Smirnoff Gunning For a Top 3 Hard Seltzer Spot

Dear Client:

It’s a seltzer theme for today’s issue. Get used to it: Boston Beer reports this afternoon, and you can bet their stock is depending a lot on trends for Truly Hard Seltzer, the second largest hard seltzer (behind White Claw).  We’ll bring you the deets when that hits.

But we’re not talking Truly right now.

No: Smirnoff, long a juggernaut in the regular FMB category, is gunning to reach the no. 3 hard seltzer position this summer with its Smirnoff Spiked Sparkling Seltzer product. It’s currently the fourth largest player behind Mark Anthony’s White Claw, Boston’s Truly, and A-B’s Bon & Viv.

“We definitely see a path to the no. 3 spot,” said Diageo USA’s director of FMBs, Krista Kiisk, who got on the horn with BBD this week to tell us all about it.

How will they leapfrog their competitors? They’re launching a giant media campaign, complete with TV spots that launch this week, dedicated to hammering home their point of differentiation: 0 grams sugar. (The top two brands have 1-2 grams sugar.)

It’s about to be another summer of seltzer. Even ahead of their giant media push in advance, says Krista, “just looking at this month, first two weeks, we’re up over 250%.

“Our distribution is double what it was a year ago.”

Why was there so much left on the table? They initially saw retailers “feeling out” the hard seltzer segment. The maker of Smirnoff FMBs knows that category can be dynamic, and go through phases. So by the time they decided to jump in on seltzer, they were about four months behind the competition. (Constellation might say a similar thing.)

“They’d already kinda gotten distribution ahead of us,” Krista said of competitors. “So we’ve been making up that gap,” and making progress as “retailers are getting on board and expanding shelf sets.”

Though they’re still in the no. 4 position going into summer, Krista says, but with their media plans ” I have the utmost confidence we’re going to change that [position] for summer.”

They’re “putting more behind this brand than ever,” she said, including a spending level tantamount to that of launching Smirnoff Ice.   

The brand will get (among other media impressions) 15 weeks of TV media, on popular cable channels like Bravo, FX, USA and more. The TV media is poised to “hit 3 out of 4 adults this summer several times across course of summer.”

Check out the summer-y spots here and here.  

Another thing they have going for them, according to Krista, is their flavors.

They’ve got a new rose variety pack that’s just hitting, as well as a Pina Colada flavor. Both have tested well with consumers.

It’s a very variety driven segment. Still, they do have a flagship:

“I’d say our largest flavor is cranberry lime,” said Krista.

But the fastest growing flavor is rose. “Once that hit the market last summer, we saw big step change in our business, and that’s why we’re bringing out the “Four Ways to Rose” pack.” That package hits now and includes three new Rose flavors besides their existing  Raspberry Rose:Pink Apple Rose, White Peach Rose and Strawberry Rose.

LATEST WHITE CLAW STATS: STILL UP TRIPLE DIGITS IN IRI, PLUS GROWING ON PREMISE

We couldn’t do a seltzer issue without talking about White Claw. Mike’s Hard Lemonade president Phil Rosse updated us on the latest. Some quick stats:

Per IRI data for the 4 weeks ended April 14, in total US multi-outlet and convenience:

  • Hard seltzer category share of total beer dollar sales is now 2.1 —  a full point larger than cider
  • White Claw share of total hard seltzer dollar sales is 54.1
  • White Claw Share of total beer dollar sales is 1.1
  • White Claw dollar sales are up 350% vs year ago
  • White Claw has 9 of the top selling 14 hard seltzer SKUs based on dollar sales

And they still have levers to pull. We asked about on premise.

“12% of our White Claw Hard Seltzer volume in 2019 is now coming from on premise and our distribution has tripled in that channel since the fall of 2018,” Phil said.

And their new innovation, Pure — their alternative to vodka and soda — “is just beginning to hit retail now,” Phil said. Stay tuned.

BEATBOX ROLLING A HARD SELTZER, TOO

There is certainly no shortage of entrants in the hard seltzer category.

You may have heard of BeatBox, the trendy and “portable party punch” (which was cool enough for Mark Cuban to invest after founders went on Shark Tank). Guess what the BeatBox founders are rolling now? A new seltzer line.

BeatBox president Mark King (who you may remember as the former chief of Austin Eastciders, or before that, from his Gambrinus days) gave BBD the scoop.

“Brizzy” will hit the market in June with variety 6-packs, including Mixed Berry Mojito, Strawberry Rose, and Watermelon Mule.  

“We are aiming for the cocktail drinker, and decided against slim cans to run against the grain here and aim to appeal to males as well as females as the category becomes more mainstream,” Mark told BBD. “We are certainly aiming to provide the benefits of seltzer – refreshment, low calorie – low sugar – low-carb, but at the same time, offer unique cocktail-inspired flavors.  We want to look and taste different – and appeal to more consumer occasions.”

BEER BRIEFS:

RNDC LAUNCHES DIGITAL PLATFORM WITH LIBDIB. Yesterday, wine and spirits distrib giant, Republic National Distributing Co., announced the launch of a new digital platform, called eRNDC, developed in partnership with online distribution platform Liberation Distribution (LibDib). The wholesaler has launched eRNDC’s customer experience capabilities in Georgia and will roll out to other states in the coming months.

WHATZIT DO? Well, it allows customers to access an online shopping and ordering experience as well as account information and sales team support.  A supplier experience will also be coming soon, which will provide a centralized port for product portfolio management, reporting analytics and more, per a release.The new platform also offers a digital product calendar, providing digital assets and marketing content from suppliers directly to buyers.

FORMER AB INBEV MARKETING CHIEF, MIGUEL PATRICIO, NEW KRAFT HEINZ CEO. Miguel will assume the chief role at Kraft Heinz on July 1, replacing Bernardo Hees, who has been CEO since the Kraft Heinz merger in 2015. As CNBC pointed out, “with the departure of Hees, one of the companies most closely associated with investment firm 3G Capital will no longer be run by a 3G partner.” We wrote back in February [see BBD 02-25-2019] about the company’s tough time of it, due in no small part to a ruthless cost-cutting mantra (3G’s specialty). The company also announced a $15.4 billion write down to Oscar Mayer and Kraft cheese brands in February. Putting a marketing guy in charge seems to be a shift in strategy from bankers who previously seemingly didn’t value marketing.

Until tomorrow,

Harry, Jenn, and Jordan

“An escalator can never break: it can only become stairs. You should never see an Escalator Temporarily Out Of Order sign, just Escalator Temporarily Stairs. Sorry for the convenience.”  -Mitch Hedberg

———- Sell Day Calendar ———-

Today’s Sell Day: 17Smirnoff Gunning For a Top 3 Hard Seltzer Spot

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