CryptocurrencyInvestingBanksReal Estate

Move Over Rosé: Hard Seltzer Is Taking Over Summer

May 31, 2019, 3:00 PM UTC

Rosé all day? Not this summer.

As Americans head into beach-and-impromptu-barbecue season, there’s a new de rigueur beverage chilling next to the rosé. Hard seltzer is poised to assume a meaningful corner of the alcohol market, thanks to its light profile, convenient packaging and, perhaps most of all, the now established popularity of sparkling water. Hard seltzer, made from malted barley or fermented sugar, averages 100 calories or less and is about 5% alcohol. It’s a new addition to the beer market’s Flavored Malt Beverage category, but in tone and experience, is more like sipping a vodka soda…or like you added a splash of alcohol to your LaCroix.

The sparkly beverage with low ABV first came on the scene in 2013 with SpikedSeltzer. That brand was acquired by Anheuser-Busch in 2016 and renamed Bon & Viv’s Spiked Seltzer. Now, seemingly every month a new brand is launching, including Truly. All told, the alcoholic seltzer market makes up a 2% share of the beer market. That might not sound like much, “but the interesting part of this is how incredibly it’s growing,” says Macquarie Research’s Caroline Levy. (Macquarie Group Limited and its affiliates owns 1% or more of the equity securities of Boston Beer, the owner of Truly.) “The sales cycle for hard seltzer was originally seasonal and in the last year or so, it’s had tremendous growth over the winter.” She attributes this year-round growth to hard seltzer being a transportable cocktail alternative that’s so much lower in calories than beer. “It’s hitting on a major trend, which is health and wellness,” Levy said.

Courtesy of Candace Hampton/The Beauty Beau
Courtesy of Candace Hampton/The Beauty Beau

Bon & Viv, which has flavors like prickly pear and cranberry, may have been first, but the largest is White Claw (ruby grapefruit! natural lime!), which holds just over half of all the spiked seltzer market, while second in market share is Truly (pomegranate! blueberry and acai!). The group as a whole had nearly $488 million in sales in 2018 and clocked in 193% year-over-year sales growth in April of this year, according to Nielsen data.

Levy sees “a massive distribution opportunity” up ahead for most of the hard seltzer brands, as convenient stores and grocery stores are nowhere near saturation level and there is a consensus view among industry experts that with boozy sparkling water “there is something bigger underway.” Unlike others that appear on the FMB scene, such as hard root beer or Four Loko, hard seltzer has a certain amount of ‘premiumization’ going for it (yes, that’s affordable luxury you’re tasting).

Situated one block from San Francisco’s Mission Dolores Park, the Dolores Outpost is a specialty corner store that sells Japanese snacks, kombucha and mochi muffins. Its shelves and refrigerated cases are filled with sake, craft beers, and wine, much of it in small cans, all the easier for an afternoon lolling on the grass in the park. White Claw has been on backorder for two weeks, while the distributor waits for more product. Customers started asking for the black cherry hard seltzer a month ago. “Probably half our requests this week were for White Claw,” Bruce Aguirre, the store manager, said. “We had easily 7 or 8 requests for it just this past weekend.”

Guess they’ll have to drown their disappointment in rosé for now.

More must-read stories from Fortune:

—Know what to look for to find a great bottle of rosé

—Move over Bourbon, premium rum wants its turn in the spotlight

—These are the canned wines you should try

—Listen to our new audio briefing, Fortune 500 Daily

Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.