Easy drinking: Homegrown brands tapping into hard seltzers

Homegrown brands are now tapping into hard seltzers, an alcoholic beverage that is said to be refreshing, far lower in calories than beer or wine and with moderate alcohol content

Are you fond of social gatherings but want to focus less on alcohol, not to mention have mornings less clouded by its after-effects? Hard seltzer, a beverage that combines alcohol with flavoured carbonated water, could be a good option for you. It is said to be refreshing, far lower in calories than beer or wine and low on alcohol content.

Hard seltzers have diversified the alcoholic beverage sector and are addressing a shift in consumer behaviour towards low alcohol by volume (ABV) content, fuelling a demand in the ready-to-drink (RTD) market as well.

Hard seltzer is gluten-free, low in calories and a less stressful approach to drinking. As a result, it is gaining popularity among the health-conscious consumers. It is a carbonated or sparkling beverage, with almost 5% ABV and made from brewed cane sugar or malted rice, along with soda water, and flavoured with lemons, watermelons, strawberry, passionfruit, pomegranate and tangerine.

According to the International Wine and Spirits Research (IWSR), hard seltzer is forecasted to remain the primary driver of RTD volumes in coming years, accounting for half of all global RTD volumes by 2025 (up from 30% share in 2020), driven by consumer demand for flavourful drinks with “better-for-you” attributes.

Globally, a robust demand for flavoured alcoholic beverages and the adoption of low alcohol content beverages are predicted to fuel the RTD alcohol industry and outperform the wider beverage alcohol market, increasing their market share to 8% by 2025, as per the IWSR Drinks Market Analysis.

Led by brands such as White Claw, Truly and Bud Light, hard seltzer has been trending mostly in the US and European markets in the past five years. However, it is now becoming an emerging category in other markets like Australia, Canada, APAC regions including China, Vietnam, Singapore, and India. IWSR forecasts this category will triple, commanding a market share of 2.6% of all alcoholic beverages by 2023.

As most people are concerned about the number of calories they consume on a daily basis, especially after Covid, seltzers are said to be a healthier alternative. “The calorie count is greatly reduced with one pint of seltzer containing approximately 80 to 90 calories. This may be a new category in the Indian market but will not take much time once people are aware,” says Mumbai-based mixologist Ninad Raul of Chufang Asian Kitchen and Bar.

Homegrown Indian brands are already venturing into this unexplored ‘sober curious’ beverage category, largely driven by factors such as regulated drinking habits, health and well-being as the top concerns in the pandemic. “The ever-evolving pool of consumers is becoming more experiential and quality driven. Drinking is no longer restricted to intoxication, bitter experiences, and acquired tastes. Taste is supreme with intriguing flavour and consumers are ready to embrace mindful drinking post pandemic. Low-calorie cocktails like hard seltzers offer a refreshing alternative, without compromising on taste and quality,” says Krupa Shah, co-founder of Indian Standard Time aka IST, a seltzer brand which is currently available in Goa. Shah plans to expand IST to Daman, Bengaluru, Delhi, Maharashtra, and Telangana in the coming months.

Indian Standard Time expects to grow at a CAGR of ~120% in the next five years beating the market-defined CAGR by 30%, adds Shah.

On an average, seltzer is one of the most accessible and cost-effective categories ranging from ₹100 to ₹150 per can. Thus, for a trending segment in the US, but not so in India, the consumption will increase as a better alternative for the youth, feels Ruchi Gupta, founder and CEO of beverages startup Barbrew Beverages that launched Barneys during the lockdown in May 2020.

Barneys introduced the brand with the first batch of 24,000 cans sold in Goa in January 2022 and plans to capture four states—UP, Chandigarh, Delhi, and Telangana—as well as one international market (Australia) in a month’s time.

“India is a youth-driven population and loves to experiment. This generation wants to celebrate, feel the tipsiness and at the same time remain fit. Seltzers offer premium elements like jasmine and lemongrass, making the blends unique. The market is oversaturated with endless brands in every segment, beer, wine, vodka, etc, but the ‘alco-pop’/ RTD segment was the only untapped market which we did not want to miss,” says Gupta.

Gupta shares an estimate of how 1.3 billion people consume 20 billion bottles of alcohol every year which is a huge market potential. “Our target group is all above 21 years, over 800 million people. We want to capture 100 million people in three years. It’s a go-to drink for those between 21 and 40 years for both men and women,” says Gupta, who has introduced Barneys in three flavours and lined up another three after receiving aggressive sales enquiries from 10 states. Barneys now plans to expand rapidly by raising about $5 million, aiming to touch $150 million by 2024.

In India, Goa is emerging as a destination to manufacture hard seltzer for its easy access to manufacturing and blending units for brands like Speak Easy, IST, Barneys and Latambarcem Brewers, which has a non-alcoholic kombucha seltzer called ‘Borecha OH!’.

Anish Varshnei, co-founder and chief innovation officer of Latambarcem Brewers, who plans to enter the hard seltzer market soon to tap the segment, says, “A zero-sugar probiotic and prebiotic kombucha seltzer is one of its kind available online and across stores in Goa, Maharashtra and north India. A beverage that has a low calorific count and tapping, this is important after analysing the prospective growth opportunities.”

Mandovi Distilleries and Breweries in Goa, which launched Pursue hard seltzer in mosambi and mint, strawberry and rose, peach and white tea, and mango and chilli flavours, is also present in Goa and Pondicherry. It plans to expand its retail presence in Karnataka, Maharashtra, Delhi-NCR and Telangana at a starting price of Rs 100 for a 330 ml pint.