Consumers in Europe are reaching for lower-alcohol hard seltzers and ready to drink (RTD) cocktails as interest in moderation grows
KerryDigest Fast Facts:
- Calorie-conscious consumers under the age of 45 are keen to reduce their alcohol intake, but not completely eliminate alcohol from their diets.
- RTD beverages and hard seltzers provide low-alcohol options perceived as being exciting and healthy.
- RTD beverages can incorporate flavours from botanicals as well as bitter notes from chocolate and coffee.
- Hard seltzers are also enjoying success as a low-calorie, low-sugar alternative to traditional alcoholic beverages.
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KerryDigest Full Scoop:
With 43% of consumers under the age of 45 wanting to reduce their alcohol intake, and a third of European adults already doing so, according to Mintel, moderation is a key trend for alcohol brands hoping to crack the Millennial market.
The reasons for this reduction are varied, but include an increased interested in health and calorie reduction. Still, consumers are on the lookout for exciting, high-quality and healthy alternatives, and many would be content to simply drink beverages with lower alcohol volume, rather than no alcohol altogether.
Brands are building on this by including claims ranging from organic and sugar-free to vegan and from investing in the growing categories of ready to drink (RTD) cocktails and hard seltzers, which already address the consumer desire for healthy and great tasting drinks with a lower alcohol content.
Ready to drink cocktails find appeal in Europe
The consumer desire for premium alcoholic beverages with reduced alcohol represent an opportunity for the RTD beverages category. Millennials are familiar with this category because of the alcopops they likely consumed soon after reaching drinking age, but as the target market grows up, pre-mixed alcoholic beverages need to become more sophisticated.
Consumers in this category seek exciting flavours, a premium experience, a healthier product and a delicious taste. Because Mintel found 44% of UK spirit drinkers believe RTDs have too many artificial ingredients, and half of all European consumers would be willing to pay more for a spirit-based drink with a unique flavour, savvy brands are considering how to incorporate the more natural flavours that consumers demand.
Flavours that are more sharp than sweet, such as botanicals or bitter notes from chocolate and coffee are full of potential. Other rising flavours from the last five years include blueberry, grapefruit, rhubarb and orange.
Consumer expectations for RTDs go beyond exciting flavours. Many people are also open to well-executed texture innovation. Funkin Cocktails is one of the leaders in this arena—the brand has launched a range of canned nitro cocktails, which are said to enhance smoothness and aroma.
For young consumers, eco-credentials are among the most important product attributes. For example, Rock Rose introduced re-fillable gin poaches that customers can mail back to the company free of charge. RTD brands could take inspiration from these innovations by creating more sustainable and reusable packaging for their products.
Hard seltzers hop the pond, trending in the UK and beyond
Hard seltzers are enjoying increasing success as a low-calorie, low-sugar alternative to traditional alcoholic beverages, finding extra appeal amongst Europe’s more calorie-conscious demographic. The flavour is light and effervescent from the carbonation and tends to be fruity with citrus playing a strong role as well as some vegetable flavours such as cucumber.
In recent years, hard seltzers took hold of the U.S. RTD alcohol market, with a 212% year-on-year growth from 2018 to 2019 and a market value of US$1.5bn. In recent weeks, hard seltzers sales have risen even more—on July 25, 2020, hard seltzer sales in the U.S. topped US$100m a week for the tenth week straight, according to Nielsen.
The trend has now spread across the Atlantic to Europe, with the number of flavoured alcohol beverages launched in Europe has also increased, from 51 products in Q4 2018 to 119 in Q3 2019. The UK, Germany, Norway and Poland saw the highest number these type of product launches in last 12 months.
White Claw, an established hard seltzer brand in the U.S., launched in the UK in June 2020 to huge consumer demand. This drink contains just 100 calories and 2g carbs and is 5% ABV, fulfilling consumer desire for moderation, with lower alcohol content than cocktails, as well as a low sugar and calorie content. Exposure on social media set the brand apart from its competitors, with 189,000 Instagram posts tagged #whiteclaw at the start of August, 2020.
Opportunities in RTD cocktails and hard seltzers
Part of what makes this category especially ripe for innovation is that the number of offerings currently occupying this space is low. There is also an opportunity for premium private label to shine in the wake of COVID-19 as consumers seek high-end beverage experiences on a lower budget. Under-35s are a target here as they have grown up with private label as an established entity.
Tack on the fact that consumers are increasingly traveling through their taste buds and seeking out convenient but well-crafted beverages, and it’s clear there is ample opportunity for brands to develop products that appeal to consumers interested in ready to drink cocktails or hard seltzers. Established brands can also look into the “better-for-you” proposition to expand their existing range to include more low- or no-alcohol variants.
To learn more about partnering with Kerry on beverages including alcohol, low-alcohol and no-alcohol options, contact us.