The buzz beverage of 2020 was seltzer. With summer behind us and COVID-19 restrictions easing, the co-founder of B2B beverage marketplace Kaddy Rich Coombes provides insights about the category’s success. This article was first published in Food & Drink Business April 2021.
The year is in full swing and so far, we have seen some exciting trends emerge within the alcoholic beverages industry. As consumer preferences continuously evolve, with more emphasis placed on health & wellness, the industry has been forced to innovate and adapt.
As a result, the rise of seltzers and non-alcoholic beverages are two of the biggest growth categories we are seeing on the Kaddy platform – driven, in most part, by consumer demand for healthier alternatives to your more traditional beer, wine and cider. Here is what we’re seeing and why we don’t see these two ‘low and non-alc’ movements as simply a fad that will fade out.
Independent and Aussie Made
The initial growth and buzz of the seltzer category last year was driven by a solid marketing effort from some of the industry’s big players, such as White Claw and Smirnoff.
Off the back of this, we then saw a few Australian-owned and independent craft brands hit the market that have been able to ride the huge wave of interest in the category, and now in the wake, are continuing to thrive.
If you look back only six months ago, venue operators and bottle shops were faced with the challenge of how to get their hands on a variety of seltzer products. Today, however, the focus is more on what products to buy. What we are seeing are retailers not just trying these craft products but repeatedly purchasing them.
Of the three hundred suppliers currently on the platform, the dozen or so Australian-made seltzer brands have climbed to the top five per cent of best-selling products in just six months. That’s on the back of some exponential growth we had seen earlier in the year when throughout January order volumes for Aussie seltzer brands grew 1.5 times every week.
From what we’re witnessing, the taste and quality of independent Aussie products is resonating more with consumers than some of your bigger Goliath brands, and we’re lucky to have a great range of independents on the platform including Wayward Brewing (W Seltzer), Hop Nation (Ray Seltzer), Modus Operandi (Saintly Seltzer) and Dad & Dave’s (Wildspirit Alcoholic Sparkling Water).
We’re also working with a new wave of Aussie-owned dedicated seltzer brands like FELLR, Delvi Sparkling Alcoholic Seltzer, Wavee Hard Seltzer and Australian Seltzer Co. who are all very well received in the market.
Low to no alcoholic beverage trends
Similar to seltzer, there has been concerted marketing spend from the big established players to educate consumers on the no and low alcohol category as they introduce non-alcoholic versions of their existing beverages. But like seltzers, many independent craft producers are the beneficiaries of this increased consumer awareness – as demonstrated by the sales growth of non-alc craft products on Kaddy.
In the last three months of 2020, leading up to the Christmas and holiday period, the volume of craft non-alcoholic products sold through our channel grew tenfold. This amount of growth was striking because not only were we approaching the ‘silly season’, it was also largely when the country was starting to emerge from COVID-19 restrictions, on-premise was opening-up, and Melbourne’s lockdown was lifted. At the time many assumed that as people celebrated, socialised, and relaxed, the growth of the non-alcohol may slow compared to rebounding alcohol sales, but this wasn’t the case.
Overall, the innovation in the no and low alcohol space in the past year has been incredibly exciting. We are seeing compelling alternatives with the complex taste profiles of alcoholic counterparts hitting the shelves, and they are really resonating with consumers.
It goes to show that the no and low alcohol trend is not purely a reflection of a lifestyle choice or changed attitude – these are also genuinely great, tasty products in their own right that anyone can enjoy. The proliferation of quality products in the category gives drinkers variety and choice, making a switch to non-alc easier than ever before.
Furthermore, and what’s really interesting, is that we’re seeing non-alc products compete with alcoholic beverages in terms of bestsellers each week. For example, in the week prior to Australia Day, a time where retailers were stocking up big ahead of the public holiday, Heaps Normal’s non-alcoholic Quiet XPA was one of the top 10 best-selling products on the platform.
In both non-alcohol and seltzer, it is exciting to witness the growth of these entirely new categories as we tend to see that a rising tide lifts all boats.
Without pre-existing brand loyalties, customers are more open to trying new brands within the space, leading to growth and success for a wide variety of great suppliers and products.
Seltzers and non-alc are diversifying categories – they aren’t token products where you can stock a single SKU and hope it satisfies.
We expect these trends to continue, so offering consumers a choice of fresh, high-quality products is key.
