The Increasing Fragmentation of Seltzers

With the rapid growth of the seltzer category, it was inevitable that more participants will chase that growth. Using our newest tool, Label Inquiry, we thought we’d take this opportunity to understand how many and what new entrants are making a play at the seltzer space (for this analysis, we included any labels containing Seltzer or Spritzer on the label).

Through October 2020, the TTB approved 349 labels containing either Seltzer or Spritzer, compared to 198 in the entirety of 2019 (+76.3% and with two months to go).

Interestingly, Spirits-based products have seen the largest increase in product approvals, with 150 labels approved YTD October 2020 (vs. 55 in CY2019). Beer-based products received 128 approvals YTD October 2020 (vs. 102 in CY2020) Wine-based products have seen a slight uptick to 71 product approvals (vs. 41 in CY2020). Note: bw166’s Label Inquiry tool is based only on products requiring TTB COLAs so is not fully comprehensive of malt beverages.

Using the color feature from Label Inquiry, we also took a look at the dominant color used on labels. While neutral colors (Black, White, Beige) are generally dominant, the next three most prevalent palettes are Pink, Red, and Lavender. The commonality in color may represent an opportunity for new entrants to distinguish themselves on the shelf further and stand out in consumers’ eyes.

Lastly, we were curious about the breakdown by source alcohol as well as flavor. Malt and Vodka make up the two largest occurrences (followed by Wine, generically). The more interesting finding is the reasonably large share of labels specifying either Tequila or Agave on the label. When looking at flavors, Lime and Fruit are dominant, followed by Grape and Lemon. Intuitively, fruit flavors represent the predominant options. However, there are some more interesting results. For example, Grapefruit and Mango occurring more frequently than Strawberry and Watermelon. This data may ultimately point to a triangulating consumer demand around core flavors or, perhaps more interestingly, represent an opportunity to differentiate one’s product from competitors.

While we can’t predict the exact results of what these increasing product launches will mean; the scale of the category and the diversity of entrants seems reminiscent of the rise in FMB products in the early 2000s following the success of Smirnoff Ice (Would anyone care to admit trying the likes of Captain Morgan Gold, Skyy Blue, or Sauza Diablo?). Only time will tell if any of these new products can unseat White Claw and Truly.

For more details regarding our Label Inquiry application, please visit our Introducing Label Inquiry page.

TTB Approved 163.5K Products L12M through October 2020, A Decrease of -13.3K (–7.5%)

By Category:

  • Beer: 40K products approved over the L12M (–1.3% vs. last year) and 10K over the L3M (–14.7% vs. last year)
  • Spirits: 17.7K products approved over the L12M (+13.4% vs. last year) and 4.8K over the L3M (+1.3% vs. last year)
  • Wine: 105.9K products approved over the L12M (–12.3% vs. last year) and 23.5K over the L3M (–30.9% vs. last year)

By Origin:

  • Domestic: 90.3K products approved over the L12M (+3.5% vs. last year) and 21.3K over the L3M (–11.5% vs. last year)
  • Imports: 73.2K products approved over the L12M (–18.3% vs. last year) and 16.9K over the L3M (–35.7% vs. last year)

For more information regarding Product Approvals including detailed category breakdowns and origin information (State for Domestic products and Country for Imported products), subscribe to the bw166 Product Approvals Report or visit our website at www.bw166.com.

Beer, Spirits, & Wine – Packaged Imports Decline -6% By Value L12M through Sept. 2020, Packaged Exports Grow +1%

Total Beverage Alcohol:

  • Total beverage alcohol imports (including bulk and packaged) declined -5% by value over the last twelve months and grew +1% by value over the last three months. 31% of all imported beverage alcohol by value came from Mexico over the last twelve months.

  • Total beverage alcohol exports (included bulk and packaged) declined -1% by value over the last twelve months and declined -13% by value over the last three months. 22% of all exported beverage alcohol by value went to Canada over the last twelve months.

Each of the bw166 Import and Export Reports (for Beer, Spirits, and Wine) enable tracking Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries.

Beer:

  • Imported beer declined -4% by volume and declined -1% by value over the last twelve months. Over the last three months, imports grew +10% by volume and grew +14% by value. 71% of imported beer by value comes from Mexico.
  • Exported beer declined -27% by volume and grew +4% by value over the last twelve months. Over the last three months, exports declined -33% by volume and declined -14% by value. 20% of exported beer by value goes to Chile.

For more details regarding imported and exported beer across all countries, subscribe to the bw166 Beer – Imports and Exports report.

Spirits:

  • Imported packaged spirits for the last twelve months stayed flat by volume and declined -9% by value. Over the last three months, volumes grew +11% and declined 0% by value.
  • Imported bulk spirits for the last twelve months grew +11% by volume and grew +2% by value. Over the last three months, volumes declined -4% and declined -7% by value.
  • 30% of all imported packaged spirits by value arrived from France while 43% of all imported bulk spirits by value arrived from Brazil.
  • Exported packaged spirits for the last twelve months declined -36% by volume and grew +5% by value. Over the last three months, volumes declined -17% and declined -20% by value.
  • Exported bulk spirits for the last twelve months grew +13% by volume and declined -4% by value. Over the last three months, volumes grew +38% and declined -16% by value.
  • 28% of all exported packaged spirits by value is destined for Panama while 24% of all exported bulk spirits by value is destined for Canada.

For more details regarding imported and exported spirits including detailed category breakdowns across all countries, subscribe to the bw166 Spirits – Imports and Exports report.

Wine:

  • Imported packaged wine for the last twelve months grew +9% by volume and declined -7% by value. Over the last three months, volumes grew +17% and declined -8% by value.
  • Imported bulk wine for the last twelve months grew +14% by volume and grew +16% by value. Over the last three months, volumes grew +17% and grew +35% by value.
  • 35% of all imported packaged wine by value arrived from Italy while 25% of all imported bulk wine by value arrived from Chile.
  • Exported packaged wine for the last twelve months declined -13% by volume and declined -6% by value. Over the last three months, volumes declined -10% and declined -5% by value.
  • Exported bulk wine for the last twelve months grew +11% by volume and grew +2% by value. Over the last three months, volumes grew +34% and grew +17% by value.
  • 39% of all exported packaged wine by value is destined for Canada while 58% of all exported bulk wine by value is destined for United Kingdom.

For more details regarding imported and exported wine including detailed category breakdowns across all countries, subscribe to the bw166 Wine – Imports and Exports report.

Pandemic Pantry Loading: A Half Bottle of Wine and a Half Bottle of Spirits

  • The Beverage Alcohol market has been relatively resilient through the pandemic, although the impact on individual industry members varies broadly.
  • Some data, such as Nielsen trends, highlight the remarkably strong growth of the industry. However, at times, these trends are misconstrued to suggest that alcohol consumption is up significantly – this perception may pose a risk to excise tax increases or pushback against the industry.
  • Instead, for the twelve months ending September, the bw166 Total Beverage Alcohol Index stands at 125.3, a +1.9% increase over a year ago.
  • Official data from states representing 30% of the U.S. Legal Drinking Age (LDA) population has been released through August and for the six months ended August 2020 reflect:
    • Beer shipments are flat.
    • Spirits shipments are +7.6%.
    • Wine shipments are +6.3%.
  • While the Legal Drinking Age (LDA) population is up +1.0%, the increased growth of beverage alcohol translates to an incremental half bottle of wine and a half bottle of spirits per LDA adult. This small increase is more likely the result of incremental pantry loading than an indicator of increased consumption.
  • On-Premise trends are more difficult to monitor; however, several states (representing 12.5% of the LDA population) have released official tax data through August.
    • In April, On-Premise spending for Beverage Alcohol was down -84.4%. 
    • In August, On-Premise spending for Beverage Alcohol partially recovered and is only down -38.6%. 
    • Note that these states generally re-opened On-Premise earlier than other markets, so National trends are likely weaker.
  • Ultimately, the current forecast model developed by bw166 indicates that overall beverage alcohol consumption will grow slightly faster than the LDA population in the calendar year 2020 – likely a result of minimal pantry loading, as noted above. 
  • More detailed information on these trends is available in the bw166 Total Beverage Alcohol Overview.

TTB Approved 165.6K Products L12M through September 2020, A Decrease of -9K (–5.2%)

By Category:

  • Beer: 40.1K products approved over the L12M (–0.3% vs. last year) and 9.9K over the L3M (–13.7% vs. last year)
  • Spirits: 18K products approved over the L12M (+22.1% vs. last year) and 4.5K over the L3M (+11.7% vs. last year)
  • Wine: 107.6K products approved over the L12M (–10.2% vs. last year) and 24.8K over the L3M (–30.4% vs. last year)

By Origin:

  • Domestic: 90.6K products approved over the L12M (+5.4% vs. last year) and 22.2K over the L3M (–9.2% vs. last year)
  • Imports: 75K products approved over the L12M (–15.4% vs. last year) and 17K over the L3M (–36.1% vs. last year)

For more information regarding Product Approvals including detailed category breakdowns and origin information (State for Domestic products and Country for Imported products), subscribe to the bw166 Product Approvals Report or visit our website at www.bw166.com.