Anheuser-Busch Invests $100 Million into Fast-Growing Seltzer Market

Anheuser-Busch, the largest brewing company in the United States, announced it will be launching a Bud Light Selzter early next year as well as investing $100 million into the hard seltzer beverage market, according to CNBC.

The Bud Light Seltzer will come in four fruit flavors  Black Cherry, Lemon Lime, Strawberry and Mango and will contain 5 percent alcohol, 100 calories, 2 grams of carbs and less than 1 gram of sugar.

Anheuser-Busch has claimed its spot as the king of beer for decades, owning nearly 41 percent of the $119 billion dollar US beer market. Despite the franchise’s economic clout, the rise in ready-to-drink cocktails, spritz, and seltzer has shifted American dollars elsewhere.

Seltzers and the ready-to-drink cocktail market have brought a whole new element of convenience to Millennials and Generation Z who can now enjoy some of their favorite cocktails in a can at low cost, and without tipping the bartender.

In addition, an increase in kombucha and other fermented beverages has also fueled further attraction from young adults to fruit-flavored fizzy beverages.

One of those beverages is hard seltzer, which is carbonated water with added alcohol. It usually contains fermented sugarcane mixed with an assortment of fruit flavors. Malted barley has also been a popular ingredient, and is what White Claw, the biggest brand in the Selzter market, uses as a key ingredient in its popular beverage line.

This summer, hard seltzer sales skyrocketed, growing around 164 percent in the last four weeks of July, and roughly 200 percent over the last year, Nielsen Data states.

The spike in hard seltzer sales was so significant the category even managed to positively impact the beer markets by 3.5 percent.

According to Market Insider this new beverage trend isn’t expected to slow down anytime soon. The stock market site claims the now $500 million dollar industry is anticipated to be worth $2.5 billion dollars by 2021 with an annual growth rate of 66 percent.

With these statistics in mind, it is no wonder Anheuser-Busch is converting some of their most well-known brands like Budweiser into a flavored malt beverage. This will be the company’s third venture into the selzter segment next to its Natural Light Seltzer and Bon & Viv.

As Boomers and Millennials grow older, and the Generation Z demographic weighs heavy on the consumer forefront, it will be interesting to see how beer makers adapt their products.

For now, the CEO of Anheuser-Busch, Michel Doukeris, tells CNBC finding a balance between maintaining customer loyalty with the older demographic while working to innovate enough to attract younger consumers will be a future battle the company is ready to take on.

“The market is ever-changing; consumers are always evolving,” he said. “Change is an unbelievable opportunity for companies that embrace it. If we continue to take care of our own brands and add an innovation capability, where we understand what consumers want, then we can have the best of two worlds. It’s not a choice between established brands and innovation. The combination will make the company stronger.”