It’s been a couple of months since we checked in with Hop WTR founder Jordan Bass [see CBD 02-20-2023]. But a lot has changed for the leading hopped water with adaptogens since February.
For one, the company is now available in more retailers across 48 states.
They are expanding distribution at an array of retailers across the spectrum, from Target to Wegmans to Kroger to Whole Foods, even to CVS, where the brand is part of a new “mocktail set” across nine states.
The company is actually accelerating its growth trends at retail: Jordan told Beernet Radio they’re actually up about 670% at retail in the last four weeks.
They also have a new flavor with a celebrity backer, and a guerilla marketing campaign for the big beer-drinking season upon us.
We’ll dig in more on those points. But we had to ask Jordan what must be on the minds of at least some BBD readers: Where HOP WTR is in Gold Network houses (as Constellation has a minority stake) that also happen to have A-B, are they seeing a “bump” there? We would assume such wholesalers would be much more reliant on a high-margin product like HOP WTR to help make up the difference for challenged parts of their portfolio (i.e. Bud Light).
Jordan characterized the Bud Light development as “a bit of a Black Swan event” for the industry.
“It’s not something that we’re kind of counting on for building our brand,” he said. “I think the more impactful thing for our brand is, we’re coming up on being three years old, so we’re still relatively new. And these wholesaler partnerships are really important to us, and we’re working hard to develop those relationships and continue to build on those. …
“We’re building this brand for decades to come, and so we’re investing heavily in those partnerships.”
Of course, the trends don’t hurt either. According to Jordan, the hopped water category is up more than 130% year over year. But HOP WTR is up more than 600% for that period. He says that HOP WTR has become the no. 1 share brand in the category*, which has “pretty huge macro trend” drivers. (Per the latest IRI / SPINS data, 12-weeks ending 05/21, total dollar sales across the combined Natural and multi-outlet (MULO) channels.)
“When we look at consumers looking to moderate, we look at health and wellness trends, and we look at this coming demographic shift, we feel like there’s huge tailwinds behind. When you look at this younger generation, they’re moderating even more than Millennials or Gen X or boomers.”
With July 4th around the corner, the brand is capitalizing on that moderation trend with the HOP SPCR. More drinking means more HOP WTR consumption, as 80% of their base also drinks alcohol (they also drink non-alc beer as well).
NEW HOP WTR SPCR CAMPAIGN: “YOU WANT TO STOP A CONSUMER AS THEY’RE SCROLLING THROUGH THEIR FEED.” The company has just launched a HOP WTR “SPCR” campaign, based on a “spacer” device that connects 12 oz. standard cans. Consumers were invited to enter to win the colorful, limited-edition spacers online. But Jordan says they ran out within 10 minutes of launch.
Jordan explains: “you see kids walking around college campuses with empty cans of White Claw taped together. Now you’ll be seeing them walking around with HOP WTR spaced in between their beers, so you can stack six of ’em. We know that 4th of July is one of the biggest drinking occasions of the year, and we wanted to give our consumers an opportunity to moderate and have some Hop WTRs.”
The device and campaign were born of a “core consumer insight”:
“One of the top three usage occasions for hopped water is switching between full-strength alc and non-alc in the same occasion,” says Jordan.
“There’s a great stat out there that 58% of consumers are switching between full-strength alc and non-alc in the same occasion. We wanted to have fun and kind of play off of that.”
The days of the “yearlong campaign and the three education points” are gone, he says. These days, “you want to stop a consumer as they’re scrolling through their feed, right?”
Pressed on the seasonality of HOP WTR, Jordan said it basically follows beer seasonality — but they get that “pop” in January (Dry January), and elevated action for the holidays.
But there’s another lever they’ll use to engage interest this summer. A new flavor, Ruby Red Grapefruit, just went live for pre-order on their website, at $39.99 per 12 pack. A retail rollout will follow. (Note: Though they do have a DTC business, their overall business is now heavily weighted toward traditional retailers.)
“It marks HOP WTR’s seventh permanent SKU joining the current fruity lineup of Classic, Mango, Lime, Blood Orange, Ginger Limeade and Peach,” per official announcement.
Grapefruit was their most-requested flavor. But it was also created in partnership with brand ambassador and Mixed Martial Artist champion Dustin Poirer.
Jordan offered more on the “why” behind the new flavor. He says it’s a “proven flavor in the craft beer space,” and it’s the no. 2 volume driver in sparkling water.
As for how Dustin got involved, that was organic.
“Back in 2021, he was training for a fight in Vegas and he tagged us organically,” said Jordan. “He tried the product and tagged us.” They ended up jumping on the phone with him within days.
“He jumped on live right before his fight, loves the product; drinks it when he is training. And so we decided to partner with him after his fight. And from the very beginning he’d been asking for grapefruit. That was his top flavor request. So after it went through our innovation process, we’re like, okay, he’s a pretty intimidating guy, we didn’t want to go against him,” Jordan joked.
LATEST CGA STUDY FINDS RTDS HAVE RUN ROOM ON-PREMISE
Whereas the off-premise may be king for RTD consumption, the latest CGA research by Client Solutions Director, Americas, Andrew Hummel, shows there’s some run room for the category on-premise.
RTD CONSUMPTION CONSISTENT ON-PREMISE. Data from CGA’s On Premise User Survey (OPUS) shows that 17% of American consumers who visit bars, pubs and restaurants have consumed RTD alcohol in the past three months. And that on-premise consumption has stayed consistent from season-to-season the past two years, where between fall 2021 and the following spring, “consumption sat stable at 18% of all on premise users,” per report. While consumption saw a 2% drop in fall 2022, it bounced back to 17% this past spring.
RTD CONSUMERS ARE YOUNG AND RICH. Those opting to drink RTDs skew young – only 16% of RTD drinkers are above age 55 – and they’re wealthier than the average American household income, making $83,000 a year on average. Consumption isn’t gender specific however, with females (52%) consuming slightly more RTDs than males (48%).
MAJORITY OF RTD CONSUMERS DINE OUT. Most RTD consumers are dining out, CGA data shows, with 75% of all RTD consumers dining out at least once a week and almost half of RTD consumers visiting on-premise venues with the primary intent to consume alcohol.
AND THEY’RE LOOKING FOR A DEAL. As for what’s driving RTD consumption, over one-third of consumers select RTDs based on what they consider to be a good value for money proposition, while 25% of RTD consumers are looking for special offers or discounts, according to CGA.
In terms of selection, consumers are motivated by the variety of flavors offered (28%), reiterating “the importance of having a diverse range of options available to satisfy a broad range of preferences.”
A surprising finding of what’s not driving RTD consumption? Health considerations, which are often cited by suppliers as a top reason they start making RTDs or expand their offerings. “While 20% of individuals may look at the alcohol content, only a minority is concerned with calories,” according to CGA.
RTD BRAND LOYALTY IS STEADY. RTD brand loyalty has remained “relatively stable” over the past two years, with 20% of consumers opting to always choose their favorite brand. But CGA’s OPUS data also shows there’s 18% of consumers actively seeking out new RTD brands.
For those promoting small or newer RTD brands, suppliers should keep in mind that more than half – 56% – of RTD consumers say that quality is paramount. And one-third of consumers choose which RTD to drink based on the type of base alcohol used, according to CGA, with vodka the most popular (70%), followed by tequila, which is selected by over half of RTD consumers.
As for how the RTD category will fare in the future, Andrew says “the popularity of RTDs shows no signs of abating.”
“Insights drawn from CGA’s OPUS research illustrate how manufacturers, suppliers and operators can tap into the potential of RTDs by targeting the appropriate audience and optimizing product offerings” to “fully harness the category’s potential across the American On Premise.”
Until tomorrow,
Harry, Jenn, Jordan, Bianca
“In order to win you must be prepared to lose something. And leave one or two cards showing.” – Van Morrison
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