Hard seltzers are offering a rare area of growth for beer makers with sales doubling in 2018 and tripling in 2019.
With much of that growth being enjoyed by leader and privately held White Claw, America’s largest brewers have been playing catch up in an exploding category. Now, brewing giant Molson Coors (TAP) is getting in on the act with its own hard seltzer brand that boasts what it hopes is a secret weapon: Vitamin C.
Vizzy, which launched in April, comes brightly packaged and proudly boasts on its branding that it’s the only seltzer “with antioxidant Vitamin C.” According to Molson Coors Corporate Affairs Officer Adam Collins, the hope is that leaning into the health aspects that come with that might help the brand connect with the more health-conscious demographic that sparked seltzer’s popularity.
“Seltzers are not slowing down. They're continuing to grow even during the coronavirus pandemic and as you look to compete, you have to figure out how you can stand out from the competition,” Collins tells Yahoo Finance. “This is the first one made with antioxidants and Vitamin C and that’s something that consumers in our testing, from what we’re seeing in our early days and early weeks, are really gravitating towards.”
Collins says the brand is off to a promising start in its first few weeks, making strides in purchasing decisions at major U.S. retailers. However, it will have a long road ahead to catch the established brands in the space.
In April, White Claw held a leading 56% share of the category, followed by Boston Beer Company’s Truly with more than 20%, according to Nielsen data. There remains a large gap for competition for third place, with Bud Light seltzer making the largest strides to take up nearly 10% of the seltzer share. In its debut month, Vizzy notched about 0.5% category share, trailing the nearly 3% share of Constellation Brands’ two-month-old Corona seltzer.
As Bank of America notes in a new research note, Molson Coors is taking a bit of a unique approach in launching Vizzy ahead of launching its namesake Coors seltzer later in 2020. Unlike AB InBev’s Bud Light Seltzer, Natural Light Seltzer, and Constellation’s Corona Seltzer, Molson Coors isn’t leaning on existing branding to launch its first foray into the space. It’s unclear how that strategy will play out, but it’s likely to warrant an expensive marketing push, according to Bank of America analyst Bryan Spillane.
“Collectively we expect the three companies to spend approximately $100 million launching new hard seltzer brands in 2020,” Spillane writes.
He also noted that the beer market continues to see cannibalization risk as seltzers rise in popularity, potentially limiting the upside that beer makers stand to gain. Growth of the overall category continues to accelerate, however, making up 8.7% of total beer retail dollars in the four weeks ending mid-April, up from about 5.0% in pre-COVID-19 time periods.