Bud Light to launch hard seltzer lemonade as new rivals enter market

Bud Light is releasing a line of hard seltzer lemonades as it looks to stake a firm claim on the increasingly competitive category.

The Anheuser-Busch InBev brand entered the hard seltzer market a year ago as part of a broader push from its parent company. Anheuser-Busch InBev also owns spiked seltzer maker Bon & Viv. With beer consumption declining in recent years, brewers have turned to hard seltzer to boost sales.

Spiked seltzer retail sales surged 160% to $4.1 billion in the 52 weeks ended Dec. 26, according to Nielsen data. The trend started with the popularity of White Claw, which is owned by Mike’s Hard Lemonade brewer Mark Anthony Brands, but new entrants have pushed sales even higher. Coca-Cola is entering the fray this year with Topo Chico Hard Seltzer, its first U.S. alcoholic beverage since 1983, through a partnership with Molson Coors Beverage.

As of 2019, White Claw still holds more than half of the market share for hard seltzer, according to data from Euromonitor International. Truly Spiked & Sparkling, which is owned by Boston Beer, is in second place with 28% share. Bon & Viv trails in a distant third with nearly 10%.

According to Bud Light, the success of its seltzer helped the beer brand grab more market share in 2020 than in the previous five years. Its strong performance coincided with the coronavirus pandemic, which pushed more consumers to drink alcohol at home rather than in bars. Shares of AB InBev, which has a market value of $122 billion, have fallen 13% in the last year after its volume declined by 8.2% during the first nine months of last year.

“As we started to look at all of the different types of seltzers coming in, we started to go in the direction of trying to differentiate a segment of the seltzer category,” said Andy Goeler, Bud Light’s vice president of marketing.

The seltzer first launched with mainstream flavors like Strawberry and Black Cherry, but Bud Light introduced a special “ugly sweater” package with seasonal flavors for eight weeks during the holidays. The themed drink pack sold out, Goeler said.

For its next seltzer innovation, Bud Light landed on lemonade, which has a mass appeal. According to Nielsen data, hard seltzer lemonade saw only $313.97 million in retail sales in the 52 weeks ended Dec. 26. But the segment is growing much faster than that of hard seltzer, thanks to early entrants like Truly’s version. Nielsen data found that retail sales during that period surged over nine times more than the previous year.

Bud Light is trying to beat the competition by improving on taste. The brand conducted blind taste tests for consumers, tweaking the recipe until Bud Light Seltzer Lemonade bested the competition every time.

“This one will have a much bolder lemonade flavor,” Goeler said. “And again, we want to make sure we got the best lemonade as well.”

But the nutritional profile of the seltzer lemonade still falls in line with what consumers look for…