Editor’s Note: This blog was originally published by Snooper App. Snooper App was acquired by Wiser Solutions in 2022 and this blog has been revised and repurposed for a global audience. A version of this blog is also published in National Liquor News.
Nearly six months ago we wrote about how our mystery shoppers, as part of our monthly RTD data tracking series, had discovered a degree of in-store category homelessness for the then-new Hard Seltzer category.
At that time, despite a growing number of brands and investment in some POS materials such as wobblers and fridge decals, hard seltzers were spread across fridges. There were six or seven commonly observed brands last August, and White Claw—which, according to Lion, made $4 million in sales in its first week after launch on October 1—was yet to come.
Fast forward to February 2020 and the picture looks rather different, and rosier, for Hard Seltzers although potentially at the expense of Cider and some RTDs. We sent our mystery shoppers back into some of the same stores we monitored in August and November 2020 to see what had changed across six months. Below is what we found.
Brand Proliferation Continues
Then (August 2020)
Most stores our shoppers visited ranged from at least one Hard Seltzer brand and up to 10 SKUs. We had observed an average fivefold increase in the number of brands between June and August, albeit Quincy, Actual, and Good Tides were the most distributed brands.
Now (February 2021)
In 70 percent of the stores we visited, the number of brands had increased dramatically over the past quarter.
More than 40 different brands were found across independent and national chains, with both large manufacturers such as Lion and Diageo, and smaller brands pushing hard with up to 13 brands observed in a single store. The average number of brands per store increased from 1.6 in August to 3.8 in February.
Hard Seltzer Category Is Finding A Home On Shelf (And Elsewhere)
The biggest issue was a lack of layout consistency, with Hard Seltzers broken up as a category rather than blocked together, with some brands sitting adjacent to some categories and other brands adjacent to other categories. And where Seltzers were ranged together, the adjacencies varied tremendously; from cider and hard lemonade to hard kombucha or adjacent to whisky and cola RTDs. This increased the shopper difficulty in finding the category and navigating the planogram.
While Seltzers were rarely blocked together then and adjacent categories varied widely, now we observed a much higher degree of consistency in the way seltzers are displayed with both category blocking and adjacencies.
Hard Seltzers’ share of space in the fridge is increasing, with shelf space sometimes growing faster than the number of brands. This indicates retailers are getting behind the potential of the category.
For example, at Bottlemart Acland Cellars, Hard Seltzer space increased from half of one shelf and two brands in a fridge labeled “cider” in August, to 3.5 shelves and 10 brands in a fridge labeled “pre-mix” in December (see Photos A and B). This represents a sevenfold increase in shelf space and a fivefold increase in brands in just four months.
In addition, Hard Seltzers are also becoming visible outside the fridge with off-location displays celebrating summer occasions and prime placement at the counter (Photo C). Our “100 Days of Summer” report, which assesses the impact of off-location on shoppers from November to January, indicates that the share of display of the RTD category doubled between the Festive Season and January with hard seltzers definitely contributing to this increase.
… Potentially To The Detriment Of Cider And Adjacent RTD
The increase in brands had resulted in an increase in facings, in some cases up to 22 facings in August versus a maximum of 13 facings the previous June. It appeared Hard Seltzers were beginning to compete for space with other “better for you” categories such as Hard Kombucha (whose in-store ranges at that point were sometimes larger than those of Hard Seltzers).
The additional space for Seltzers has had to come from somewhere. Hard Seltzers appear to be claiming space from Cider in some stores. The growth in sales and space of Seltzers has also had a direct impact on oft-adjacent vodka-based RTDs. Some previously fast-rotating SKUs and popular brands are losing their premium eye-level position to Seltzers. For example at BWS Narellan, in August 2020 there was a mini-block of two Seltzer brands occupying less than one full shelf, with Vodka Cruiser positioned at eye level (see Photo D). By November in the same store, Vodka Cruiser had been relegated to the bottom shelf to make way for three shelves of eye-level horizontally blocked Seltzers (see Photo E).
This indicates that categories and brands not playing in Hard Seltzers but adjacent to them should be tracking the impact of Seltzers on their shelf performance. It appears Hard Seltzers, at least from a store execution standpoint, may be on the way to attaining IRI’s projected $300 million in sales by 2025.