Watching valuable beer shelf space go over to hard seltzer has been irritating. I always figured it was just another in the constant fads of “alcohol for people who don’t like alcohol” that comes in waves. I was wondering if hard seltzer would have staying power. It seems to not. The big breweries thought it might too and made errors in investing in it.
Boston Beer had wild expectations for Truly hard seltzer sales this year. The “craft beer” corporation had White Claw’s market share lead in its sights and hired Dua Lipa as part of a huge marketing campaign. This big bet did not pay off. Boston Beer not only reported a miss in its Q2 earnings but leadership also downgraded its future outlook. Full-year depletion and shipment growth is now estimated at between 25% and 40%, a decrease from the previously reported estimate of between 40% and 50%. This caused shares to immediately drop 26 percent.
“During the second quarter we saw significant growth in the On-Premise channel and re-opened all our retail locations as most COVID-19 restrictions have been lifted,” noted Jim Koch, Chairman and Founder of the Company. “However, our 24% depletions growth for the second quarter decelerated from our first quarter growth of 48% and was below our expectations, as the hard seltzer category and overall beer industry were softer than we had anticipated.
So, is that it? Are the headlines correct, this time? Is the hard seltzer craze over? Over seems like a pretty strong word for such a popular drinks category, but maybe I’m underestimating how many people buy booze based on earnings projections.
And at the very least, it turns out no one wants hard seltzer branded with beer names:
The decision to halt production of Coors Seltzer comes on the heels of the Orange Cream Pop flavored launch in early June and only two weeks after the announcement of the spiked ice cream collaboration with Tipsy Scoop.
The brand said it is ceasing production of its spin-off hard seltzer after analyzing industry figures indicating that hard seltzer extensions of traditional beer brands fare poorly in comparison to standalone labels like White Claw and Truly.
“That’s why we’ve made the decision to discontinue Coors Seltzer in the U.S. and commit our energy, resources, material supply, and shelf space to Vizzy and Topo Chico Hard Seltzer,” the statement read.
Orange Cream Pop…… Yuck.
I mean, people can drink what they want. But it really shouldn’t be surprising after decades of this that these products come and go like the seasons.