7 percent] for beer.”

Daniel says the brands and SKUs underpinning growth in both seltzer and RTD vodka show there’s a trend of people looking to explore “fruitfully flavoursome” offerings.

Not just that – there are other trends in society that seltzers have tapped into with great success to date. While Australia has a decades-long history of RTDs – in contrast to the US – they've still managed to steal a march when it comes to being seen as the healthy choice.

As Chris puts it: "I struggle to find another premix product that can answer so many of the current trend questions that 18- to 25-year-olds are asking: health and well-being; less than 100 calories; no sugar; better for me; relatively low in alcohol."

Add in the presence and cut through a brand like White Claw has on social media, he says, and you've got a heady mix.

Yet, while the category is readily associated with such health-conscious ideas, Josh feels there's still plenty of education to be done within a sector of the drinks industry where there are some seltzers, like those under the Smirnoff banner, that contain vodka, and many which are brewed.

“It’s a complicated market," he says. "Education is key to any new category or style.

“But you don’t have to go far back to see a world that existed before fruit sours and now, through education, they’re a very, very popular style.”

 

 

Another local drinks brand to enter the category since we ran the article linked at the beginning of this story is Sunly Seltzer, part of the Fermentum Group founded by Stone & Wood and thus now part of Lion, which also distributes White Claw in Australia.* The brand is overseen by Pat Coulson, who says they focus on the fact theirs is gluten free and brewed rather than mixed with spirits.

Since launching last June, he says Sunly has "achieved our goals and then some"; they were unable to meet demand during last summer's peak period, with the range selling similar volumes to Stone & Wood's Cloud Catcher and Green Coast despite having less distribution, although, like many producers, they experienced a drop-off as the temperatures dropped.

“The seasonality probably caught us a little bit more than we expected,” he says. “However, I was just looking back at how July and August looked last year and we’ve doubled that, which is a good sign of positive things to come.”

Pay says one of their struggles has been a lack of festivals and major events. 

“There isn’t that other area for trial and awareness, so there is more work to do in bottleshops,” he says. 

“When we were building this brand, we thought that was a pretty big play for us to be at those bigger events.”

While the profile of consumers leans towards women, Pat believes it's not as distinct as some might believe – he suggests the split is probably around 60 to 40. And he thinks seltzers benefit from more people drinking widely; whereas drinkers used to stick to a tipple of choice, that’s been changing as more people flit from craft beer to wine to spirits and, now, seltzers.

“The lines are blurred more than ever," he says, "and drinkers are just trying everything that’s on the shelf now, which is good to see.”

As with many breweries across Australia, in particular those on the East Coast, Moon Dog are first and foremost hoping pubs and bars will be open when summer rolls around. And if there is a summer of seltzer ahead, they're coming prepared.

In what they've called a world-first, Moon Dog have launched a post-mix option to allow venues to offer a range of Fizzers without tying up their taps with them. 

“If you like the taste of seltzer, there’s every chance that there’s an on premise setting in which you’d like to be drinking it,” Josh says, “but there are a few key obstacles to it.”

 

Moon Dog have been developing a post-mix system for Fizzer.

 

First among those problems is the fact most people don’t like to drink a canned product when there are draught options available. And, with tap real estate so hard to secure, it means placing a seltzer on tap means losing a beer tap.

What's more, with seltzer drinkers preferring certain flavours over others, having just one tap doesn’t necessarily cut it. Hence the development of a pre-mix option capable of offering all of Moon Dog's flavours through the one piece of equipment.

Josh says the concept has been in the works since November 2020: they come with 15 litre boxes filled with 17 percent ABV seltzer base that’s then mixed with soda water to create around 60 litres of final product. Imagine the soft drink system at a cinema, for example, and you're on the right track. 

“I love that it doesn’t take a beer tap away, but I also love that it gives people variety and the flavours they want to drink,” he says, adding: “I love that Moon Dog is now at a stage in our life where we have so many brilliant people and the capability and resources to be able to not just come up with a hair brain scheme like this, but actually be able to execute it.”

It goes without saying he'll be hoping seltzer doesn't prove to be a fad, like the flavoured ciders of a few years ago, although the strange times we live in do make any crystal ball-gazing tricky; “I don’t have a clear view of what the world will look like next week, let alone over the coming years,” is how he puts it. 

“[But] more than anything I’ve seen in my time as a booze consumer, it has tapped into something across a wide range of palates and preferences. It’s hard to see how there’s a gimmick there that will lose out in the long run.”

As for the Liquor Barons GM looking to ensure his 90 stores are primed for a bumper summer ahead, he's convinced.

“Completely and absolutely," Chris says, when asked if seltzer has made an impact out west. "Watch out… this is big!"


*The interview with Pat Coulson took place prior to Stone & Wood's sale to Lion (which remains subject to approvals at time of publication). 

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