White Claw - if you haven't had it then you have most likely heard of it. This is the drink that is currently outselling Budweiser (NYSE: BUD). How did White Claw manage such a meteoric rise to the top?
White Claw, whose parent company is the pre-IPO Mark Anthony Brands, is a hard seltzer which means that it is a seltzer spiked with alcohol. White Claw also features various flavors that appeal to a wide range of taste preferences: mango, natural lime, black cherry, ruby grapefruit and raspberry. According to Lara Crystal, CEO of Minibar Delivery, "Hard seltzer is at the intersection of several consumer trends right now, We've observed increasing demand for lower-alcohol products and healthier, natural options, along with a surge in ready-to-drink beverages. [The past] summer has seen them explode in popularity, as they appeal to drinkers that previously would have considered beer, wine or liquor." White Claw holds approximately 50% of market share in sales. The hard seltzer category has tripled since 2016 and is expected to grow by about 300% in 2019.
One of the keys to its success is non-gendered marketing. While wine and beer tend to have gendered stereotypes, White Claw has managed to appeal to both male and female millennials. This is first and foremost evident in its advertisements. Danelle Kosmal, vice president of Nielsen's beverage alcohol practice, commented that hard seltzer is one of the few drinks that has been able to remain gender neutral, " Hard seltzer is one of the most gender-neutral products we have seen across the alcohol industry. In comparison, traditional beer drinkers are two times more likely to be men than women".
White Claw has also been able to market itself as a lifestyle and not just as a summer drink. Bank of America (NYSE: BAC) Merrill Lynch's managing director for the food and drink sector, Bryan Spillane, says that ""It's aspirational. "It's the whole low-carb, keto-friendly, CrossFit life. It's aspirational, in ways that have nothing to do with gender".
White Claw has even been described as "millennial champagne"and "Gen Z's version of Zima". Although forecasts predict sales to fall a bit in cooler weather, this seasonal trend will hit all seltzers similarly. White Claw actually ran out of stock in the United States during the summer months this year as it hit peak popularity. The company will also slash its advertisement spending by 30% to $11.1 million as its popularity continues to surge.