What’s Next for “Beyond Beer”?
The eclectic category has been on a tear for the last three years. Can we expect growth to continue in 2021? Yes!
Over the last few years, beyond beer, the amalgamation of a beer category that includes hard seltzer, tea, coffee, kombucha, and ready-to-drink cocktails, has been the most innovative, profitable, and exciting space in beer. While traditional beer saw modest growth in 2020, the beyond beer category grew 130% in the off-premise and now commands a 10% share of the beer category.
If there is any doubt that consumers are consistently turning to the beyond beer category, consider this: Boston Beer’s big hard seltzer bet of 2021, Truly Iced Tea Hard Seltzer, became the #5 hard seltzer SKU in only a matter of weeks! In today’s beer landscape, that’s something you’ll only see happen beyond beer.
While this category covers a diverse range of beverage types, it won’t be a surprise to anyone that the lion’s share of growth in the category is due to hard seltzer’s three-year reign as the hottest beverage of choice.
If Truly Iced Tea’s fast start is any indication, hard tea is the next big segment in beyond beer. Currently sitting at about a 1% share of beer, hard teas have started 2021 hot out of the gate, trending up 49.7%. The secret to hard tea in 2021 is that it’s still largely a one-player segment in our region with Twisted Tea. With a proven track record, quality, flavor, and availability, Twisted Tea wins the day. The hard seltzer iced tea category is a big opportunity to retailers, as non-alc iced teas are already a $9 billion category, one of the fastest-growing market segments.
Non-alc beer is also poised to have another banner year. In 2020, non-alc growth out-paced almost every other beer category at nearly 40%.
Many non-alc brands saw significant growth in 2020. With big players like Coors Edge and Heineken 0.0 leading the way with double or triple-digit growth and even traditional non-alc brands like Kaliber up over last year, expect this space to become more crowded, just like hard seltzers. The door is open for craft brands like Sam Adams and Dogfish Head to make a splash with their non-alcs, Just the Haze, and DFH Lemon Quest, as well as Ceria, the new non-alc brand launched by Keith Villa of Blue Moon fame!
Now that many consumers have become “at-home bartenders” out of necessity, the RTD cocktail segment has upped its share as well (see page 37). And hard kombucha is also getting its footing, with brands like Sierra Nevada’s Strainge Beast generating a lot of attention and repeat purchase. Thus far, much of kombucha’s growth has been thanks to west coast consumers, but as market penetration and distribution growth in the east and customers continue to turn to beverages that boast “better-for-you” bona fides, look for kombucha to have a big 2021.
The beyond beer category is firing on all cylinders, and savvy retailers will strike while the iron is hot. Studies show that beyond beer, consumers by nature seek variety, so the more options retailers offer their customers, the more likely this category’s vigorous growth will continue.