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Minnesota breweries are coming to disrupt the $500 million hard seltzer market

Lift Bridge co-founder Brad Glynn noticed his brewers bringing White Claw to company parties. Fast forward a little, and the brewery has its own line.

Lift Bridge co-founder Brad Glynn noticed his brewers bringing White Claw to company parties. Fast forward a little, and the brewery has its own line. Jerard Fagerberg

When White Claw Hard Seltzer launched in the summer of 2016, sales of spiked seltzer in America quadrupled. Last year, they reached upward of $500 million, which is why you saw Bon & Viv’s bumping against Bud Light in Super Bowl ad slots. The refreshing, low-sugar beverage now represents 10 percent of all domestic booze sales.

Seltzer has outpaced both hard cider and hard soda, and its booming popularity is a nuclear threat to craft beer’s hard-fought market share. Boston Beer Company, maker of Sam Adams, went on the offensive in 2016, launching its Truly Spiked & Sparkling brand. Constellation Brands—which owns Ballast Point, Funky Buddha, and Corona, among others—came out with its own Svedka-branded hard seltzer in mid-2018. Next year, North Carolina stalwart Oskar Blues will join the fray with the Wild Basin imprint.

Instead of Chicken Little-ing or writing seltzer’s growth off as a fad, Minnesota beermakers see possibility. Inspired by White Claw and Sam Adams, they’re looking at the hard-seltzer gold rush with big, Looney Tunes eyes.

“Seltzers really have taken the industry by storm,” says Brad Glynn, co-owner and co-founder of Stillwater’s Lift Bridge Brewing Company. Glynn noticed his brewers bringing cases of White Claw to company parties, and it wasn’t long until he and his team decided to see if they could steal some market share. In late January, they launched their own line of hard seltzers.

“I know there are big corporations doing them, but how would it look if there was a craft brewery doing it here?” Glynn asks. “There’s certainly a market for it. Of course, we don’t have the marketing dollars of the bigger brands, but we can start here, locally, and tell our story like we did with beer.”

Lift Bridge Brewing Company

Lift Bridge Brewing Company

Cold Spring’s Third Street Brewhouse was the first local brewery to hop on the seltzer wagon. It launched its Hula portfolio with three island-inspired flavors (Mango Papaya, Pineapple Guava, and Starfruit Dragon Fruit) in July 2017. “Everywhere you look, you’ll see a new spiked seltzer entering the market,” Third Street brewhouse manager Karl Schmitz said in a press release at the time.

But nearly two years in, the local market is thirsty for more. Glynn sees his opportunity in bringing the flavors back to the Midwest. Lift Bridge’s flagship is called Northwoods Juice Box, a crisp combination of cranberry and sweet apple that’s sure to delight anyone who grew up on cran-apple La Croix. It’s already on tap in the Twin Cities, and it will soon be joined by three more regionally inspired varieties: St. Croix Berries, Voyageur Citrus, and Island Time Tropical Blend. Glynn estimates 6- and 12-packs of cans will be in liquor stores by early April for anyone who wants to double down on local appeal.

“With our beers, we think about our customers, we think about what we would drink, what’s quintessential to Minnesota and Wisconsin,” Glynn says. “We spent a lot of time thinking about the different [seltzer] brands that are out there and analyzing what was selling and what wasn’t. No one had done a cran-apple, which I thought was crazy.”

Bauhaus Brew Labs COO and head brewer Matt Schwandt agrees that hyperfocusing on local is the future of the beverage. “It’s analogous to what craft beer started out doing in its infancy, challenging the big brands,” Schwandt says. “Given the choice between a mass-produced national brand and a high-quality local brand, 9 times outta 10, they support the local brand. It’s the same opportunity here.”

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But it goes deeper than that. Drinkers are coming to hard seltzer for the lightness. Craft stouts and IPAs can range from 200 to 350 calories per beer, and imbibing that much malted sugar leaves drinkers feeling bloated. Eventually, they’ll reach for something like a Lift Bridge seltzer—a low-sugar, gluten-free drink with only 120 calories—just to endure the evening.

“What we’re seeing in market research is consumers are looking for lighter, slightly healthier beverage options,” Schwandt says. “A hard seltzer fits the bill. They’re generally lower ABV and lower sugar drinks, and breweries are really well-suited to provide that.”

Bauhaus found themselves in the seltzer game by accident, but they were after the same holy grail as overstuffed drinkers. While creating the nonalcoholic version of their ultra-drinkable Homeguys Helles Lager, they ended up with an ethanalyzed water byproduct. With a little creativity and some lime flavoring, it became the first in their line of seltzers.

Bauhaus’s lime seltzer is currently a taproom exclusive, and there are plans to roll out more flavors and potentially cans this summer, but the Northeast brewer is taking a cautious approach. The market is still stabilizing, and there’s no guarantee Bauhaus will be able to maintain the quality of the product at a high volume.

To Schwandt’s point, Third Street is the only local brewer to achieve any kind of scale in the market, and Hula is poorly regarded among drinkers for its cut-rate chemical taste. Customers have spoken out on Untappd: Hula’s three flavors carry an average rating of 2.96, compared to White Claw’s average of 3.36. Third Street’s marketing department did not respond to questions on the brand’s performance by press time.

But ultimately, the market opportunities outweigh the risks. That $500 million figure is far from hard seltzer’s ceiling. The product’s appeal is wider than that of beers, especially with women. Seventy percent of hard seltzer drinkers are female, compared to 31.5 percent of craft beer drinkers. That’s a bear of a market for craft brewers to grow into. It’s not a question of whether or not beermakers should expand into seltzer. It’s a matter of how willing they are to pounce.

“By all indicators, [seltzer is] a trend that has some staying power,” Schwandt says. “Everybody wants what’s new, and the more that you can offer consumers that’s new and exciting and different, the better. If we’re already set up to produce that, why not?”