The easy way to profit in the beverage alcohol category seems to be anything hard — namely waters, seltzers and other flavored drinks, as well as emerging better-for-you options in those segments and others. And with consumers and businesses alike facing an uncertain summer in the wake of the coronavirus pandemic, these popular beverages can be marketed as providing folks an opportunity to relax and refresh.
Consumers in greater numbers are opting for these spirits, especially as the seasons change and the weather gets warmer. For example, when summer turns steamy, Tops Markets LLC is ready with thirst-quenching adult beverages for a variety of tastes.
For summer imbibing, flavored malt beverages, particularly hard seltzers, are highly popular, along with better-for-you items across alcohol segments, aided by such strategies as sampling, grab-and-go placement, in-store displays, cross merchandising and digital engagement.
Beer in cans continues to rule the seasonal roost, with nonalcoholic options available.
Innovative, versatile formats such as freezable pops will keep customers excited by the category.
According to Jamie Szpylman, Tops’ category business manager for beer, wine and snacks, the Williamsville, N.Y.-based grocer promotes offerings through product sampling programs, advertising in its weekly flier to call out new items, a spotlight feature in the Tops Great Entertaining Spring & Summer magazine, cold-cooler placement, and in-store displays within the beer section, as well as cross merchandising around the store with complementary items. The supermarket chain also uses brewers’ digital consumer offers and giveaways to enhance the consumer experience, which the company communicates to its customers via digital media and its print ad.
“At Tops Markets, the total beverage alcohol category will see major volume increases over the summer months,” says Szpylman. “Roughly 40% of our total alcohol volume is done during the short summer season. Every week during the summer, alcohol sales will be far greater than even Super Bowl week.”
Further, the retailer has experienced year-over-year sales growth in the alcohol category for the past two years. “We do see slight declines in true beer, including craft beer sales, but the explosion of flavored malt beverages, especially hard seltzers, has more than made up for those declines,” observes Szpylman, noting that the FMB segment has logged “triple-digit growth the last few years.”
As to consumers’ other alcohol preferences, he notes, “We are also seeing trends towards better-for-you beverages which are lower in artificial flavors, sugars and calories.”
READY FOR SUMMER
Tapping into both trends in time for summer is a new product line from Brewers Collective, the craft business unit of St. Louis-based Anheuser-Busch. LQD (pronounced L-Q-D) is “a beverage line for health-minded consumers that are unwilling to compromise on taste or quality.”
“After brainstorming with brewers from across the 13 craft partners that comprise Brewers Collective, it became apparent there was an opportunity to collaborate on a unique beyond-beer offering,” said Brewers Collective President Marcelo “Mika” Michaelis at the time of the product line’s March debut in select markets. “With craftsmanship and real ingredients at its core, LQD has provided our brewers with a platform through which they can directly and creatively address consumer needs.”
LQD’s products are brewed using simple, quality ingredients, such as real fruit, that are naturally fermented. Available in individual-flavor 6-packs and variety-tea 12-packs made from sustainable materials, the line comes in three flavors: Hard Agave Limeade, Hard Passion Fruit Green Tea and Hard Hibiscus Green Tea, with Hard Hibiscus Lemonade due this summer. All have an ABV of 5.2% to 5.9% and contain fewer than 200 calories.
Another recent summer-focused malt beverage introduction is sparkling Malibu Splash from New York-based Pernod Ricard USA in Strawberry, Lime, Passion Fruit and Pineapple flavors, sold in 4- and flavor-variety 8-packs.
Meanwhile, among other types of ready-to-drink (RTD) beverages, better-for-you options are also widely available, along with convenience.
“As the weather gets warmer, many consumers are hosting outdoor parties, dinners and barbecues, and rather than toil with creating cocktails for lots of guests, it’s easier to have RTDs on hand,” asserts Kimberly Diggs, content manager at Carrollton, Texas-based BuzzBallz, whose products are made with 100% juice and premium ingredients, and feature less sugar than other major brands, as well as no high-fructose corn syrup. “We’ve certainly observed spring and summer spikes in sales for other RTD brands; however, we generally aren’t seen as a seasonal purchase, which has allowed us to maintain steady sales year-round.”
Diggs adds that “we see the benefit of offering RTDs that are shareable during the warmer months, and have been exploring new flavor innovations and size formats over the course of the past year.” This month, BuzzBallz rolls out Uptown Wine Cocktails, a 1.5-liter RTD in six bold flavors, including Mango Margarita.
In merchandising its products, “BuzzBallz [has] found that our consumers enjoy the hunt of finding their flavor(s) of choice in dump bins,” notes Diggs. “It also showcases, in a visually appealing way, how compact our products are, which is convenient for consumers on the go. In our soft launch of Uptown Wine Cocktails, we’ve found that end cap displays and case stacks in high-traffic areas near meal solution centers of grocery stores have produced the most success for us.”
Additionally, Austin, Texas-based Canteen Spirits’ recently launched canned sparkling vodka-and-soda line offers a gluten-free product with zero carbs, zero sugar, zero sodium and just 99 calories per serving, in all-natural Watermelon, Lime, Black Cherry, Grapefruit and Cucumber Mint flavors, available in 6-packs.
Just because sales in the beer segment are down a bit at retailers like Tops doesn’t mean they’re out as an in-demand summer quaff for consumers, especially in a particular format.
“Summer has a few basic rules: Anything from the grill is always on the menu, photos posted on social media must be perfect, and cold beer must come in cans,” asserts Wesley Jaramillo, commercial marketing channel director — off-premise at Heineken USA, in White Plains, N.Y. “With the warmer weather comes a shift in consumer preference for cans over bottles. Cans cool faster and are more suitable for on-the-go, away-from-home consumption.
“We’re putting our focus on cans to ride the wave of 9% import can growth and 5% Heineken Original can growth,” adds Jaramillo, citing figures from Chicago-based Nielsen.
This month, for the beer brand’s Summer of Cans marketing initiative, the Heineken 15-pack is rolling out, featuring 12 cans of Heineken Original and three cans of no-alcohol Heineken 0.0. “The new pack, which capitalizes on the trend in cans, provides an ideal configuration for summer entertaining and a no-alcohol alternative for times when beer drinkers want a great-tasting beer but without the alcohol,” explains Jaramillo. “Now there’s a pack of beer for anyone and everyone, anytime.”
What’s more, in regard to the rise of healthier beverages, he notes, “With better-for-you drink alternatives starting to make a bigger impact across the category, Heineken 0.0 is at the forefront of this trend, with a better-tasting no-alcohol, fewer-calorie beer proposition.”
Heineken’s summer program will focus on driving display execution, sales promotion and increased distribution of all can SKUs in all channels to encourage trade-up from lower-value beers, supporting 15-pack distribution and displays to boost sampling of Heineken 0.0, with the goal of sampling 10 million beer drinkers. “We will leverage the iconic green identity and brand positioning with engaging consumer mechanics that promote ‘fun with friends’ throughout the summer,” says Jaramillo.
Additionally, social posts will drive consumers to retail, where eye-catching merchandising will encourage purchase of Heineken cans and engage consumers in a sweepstakes. Consumers who share photos with Heineken, using the hashtag #CANdidSummerSweepstakes via Twitter or Instagram, are entered for a weekly chance to win a CANdid Summer prize box or the Grand Prize Custom Summer Vacation trip. A large 3-D can display enhancer prominently shows off the new Heineken lager can design to draw shopper attention to the product, while a wide range of additional POS enables visibility in all store formats.
“Summertime is beer time,” affirms Jaramillo. “Following the few basic summer rules will drive sales and profits and keep shoppers engaged and refreshed all summer long.”
THE LIGHTER SIDE
When it comes to wine, as in other beverage alcohol segments, better-for-you alternatives are coming to the fore, especially in summer.
“We’ve noticed that the fitness and health/wellness communities became early adopters of beverages like hard seltzer that are pushing the envelope and driving new trends,” says Mark R. Warren, co-founder of FitVine Wine, a Lodi, Calif.-based maker of wines that contain less sugar, fewer sulfites and no flavor additives. “That group, in particular, has shifted away from higher-sugar or heavy-calorie drinks in warmer months, and instead opted for drinks that are light and refreshing.”
Continues Warren: “Regarding wine consumption, we see rosé and white varietals become more popular in the spring and summer, aligning with the notion that people want something lighter. Given these are typically served chilled, we think it falls right in line with what consumers are looking for, especially those purchasing seltzers or light beer.” He notes that FitVine’s “Rosé, Pinot Grigio, Sauvignon Blanc and Chardonnay perfectly match the trends we’re seeing, and are an excellent fit for those seeking something lighter in the summer months.”
In marketing and merchandising the product, Warren observes: “The branding is critical. Wine can be intimidating, and there are a lot of choices, so the first goal is to stand out among the crowd and capture the consumer’s attention quickly. Knowing this, we recently redesigned our label and the packaging to give the brand a bold new look.”
The second imperative is “to communicate why your product is different,” he adds. “In our case, retail marketing and merchandising are meant to disrupt wine and get people to think, ‘What’s actually in this bottle I’m about to drink?’ The partners we work with at the retail level are helping to communicate the benefits of our product and are working directly with retailers to set up the type of displays that will appeal to their consumers.”
FREEZABLE, FUNCTIONAL AND FUN
Creative beverage alcohol formats are also enabling consumers to find optimal refreshment during the dog days of summer.
We’ve noticed that consumers have adopted a heightened awareness of ingredients, calorie count and alcohol content,” observes Ken Wegner, president of The Jel Sert Co., maker of SLIQ Spirited Ice, a new alcoholic freezer bar coming to stores in June. “We also observed that they are looking for innovative new products that are portable and enhance their social experiences. Whether they’re at a barbecue, a concert, or having a drink while engaging in summer activities, they want products that are convenient but also premium.”
As to SLIQ, which Wegner describes as “a modern take on the popular freezable treat that millions of consumers grew up loving,” the item “combines premium spirits infused with unique flavors and a sorbet-like texture that delivers a touch of sweetness and a ton of refreshment.”
In developing the product, West Chicago, Ill.-based Jel Sert “took a flavor-first approach,” he notes. “We have an exceptional R&D department that has been trusted by the top CPG brands in the world to launch new products featuring their iconic flavors. They applied decades of experience, innovative thinking, and the latest in food and beverage technology to SLIQ’s development process. The result was a perfectly balanced premium freezer bar offered at a competitive cost.”
According to Wegner, “SLIQ aligns perfectly with current drinking trends and consumption behavior that has been propelling the hard-seltzer space. It has portion control, a low calorie count, 8% ABV, innovative packaging, convenience, premium alcohol, and portability. It’s also functional and can be the perfect way to cool down on a hot summer day.”
When developing SLIQ’s packaging, versatility was crucial. “We need consumers to be able to identify our product in several different scenarios and for retailers to be able to display it in a variety of ways,” explains Wegner. “Our packaging was designed to allow for individual bar sales, 9-count carton sales and displayable case stacking.”
He adds: “From a marketing standpoint, we’re focused on creating opportunities for consumers to engage with both the brand and the product. We want to show them that SLIQ can be easily incorporated into their lifestyles and also enhance their social experiences. We are currently planning activations at summer festivals, creating local retail activations in key markets and participating in top-tier trade shows.”
What’s more, SLIQ is just the beginning of Jel Sert’s move into beverage alcohol, according to Wegner. “We plan to continue to grow and innovate in this new category, and are already looking to the future,” he says. “From sample sizes to jumbo or twin tubes, we can continuously introduce innovations into the marketplace, keeping consumers interested and excited.”
SOON TO BE ON TAP?
When asked what they see ahead for beverage alcohol, suppliers focused on a few important attributes.
Unsurprisingly, Wegner predicts: “We think the alcohol category will see more innovation, with an increased focus on functional products that complement the hard-seltzer space. We also believe flavors will be a key driver for purchase, as well as variety packs.”
“With almost 10 years in business, we’ve seen the trends in RTDs evolve,” notes BuzzBallz’ Diggs. “In past years, consumers were not concerned with product ingredients, but today’s consumers are more knowledgeable. We envision many retailers showcasing RTDs committed to high-quality, natural ingredients to cater to these consumers. There will also be a rise in fruit-forward flavors as consumers continue their quest to healthier lifestyles. Though there will also be a need for products that allow consumers to indulge, which evoke a sense of comfort, many of these products will still need to maintain those quality standards to stay competitive. With the rise in Americans willing to pay a luxury tax on convenience via grocery delivery, we also predict retailers will begin spotlighting RTDs in an effort to drive those consumers into stores.”
“We see the consumers demanding more out of both alcohol brands and retailers,” observes FitVine’s Warren. “We’ve also seen brands start to be more transparent about what’s in their products and what their benefits are. That’s almost the bare minimum for entry for brands who are looking to capture the growth of this new health-and-wellness category.”
He adds: “It’s to the point now where retailers set up specific sections or displays for brands that are catering to consumers looking for something with fewer calories, sugar or carbs. … All in all, it’s more transparency of ingredients, of the brand itself, and quality of the products being delivered.”