Corona Hard Seltzer maker takes aim at White Claw's dominance
Constellation Brands (STZ) CEO Bill Newlands is banking big on Corona beer drinkers dropping their side pieces White Claw and Truly in 2021 and devoting full attention to their first love.
“We’re going to more than double our capacity next year [for Corona Hard Seltzer],” Newlands told Yahoo Finance’s The First Trade. Constellation will likely add new flavors to help broaden the portfolio of choices. Launched in the spring and underpinned by an aggressive $40 million marketing push, Corona Hard Seltzer has climbed to the fourth largest hard seltzer brand in the United States. It holds a roughly 6% share of the market, according to Constellation’s data.
Newlands said Constellation has sold 5.5 million cases of Corona Hard Seltzer since the pandemic began and forced people to drink at home on Zoom calls.
“We felt Corona was the perfect brand to get into the seltzer space. It matches up entirely with what Corona’s brand essence is and what people were looking for, that being refreshment, good taste, no carbs — and it has played out very well,” Newlands added.
Despite the success with Corona Hard Seltzer (which has lifted Constellation’s overall beer segment sales as it proves to be an accretive business), the brand still trails the aforementioned industry titans. First movers White Claw and Boston Beer owned Truly have a commanding 75% market share of the U.S. hard seltzer market, per Nielsen data. But the size of the hard seltzer market has grown so large as consumers seek out low carb alcohol options, there is room for relative newcomers like Constellation to carve out a nice chunk of business.
Hard seltzer sales have surged 199.7% to $3.6 billion for the 52-weeks ended Sept. 19, according to the latest data from Nielsen. To further grab a toehold in the market, Constellation recently took a stake in upstart premium hard seltzer brand Press.
To be sure, others in the alcohol industry aren’t sitting idle during the hard seltzer craze. Corona, White Claw and Truly will have some formidable rivals arrive to market in early 2021.
Coca-Cola has teamed up with Molson Coors for a national launch early next year of Topo Chico Hard Seltzer. January 2021 will bring the launch of Michelob Ultra Seltzer out of Anheuser Busch.
“The [Topo Chico] brand will seek to leverage its appeal with Hispanic consumers to recruit them into the category where they currently under-index. While the Corona brand has strong credentials among Hispanics as well, it has not yet successfully expanded within that consumer base,” warned Guggenheim’s beverage analyst Laurent Grandet in a report on Constellation Brands. Meanwhile, the analyst thinks the Michelob Ultra offering will compete with Corona on the higher price point part of the spectrum.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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