What s up guys! It s Jason here and welcome to my YouTube channel, Happy Hour Insight.
Envision your stereotypical millennials dressed fashionably in Lululemon or J. Crew. They
might work professional jobs and attend your local barre class and shop almost exclusively
at Whole Foods or Trader Joe s or any other shop filled with organic and free trade labels.
When those millennials want to unwind after typing the day away, there s a good chance
they will choose the hard seltzer that s spawned memes, disdain, and a lot of money for its
manufacturer, the Mark Anthony Brands International --- you guessed it, White Claw.
You may not remember the name, but you ve likely seen the slim can, typically 16 oz
with White Claw in bold Futura-like font and hard seltzer incorporated into its logo. White
Claw comes in flavors ranging from the tropical like mango and pineapple to the more classic
flavors of lemon and natural lime. In fact, you might even see the White Claw Hard Seltzer
Iced Tea, as well. Either way, you ve probably been seeing White Claw more and more often,
not only at hipster venues, but 7/11 as well. So what happened to White Claw? How did White
Claw get so big? How has hard seltzer become almost synonymous with White Claw? Today we
ll answer those questions and many more.
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us continue on with what is going on with White Claw.
The Rise of Hard Seltzer for the Health-Conscious
To understand the rise of White Claw, we first need to understand what hard seltzer is. Fundamentally,
it s a drink that is often marketed as the healthy alcoholic beverage of choice because
it has less calories and alcohol than beer and is typically fruit-flavored, much like
seltzer waters. In fact, hard seltzer is essentially sparkling water with fruit essence, which
is then made alcoholic once either malted barley or fermented sugar cane is added. In
terms of alcohol content, hard seltzers usually have 5-6% ABV or alcohol by volume, surprisingly
similar to beer s ABV range of 4-7%. The key to the marketing of hard seltzer as the healthier
option is that it often has a lower ABV than non-canned mixed drinks. Hard seltzer has
been around since roughly 2013, when the original hard seltzer called SpikedSeltzer hit the
shelves and almost immediately gave way to countless competitors.
Since SpikedSeltzer, now known as Bon & Viv Spiked Seltzer, a Nielsen survey has shown
that year-over-year, hard seltzer sales have spiked 193%. Wow! That s HUGE! Surveyed consumers
listed hard seltzers as being attractive primarily because they re canned, ready to consume on-the-go
and their relative healthiness. The founder of White Claw, Canadian Anthony von Mandl,
is actually a long-time veteran in the wine and spirits industry and decided to delve
into the world of hard seltzer after he saw an opportunity to expand his line-up of ready-to-drink
beverages such as Mike s Hard Lemonade, a flavored malt beverage of natural flavors
and carbonated water.
White Claw s Background & Beginnings
Anthony von Mandl s company is Mark Anthony Wine & Spirits. In 2016, he launched White
Claw as a natural extension of Mike s Hard Lemonade, famous for its sweet taste. Von
Mandl already had a massive success with Mike s Hard Lemonade as it sold 2 million cases
in its first year in the US in 1999. In its home country of Canada, when it was introduced
in 1996, shortages of the hard lemonade sparked fights in liquor stores. Even two decades
from its introduction, it still does about $1.6 billion in sales. In a 2006 interview,
von Mandl made a key observation about an opportunity in the alcohol market because,
25% of guys didn t particularly want to drink beer, but couldn t be seen holding anything
else in their hand. As an entrepreneur, von Mandl offered a cool alternative to beer through
Mike s Hard Lemonade. On the same premise of having more options than Corona and Budweiser,
after the release of Connecticut-made Spiked Seltzer, von Mandl introduced White Claws
sans the sweetness of Mike s Hard Lemonade and with fewer calories to appeal especially
to female drinkers as well. Danelle Kosmal, the vice president of Nielsen s alcohol division
confirmed as much by stating, Hard seltzer drinkers tend to be younger, have higher incomes
and skew more female than traditional beer drinkers. With the popularity of White Claws,
it s as if von Mandl not only tapped into that desire for a healthier alternative, but
also strengthened that desire among millennials. For cold hard numbers, in 2018 White Claw
did $154.8 million in sales of Mark Anthony Wine & Spirits total $746 million in sales.
The next year, White Claw sales quadrupled to $627.2 million, while Mark Anthony Wine
& Spirits sales totaled $1.3 billion. Since its debut in 2016, White Claw has also slowly
and steadily increased its hard seltzer market share in the USA. While Bon & Viv Spiked Seltzer
claims to be the first hard seltzer to hit the American market, in 2016 it had 17% market
share in comparison to White Claw s 37%. By 2017, White Claw s market share was 40% in
comparison to Bon & Viv Spiked Seltzer s 15%. In 2018, White Claw s market share continued
to grow at 46% to Bon & Viv Spiked Seltzer s 13%, with White Claw dominating at 58% in
2019 and Bon & Viv Sparked Seltzer having dropped to 6%. The lesson of the story in
this case? Being first-to-market doesn t guarantee having consumers who are loyal to your brand.
Rather, continuing being innovative and releasing new products with strong branding seems to
pay off. For instance, in March 2020, the company introduced three flavors in addition
to its six, as well as offering customers a 12 can variety pack to showcase the range
of flavors. It was a smart move as Nielsen reports that variety packs are hard seltzer
bestsellers, regardless of the specific brand. They account for about 63% of hard seltzer
sales. So what s the most popular White Claw Seltzer? That s definitely Mango!
Marketing & Audience White Claw s market presence also translated
into pop culture, with the brand serving as inspiration for YouTuber Trevor Wallace to
comically mock the brand s appeal to finance and tech bros and aspiring finance and tech
bros. Having been viewed about 5.8 million times since its 2019 posting, the video has
spawned countless memes that allude to White Claw s cult following among upper-class millennials
who probably pride themselves on wearing allbirds shoes and loving avocado toast. Wallace s
declaration that there, ain t no laws when you re drinking claws is probably synonymous
with the brand among social media-obsessed millennials.
Unlike many of its other competitors, part of White Claw s appeal may be its millennial
and health-conscious marketing, which isn t woman-focused. Traditional alcohol marketing
historically has shown manly men drinking beer and feminine women drinking wine and
more recently, sangria and rose. Even White Claw s predecessor, Bon & Viv has relied on
more feminine-appealing mermaids on its cans to target female drinkers. In comparison,
the gender-neutral marketing of White Claw has instead focused on its health appeal and
as being part of an active lifestyle maintained by fit men and women. Their video ads say
it all: lean guys and girls jumping off a sailboat to enjoy the refreshing ocean, comparable
to the refreshing and low carb, 100 calorie taste of a can of White Claw. In case anyone
thinks that the gender-neutral marketing was anything but intentional, their VP for marketing
emphasized that since its launch in 2016, the marketing focused on group hang-outs common
among millennials. Sanjiv Gajiwala, VP of Marketing, described White claw ads as being
true-to-life since, it wasn t a world where guys got together in a basement and drank
beer and women were off doing something else, drinking with their girlfriends. It makes
perfect sense because a Bank of America survey confirmed that hard seltzer drinkers are split
pretty much 50-50 among women and men, while traditional beer drinkers are actually more
than two times more likely to be men than women. Either way, hard seltzer is catching
up quickly to its competitors given that it already accounts for 5% of the beer market.
Just as important as its own marketing, White Claw really took off because of its social
media appeal. In 2019, the hashtag #whiteclawsummer was trending. It almost always entailed a
by the pool selfie, or a selfie on a sailboat, or other scenic backdrop that screamed upper
middle class, YOLO-embracing millennial. White Claw s social media, word-of-mouth branding
also played into the millennial obsession with Instagram and giving the impression of
leading a healthy and fun lifestyle that smells of money.
That social media, organic buzz allowed White Claw to not really dedicate resources to its
paid social until this year. The company even reportedly pulled back its advertising spending
by as much as 30% with the rise of user-generated content that promoted a White Claw lifestyle.
According to white Claw, fans content led to more than 4 billion brand impressions and
boasts 46x more social media mentions than its hard seltzer competitors. In addition,
during the same period that White Claw cut down its spending, ad spending for other hard
seltzer brands increased by about 21%. White Claw only ranked No. 3 behind its two lesser-known
and less profitable competitors, Corona Refresca and Angry Orchard.
White Claw s Impact & Future White Claw s undeniable success has made small
artisanal brewers and industry giants alike realize the potential of hard seltzer and
the money to be made. If we want to be more precise, in 2019, the global hard seltzer
market is valued at around $4.4 billion, while in 2027 it's expected to be worth around $14.5
billion. AB InBev, for instance, significantly promoted its hard seltzers during the last
Super Bowl, which is an important development for ad spots typically reserved for hearty
beers. Molson Coors also launched its own hard seltzer, Coors Seltzer around the same
time as the Super Bowl ad, attempting to craft a niche audience around its environmentalism.
It should be expected considering that White Claw, in 2019, claims it outsold Budweiser.
With many competitors hot on White Claw s heels, the company is investing approximately
$250 million in production facilities in Arizona and another $385 million into facilities in
New Jersey. The main objective is to prevent shortages, keeping up with growing demand
for White Claw since its VP of marketing claims that its own data shows once a consumer buys
a can of its seltzer, one in three people will buy it again. Such data likely played
a factor in White Claw s expansion into the UK, Netherlands, Ireland, and Germany. Its
success was not limited to the US as it also holds the title of being the best-selling
hard seltzer in the UK, Netherlands, and Ireland, while about one million cans sold in its first
week in Australia after first launching in the fall of 2020.
White Claw also seeks to double-down on its core audience of 21-29 year olds who drink
socially. The company is also preparing 18 and 24 packs and has released a harder hard
seltzer called White Claw Surge with 8% alcohol. Appealing to more hardcore drinkers among
its audience, the stronger beverage nonetheless prominently advertises that it s made pure
and gluten free. Possibly in a nod to its founder s early success with Mike s Lemonade,
White Claw has released a Hard Seltzer Iced Tea that essentially mixes sustainably sourced
tea with hard seltzer. As White Claw advertising has started to ramp up as vaccination rates
across the world are likewise ramping up. It s setting the stage for the company to
be prepared to enter bars and venues in a big way.
And that brings us to today. With White Claw the most popular hard seltzer in 35 of 50
surveyed states, especially on the East and West coasts, it s safe to say that White Claw
and the hard seltzer industry is here to stay. Fascinatingly, White Claw is also the most
Googled hard seltzer brand in the United States. What does this all add up to? It s a sign
that the hard seltzer industry cannot be dismissed as the next big fad, comparable to Zima, a
one-hit wonder lightly carbonated drink that was discontinued in 2008 with limited releases
only in 2017 and 2018. Just as importantly, it s a sign that the growth of White Claw
will only strengthen the hard seltzer industry. While it has the advantages of being the dominant
player in the industry, if it doesn t want to become a Zima, it will have to prove itself
again and again with finicky millennials and beyond.
So with that said, thank you so much for watching my video. There was a significant amount of
research and production that went into making this video possible. As this is a brand-new
YouTube channel I just started this year - if you enjoy videos like this, please click the
subscribe button and hit that notification bell! I respond to all comments! If you haven
t seen already, check out my video on the Rise of Coinbase or the Rise and Fall of American
Education. As always, stay happy and healthy and stay tuned for another episode of Company
Insight next week.