What The Fizz?!?! Is Hard Seltzer Worth The Hype

Like many people, when I first saw hard seltzer in the grocery store, I thought it was a blip, like frozen yogurt. But after attending a few seminars at this year’s virtual Craft Brewers Conference, I decided to sit up and pay more attention.

According to Business Insider, the hard seltzer market is currently worth $550 million and could grow to be a $2.5 billion beverage category by 2021. Sales of hard seltzer are projected to grow by 270% in 2020. What’s even more interesting is the category is converting beer, wine, and vodka consumers. Currently, the big player in this space is White Claw.

So who is positioned to break into this market? Answer: breweries. Legally, hard seltzer is classified as an IRC/FDA beer, i.e., internal revenue code beer. That puts it in a similar category by the TTB as sake and non-barley beverages. Notably, it is not regulated by the FAA, but it is taxed as beer. The FDA controls labeling requirements, hence why you may have noticed nutritional facts on the packaging. Hard seltzer labels also do not require COLA approval.

I had the opportunity to speak with Tennessee Alcoholic Beverage Commission Executive Director Russell Thomas and Metro Nashville Beer Board Executive Director Benton McDonough. Both agreed that while they have yet to encounter hard seltzer, its low alcohol content would put it in the local beer board’s jurisdiction.

Currently, Mill Creek Brewery is the only brewery that has decided to break into the hard seltzer market in Tennessee. But given the numbers, I think it something other breweries should consider pursuing. If your brewery has a taproom that offers a full food menu and full bar, developing your own brand of hard seltzer could be an additional differentiator to attract new patrons to your brewery.

If you are interested in adding hard seltzer to your beverage portfolio but want help with the legal, give Schaffer Law Firm a call at (615) 712-6394

 

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