Pushing the Boundaries of Beer

“Hard seltzer has been a strong growth category, and while growth has been decelerating in 2021, there isn’t another part of the beer industry with that kind of potential,” he observes. “Seltzers remain the fastest-growing part of the beer industry anywhere in North America. We believe that we have two clear and differentiated winners with Vizzy and Topo Chico Hard Seltzer on the U.S. market. Also, while it’s very early, we recently launched the spirits-based Proof Point.”

The relative fragmentation of the beer market has prompted producers to rethink their brands and execute accordingly. However, they haven’t broken with successful traditions, such as promotions during holiday occasions. Heineken USA just unveiled its Dos Equis merchandising graphics for Halloween and Dia de los Muertos, after significantly realigning the brand not only to continue appealing to existing customers, but also to generate awareness and trial among additional consumers.

“We continue to leverage strong distributor and retailer partnerships to drive sales and marketing execution, ensuring that our products are available to shoppers where and when they want them,” says Ligia Patrocinio, senior brand director, Dos Equis. “Our consumer-oriented innovation strategy is working and confirms that the brand can stretch into new segments beyond beer.”

Properly Tuned Promotions

“The key to growing awareness among retailers and consumers is attaching relevant sales promotion programming or incentives to special packaging and line extensions,” Patrocinio adds. “With the brightly colored Dos Equis Lime & Salt Variety Pack … that attracts attention on shelf, branded merchandise to augment display, and consumer giveaways, there is opportunity for retailers to capture impulse purchase and incremental profits.”

Although young people have helped make seltzers a key part of the beer business, Marsha Everton, principal, corporate director and advisor at market researcher The AIMsights Group, notes that Millennial drinker enthusiasm might not last as it becomes more commonplace and less Instagrammable.

“It’s important not to lose focus on the cash cows of the alcoholic beverage business,” she observes. “Seltzer appears to have been strongly driven by off-premise consumption rather than being the beverage of choice in a bar or restaurant. With the return to social life outside the home, beer is taking share back from seltzer.”

Over the next five years, market research firm Mintel expects that the adult-beverage business will feel the effects of experiential shopping in e-commerce, and of interest in beer and cider made with sustainable ingredients, as well as nonalcoholic products developed for adults.

Mintel food and drink analyst Jenny Zegler notes that “beer and cider will continue to be shaped by consumer health consciousness and sustainability priorities. E-commerce emerges as a retail channel to watch.”