Hard seltzer sales go soft as low-price beers pick up

When consumers look to crack open a cold one this summer, they may not be pulling a hard seltzer or premium beer from the cooler. These segments are seeing sales fizzling out this summer, according to major beer makers, as consumers increasingly favor adventurous flavors and price-conscious options.

Hard sell-tzer: On Truly Hard Seltzer-maker Boston Beer’s Q2 earnings call on July 21, chairman and founder Jim Koch said the company saw a “greater-than-expected continuing decline in demand in the hard-seltzer category.”

• Truly saw dollar sales dip 17% in Q2, losing 1.3 share points in the category, the company reported.

“Our core light-flavored Truly business has suffered and not performed as we’d expected, as consumers eagerly adopt what’s new and interesting,” Koch noted.

• In an effort to rejuvenate Truly sales, it’s reformulating its core product with real fruit juice this month and debuting a Truly Vodka Seltzer line in the fall.
• On the bright side: Koch said other RTDs, like Hard Mountain Dew, have been performing well.

Vizzy maker Molson Coors reported a slightly sunnier seltzer performance on Tuesday, saying its share of the segment grew from 7% in Q1 to 9% in Q2 and highlighting its Topo Chico Hard Seltzer, released last year, as a notable success.

Beer on a budget: Consumer preferences in the beer space may be changing as well. While Molson Coors’s US sales volume was down 1.7%—which CEO Gavin Hattersley told CNBC was due to fizzling sales within beer—its cheaper beers may give it a leg up on the premium-positioned competition as a recession looms.

• Three out of four of its lower-priced brands grew share in the quarter. This was its economy portfolio’s best quarterly performance in three years, coming a year after it began cutting down its cheaper offerings.

“What some would regard as an Achilles heel in the past, has positioned us perfectly at the moment,” Hattersley told CNBC. “Some of our competitors only operate in the premium space, which is obviously not a place I’d like to be, as we’re heading into what’s clearly going to be tough times.”

+1: Canned cocktails may be coming to steal share from both beer and hard seltzer. Anheuser-Busch reported last week that its Beyond Beer segment, which includes vodka-seltzer brand Nütrl and canned-cocktail line Cutwater Spirits, brought in $425 million for the quarter.—EC