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Hard seltzer awareness is quickly rising

Daniel Roberts

If you’ve watched any NFL games on TV in the past few weeks, you could not have avoided noticing the flood of ads: Bud Light launched its hard seltzer this month, Bud Light Seltzer.

Yet another hard seltzer brand? And launching in winter?

Yes, and yes—and the data supports Bud Light’s late entry into the market. UBS, in its second “hard seltzer pulse check survey,” finds that category awareness of hard seltzer among consumers is way up in every metric since September.

By every metric, and no matter who is calculating the data, the growth of hard seltzer has been astounding. Sales are up 210% in the past six months. (Abel Uribe/Shannon Kinsella/Chicago Tribune/Tribune News Service via Getty Images)

In its survey of 1,029 alcohol-drinking Americans, UBS finds that more people now say they are drinking hard seltzer “regularly” (21% vs. 19% in September), a lot more people say they are drinking it “occasionally” (32% vs. 27% in September), more say they are “familiar but never tried it” (19% vs. 18% in September), and most telling of all, far fewer people say they are “not familiar” with it (14% now vs. 21% in September).

UBS also reports findings on why people are drinking so much hard seltzer: the biggest driver is taste (48% of respondents); then it’s because they “like trying new things” (43%); then “seeking variety” (32%); and, tied with the previous reason, the belief that it’s “healthier” than other beverages (32%). It’s interesting that, despite all the hard seltzer marketing that has focused on the product having fewer calories, taste and newness trump health appeal.

chart via UBS

The climbing category awareness, UBS concludes, “increases our conviction that the category will grow from $1.75 billion in 2019 to $4.7 billion by [end of] 2022,” a 39% average compound annual growth rate.

But unfortunately for the rest of the field, UBS sees Truly (from Boston Beer) as “the greatest beneficiary of this growth across our coverage.”

Indeed, Anheuser-Busch InBev (BUD) is launching Bud Light Seltzer into a comically overcrowded market, packed with existing seltzer brands including Truly (SAM); White Claw (owned by privately held Mark Anthony Group, owner of Mike’s Hard Lemonade); Bon & Viv (bought by AB InBev in 2016 when it was called Spiked Seltzer); and Henry’s (MillerCoors), plus many more. And more are launching all the time: Just this week, Barefoot Wine announced it will launch Barefoot Hard Seltzer just in time for “summer of seltzer 2020.” InBev has a third seltzer brand – Natural Light Seltzer, and is set to advertise Bud Light Seltzer during the Super Bowl.

That’s not to mention a slew of new non-alcoholic seltzers or sparkling waters, including offerings coming soon from Coca-Cola and even jellybean brand Jelly Belly.

Big beer brewers are confident that the category is “here to stay,” says Boston Beer CEO Dave Burwick. “The next generation of drinkers, millennials, are choosing things other than beer, spirits, and wine. They’ve found something that has fewer calories, easy to drink, super refreshing, and it’s a drink people are drinking all year.”

The only concern now is whether and when the seltzer bubble will burst.

NOTE: An earlier version of this story incorrectly stated Truly is owned by SABMiller; that has been corrected, as it is owned by Boston Beer Co.

Daniel Roberts is an editor-at-large at Yahoo Finance, and often covers the beverage business. Follow him on Twitter at @readDanwrite.

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