How Craft Brewers Are Making Hard Seltzer Better

November 14, 2019

By Diana Hubbell, November 14, 2019

White Claw Summer may be over, but with hard seltzer sales for 2019 already soaring past the billion-dollar mark, industry experts doubt we’ve seen the last of hard seltzer. One analysis by UBS estimated that sales could exceed $2.5 billion by 2021. While many initially rolled their eyes at what tasted like cans of LaCroix with a splash of vodka, things got serious right around the time sales of White Claw surpassed those of all the leading macro beers for last July. All of a sudden, there were hard seltzer festivals, public scares of hard seltzer shortages, and harder seltzers sporting 14% ABV from the likes of Four Loko

Now that the temperature and some of the hype have started to cool down, the question that remains is what the future is for this beverage that absolutely nobody cared about a few years ago. At present, White Claw, which is owned by the same corporation as Mike’s Hard Lemonade, and Truly, which is owned by Boston Beer Company, dominate 85 percent of the market. Up until now, the biggest challengers to that hegemony have come from AB InBev, MillerCoors, and other corporate conglomerates behind macrobreweries. 

“If you look at hard seltzer right now, there are a lot of parallels to beer 15 or 20 years ago. You’ve got a few large producers that control the market and the small ones who think maybe we can do it better,” says John Barley, founder of Solemn Oath Brewery, the brewery behind Chicago’s first craft seltzer. “We believe our customers deserve a local option to support, similar to what we do in beer. We think our product is different and we’re changing the narrative.”

One glance is enough to confirm that City Water, which comes in four flavors including Lime Coconut and Valencia Orange Cranberry, is trying to distinguish itself from its macro competitors. The 12-ounce cans sport funky, psychedelic designs with cinder blocks, squirrels, possums, and other urban wildlife. The succinct ingredients list contains no artificial flavors or colors and 3 percent of sales go toward local nonprofits. 

There are a lot of parallels to beer 15 or 20 years ago. You’ve got a few large producers and the small ones who think we can do it better.”

“I don’t see this as a fad. I see this as another creative avenue,” Barley says. “Gone are the days where people just drank the same beer all the time. Depending on the situation, people want to be able to make a choice and seek out new things. I think hard seltzer fits right into that.”

He isn’t the only one who thinks so. Craft breweries around the nation have either released or are in the process of developing their own hard seltzers. It’s easy to see the appeal from a business standpoint. As U.S. beer sales have stagnated over the last few years, the number of craft breweries has continued to skyrocket to well over 7,000. That shift has left a lot of brewers searching for ways to supplement their revenue streams.

“If you're a brewery, you're in a cost-intensive, labor-intensive industry. Craft beer has been growing at a crazy clip for so many years and that is beginning to slow,” says Tucker Gerrick, marketing director at Fulton Beer in Minneapolis. “If you’d built your business on the rate of continued growth for the last five or 10 years, you’re asking yourself what the new thing is.”

Courtesy of Solemn Oath BreweryCity Water

Hard seltzer isn’t just a trendy new thing to adopt; it’s also pragmatic. The Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates sugar- and malt-based hard seltzers exactly as they do beer, meaning most craft breweries already have both the license and equipment necessary to produce them. Unlike a bourbon barrel-aged stout, most hard seltzers can be fermented and ready to sell in less than a week, and unlike a hazy IPA, there’s little worry about them spoiling before they reach their final destination. 

Gerrick remembers a change in thinking during one of Fulton Beer’s company retreats in the spring of 2017. Even the die-hard IPA-fans on the staff were looking for lower-calorie, lower-ABV alternatives to their go-to beers.

“We must’ve drunk a couple hundred White Claws that weekend. Right then, we should’ve taken that as a cue, since we were seasoned beer-drinkers,” Gerrick says. “We started to look at it and say, we could add to this. We kind of put a flag in the sand to say ‘ours is going to be different.’”

“Different” in this case translates to real fruit purées, less sugar, and a special clarification process that they claim removes some of the residual medicinal taste found in macro hard seltzers. For Fulton Beer, offering hard seltzer was something of a no-brainer. Between customers looking for gluten-free options and drinks to take on outdoor excursions to the nearby lakes, the customer base was already there. The brewery also participates in all sorts of events, where portable, sessionable drinks are in high demand. 

We’ve joked through this process that we’re crafting the hell out of seltzer.”

“Whether it’s a block party or an art fair, if you offer something that's 4% or 5% ABV, it encourages people to hang out longer. Do you really want to be pushing 8% ABV hazy IPAs there?” Gerrick says. “Our hard seltzer still has all the tenets of craft—those dollars are staying local and they’re made by people you might interact within your community.”

The trouble with marketing a higher quality version of hard seltzer is that no one started drinking White Claws for the taste. Like a good old-fashioned vodka soda, hard seltzer’s proponents will generally point to its ability to get you tipsy with comparatively few calories and carbs. The bros who proudly wear shirts saying “Ain’t No Laws When You’re Drinking Claws” aren’t likely to pay more for a craft version.

As a result, instead of trying to compete with White Claw directly, craft brewers are doing everything they can to create a product that will appeal to those who might: the cocktail-drinkers, the gluten-intolerant, and the health-conscious craft beer-lovers who care about taste and supporting small local business. Developing those products, in many cases, has taken months of research. 

“The temptation with a lot of breweries is to say, ‘Hey, I can jump on this craze. I’ll just throw some sugar and water together and ferment it and I’ll be good to go,’” says Zach Taggart, the lab manager at 42 North Brewing Co. in East Aurora, New York. “We thought we could put our own spin on it with New York State ingredients.”

42 North Brewing Co. has plenty of incentive to do so. Last year, at the nearby Borderland Festival, 10 percent of the 28,000 beverages sold were hard seltzer. John Cimperman, the brewery’s founder, expects that number to rise considerably this year. Despite the desire to get a hard seltzer to market, he and the team have refused to rush the painstaking process.

“We tried beer yeast, Champagne yeast, wine yeast—we’ve even tried farmhouse saison-style yeast and they all produce a different character and they all ferment differently,” Taggart says. “For me, it’s a really fun process. We do tastings and take notes on what kind of flavors we’re getting from them.”

Over the course of six months, Taggart experimented with four different base sugars, local fruits, techniques including dry-hopping, and eight different yeasts. After testing dozens of different batches both with staff and in the taproom, he feels like he’s finally honing in on the right flavor profile and mouthfeel. The brewery hopes to officially launch by early next year. 

“If the idea was to make a quick buck, that’s not our style. At this point, we’re not going to beat the big guys to market, so we want to create something interesting,” Taggart says. “We’ve joked through this process that we’re crafting the hell out of seltzer.”

ZX Ventures, a division within AB InBev, is an investor in October
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