Budget beer and spiked seltzer dominated during the pandemic

Customers have been turning away from domestic brews, instead preferring pricier imports, such as Corona, appropriately, and lower-calorie alternatives like White Claw or even straight-up liquor, particularly tequila. But the affordability and larger pack sizes have helped sales of domestic brands, such as Busch Light, Miller Lite and Natural Light, surge higher.

Budget beer has boomed for two reasons: price and familiarity, according to Daniel Blake, senior director of US value brands for Anheuser-Busch. He believes shoppers were in a “stock up” mode as people sheltered in place and had to limit their trips. People were also buying “larger and more trusted brands with an emphasis on affordability,” he told CNN Business.

Blake oversees marketing for Busch Light and Natural Light. Both beer brands have created viral promotions, including Bush Light’s dog adoption campaign that gave 500 people a three months’ supply of beer. Sales have risen since mid-March because they both “bring fun into [buyers’] lives and also do good.”
He said that the beer brands aren’t changing their marketing and are launching new products to sustain growth. For example, Busch Light is adding a limited-time apple-flavored beer in July. Natural Light is rolling out a variety pack of its Natty Light Seltzer brand with a new strawberry-kiwi flavor.
Natty Light Seltzer launched last summer and he said sales “exceeded our expectations.” Anheuser-Busch (BUD) has a number of spiked seltzer brands as it tries to dethrone White Claw and Truly from the top two spots — both combined have a market share of 77%. The remaining top three brands — Bud Light Seltzer, Corona Seltzer and Smirnoff — make up a combined 16% of sales, according to Nielsen.

The category is keeping its monster-growth pace, leading to several brands launching new spiked seltzers at a dizzying clip. Last month, Anheuser-Busch launched Social Club Seltzer, a premium seltzer with cocktail flavors, like an Old Fashioned.

Seltzers have racked up nearly $1 billion in sales from March 7 to May 30, according to Nielsen. In comparison, spiked seltzer sales totaled $1.5 billion in all of 2019. That makes it an enviable category for large and small alcohol companies to dip their toes into, even if competition keeps tightening.

“Within the hugely successful and growing hard seltzer segment, new and ‘old’ brands alike can succeed even if their market share is relatively small or declining, because the total pool of sales of hard seltzer within US retail is growing at such a high rate,” Danelle Kosmal, VP of Beverage Alcohol at Nielsen, told CNN Business.

“As such, with new launch after new launch, manufacturers may lose market share but continue growing their sales,” she added.

Source Article