So when you are hot or thirsty, what do you like to drink? The answer to that question can be any one of a large number of different types of beverages: water, soda, juice, beer, etc. However, somewhat surprisingly the more and more answer is turning out to be seltzer – sparkling water. Consumer’s desire for this beverage is causing seltzer product managers to scramble to meet the needs of their customers.
Why Has Seltzer Become So Popular?
The reason that more and more consumers are seeking out sparkling water when they want something to drink has to do with the fizz. This beverage feels like they are having a treat, but it does not come with any of the downsides that other carbonated beverages have. Seltzer is what consumers are selecting when they want to cut down on the amount of sugar that they are consuming.
It turns out that the seltzer product managers have really been doing their job. Sales of sparking waters are rocketing up in the U.S. The increase is attributed to consumers who are walking away from soda and who are now drinking sparkling water. The result of this new interest in seltzer has been that product managers have been busy changing their product development definition in order to come up with new versions of sparking water to offer to their new-found customers. These new variants include caffeinated drinks, alcoholic drinks, sparkling coconut water, and even sparking coffee. On the horizon is a seltzer that has cannabis included in it.
The market for sparking water is huge. This year Americans are forecasted to buy 21M gallons of seltzer. What they will be buying will include imported sparking water such as S. Pellegrino along with domestic brands such as La Croix. This is three times as much seltzer as people were buying only 10 years ago. All of this looks good on a product manager resume. U.S. sales of nonalcoholic sparkling water, seltzer, and club soda was US$2.7B in the past year. Fruit juice sales were only $2.5B in the same year.
What Is Next For Seltzer?
The product managers at the big drink companies have seen their customers start to shift towards drinking sparkling water and so they have started to take action. Coca-Cola has purchased a company called Topo Chico. This firm creates a seltzer that is bottled in Mexico. The product has developed a cult following down the road in Texas. At the same time the Coke product managers have been busy creating sparkling water versions of their two existing water products: Dasani and smartwater. Meanwhile over at Pepsi, their product managers are launching a flavored seltzer brand that they are planning on calling Bubly.
Pepsi has also announced that they will be purchasing the company SodaStream International who has created a home-based countertop seltzer machine. The current leader in this market is the multiflavored LaCroix brand which is made by National Beverage Corp. This product currently owns 19% of sparkling water and seltzer sales.
An untapped portion of the market that product managers are only now starting to take a closer look at is the market for hard seltzer. Currently, sales of hard seltzer are small; however, they are growing rapidly. As hard seltzer grows, it is stealing market share from beer. Sales of alcoholic sparkling water last year totaled $295M. The previous year it had been $116M. Just two years prior to that it had been $11M. Hard seltzer currently represents roughly 10% of all flavored malt beverages being sold in the U.S. The beer maker Sam Adams attributes the success of its Spiked & Sparkling hard-seltzer brand with helping the company to reverse a two year sales slump.
What All Of This Means For You
In the past, when people got thirsty, they had a specific set of beverages that they could reach for. This is a closed group and it can be very hard for product managers to find a way to break into this club. However, somehow it has happened. Now more and more people are starting to reach for a seltzer when they want something to drink, not a soda or a beer. Product managers need to take a look at their product manager job description and figure out what their next step needs to be…
Consumers are starting to look for drinks that come with a fizz. When a customer wants to reduce the amount of sugar that they are consuming, reaching for a sparkling water can seem like a good idea. Sales of seltzer have been increasing and so product managers are busy trying to create new flavors of seltzer. Customers are purchasing a great deal of sparking water and are even buying more of it than they are buying fruit juices. Product managers at the big beverage companies have noticed what is going on. Coke has made purchases to get into the space and Pepsi has done the same thing. The next big thing is going to be hard seltzer.
Changes don’t come that often to the beverage market. However, we appear to be in the middle of a significant change that has come along as a surprise. The arrival of seltzer as a new beverage option has the new product managers scrambling to find the tastes that will allow them to retain the customers that they have and attract new ones. The product managers at the established beverage companies have seen what is going on and are working hard to introduce sparkling water versions of their popular beverages. We’re going to have to keep our eyes on this market and see if it really is a new taste or just a try-it-and-forget-it marketing move.
Question For You: What would be the best way to find out if customers would be interested in a seltzer version of an established product?Click here to get automatic updates when The Accidental Product Manager Blog is updated. P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!