AB InBev Sees Hard Seltzer Sales Pop

As Beer Sales Slump, Seltzer Is a Bright Spot

Demand for hard seltzer is helping beverage companies regain some of their sparkle. Anheuser-Busch InBev (BUD), the world’s largest brewing company, has seen sales of Budweiser, Bud Light, and other products slump during the pandemic as a result of shuttered bars and canceled events. But flavored, alcoholic sparkling water has provided a bright spot for AB InBev and the alcohol industry as a whole.

As part of its Q4 report yesterday, AB InBev shared that sales for its “beyond beer” category, which includes readymade cocktails and hard seltzer, grew by double digits and topped $1 billion. The company reported overall organic sales growth of 4.5% during the fourth quarter. Much of this growth was driven by hard seltzer sales.

Traditional Alcohol Companies Jump on the Seltzer Trend

AB InBev is relatively new to the hard seltzer game. Early last year, the company rolled out Bud Light Seltzer and it recently launched Michelob Ultra Hard Seltzer.

White Claw, which is owned by Mike’s Hard Lemonade, was an early leader in the market. Larger, more traditional brewing companies noticed White Claw’s success and have rushed to develop and market their own hard seltzers in recent years.

Traditional domestic beer is still the largest alcohol category in the US, but it has been losing market share to other types of alcohol in recent years. This trend has been accelerated by the pandemic.

Seltzer Sales Expected to Keep Bubbling

AB InBev sees hard seltzer as a way to win back people who used to drink its beer and have recently become more interested in craft beers, mixed drinks, and other products. Additionally, the company hopes to use seltzer to attract new consumers who might not be drawn to its beer products.

IWSR, the leading alcohol industry data provider, expects that sales for hard seltzer and ready-to-drink cocktails will climb by 21.8% per year between 2019 and 2024. These drinks will mainly cut into beer’s market share. This means that AB InBev, and other brewers, are eager to hold on to customers as they make the shift from beer to newer products.

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