In MGM’s feature film “The Wizard of Oz,” the munchkins guided Dorothy to “follow the yellow brick road” to get her to the Wizard in hopes of returning home. For the U.S. beer market, one could instruct consumers to follow flavored malt beverages (FMBs) to see where the future of beer is heading. Indeed, the market showed to be a driving force as it posted dollar sales of $3.9 billion, a 43.1 percent increase, for the 52 weeks ending Dec. 29, 2019, in total U.S. multi-outlets with convenience, according to Chicago-based Information Resources Inc. (IRI).

An on-trend segment within the overall beer market, FMBs have served as an innovation hub for the category over the years. However, recent consumer trends have helped elevate the segment’s status.

“FMBs are part of a bigger universe of alternative beverage alcohol products,” says Brian Sudano, managing partner at New York-based Beverage Marketing Corporation (BMC). “These are products that are not traditional beer, wine or spirits products. In wine and spirits, they are single-serve RTDs, most contain flavors. The malt portion this year has been driven by hard seltzer. Historically, these categories have been trendy with one offering, e.g., hard soda, then moving to another hard segment, e.g., Ritas. Since 1978, this segment has grown and today it represents the equivalent of nearly 350 million 288-ounce cases.”

As Sudano noted, much of the growth within FMBs has come from hard seltzers. According to New York-based Nielsen, off-premise sales for the 52 weeks ending Dec. 28, 2019, reported that hard seltzers accounted for more than $1.5 billion sales, a 212.6 percent increase.

The sub-segment’s reduced calorie count and lack of color in the liquid has helped differentiate hard seltzers from other FMBs, BMC’s Sudano explains.

Within the hard seltzer market, the White Claw Hard Seltzer brand family, a brand of Chicago-based Mark Anthony Brewing Inc., and the Truly brand family, a brand of Boston-based The Boston Beer Co., accounted for the largest share. According to IRI data, White Claw sales were $833.6 million, while Truly sales were $368.8 million for the 52 weeks ending Dec. 29, 2019.

Recognizing the potential of the hard seltzer market, St. Louis-based Anheuser-Busch has been developing new products for the market. In the summer of 2019, its Natural Light brand released Natural Light Seltzer, a flavor-forward, 6 percent alcohol-by-volume beverage that is available in two blends of fruit flavors: Aloha Beaches and Catalina Lime Mixer.

At the start of 2020, Anheuser-Busch’s Bud Light brand also entered the market with Bud Light Seltzer, which features a five-step filtration process to delivers a clean finish with no lingering aftertaste, the company says.

Although entrepreneurial brands also are recognizing the potential of the hard seltzer market, these brands are looking to differentiate through their flavor lineup. For example, Austin, Texas-based Future Proof developed Brizzy Seltzer Cocktails, which are available in four cocktail-inspired flavors: Watermelon Mule, Strawberry Rosé, Mixed Berry Mojito and Blood Orange Mimosa.

What’s next

When it comes to FMBs, beverage-makers are always looking to stay on top of the latest trends.

“Follow trends in liquid refreshment beverages and FMBs will likely follow,” BMC’s Sudano says. “Anything from hard teas/coffees to protein beverages is possible.”

More established than other emerging FMB sub-segments, the hard tea market increased 13.1 percent, totaling $435 million, for the 52 weeks ending Dec. 28, 2019, according to Nielsen data.

The Boston Beer Co.’s Twisted brand family accounted for a major share of this market with sales reaching $381.9 million for the 52 weeks ending Dec. 29, 2019, according IRI data. However, the craft brewer is looking to expand its beyond business with Wild Leaf Craft Hard Tea. Available in two flavors — Black Tea with Lemon & Honeysuckle and Green Tea with Apple & Honey — Wild Leaf is brewed with tea grown in the Argentinian rainforest, the company says.

Hard kombucha is another FMB segment gaining traction. With sales of $20.5 million, the sub-segment increased 68.7 percent for the 52 weeks ending Dec. 28, 2019, according to Nielsen data.

Another arena that could be on the horizon are hard coffees. Based on Nielsen data, this FMB sub-segment generated a little more than $2 million is sales in 2019; however, major brewers are showing an interest in the market. For instance, Chicago-based Molson Coors Brewing Co. announced last fall that is was partnering with La Colombe Coffee Roaster to develop La Colombe Hard Cold Brew Coffee, a ready-to-drink cold brew with 4.2 percent alcohol by volume. The hard cold brew coffee hit test markets in Boston, Denver and the greater Tampa/Fort Myers/Treasure Coast area in Florida in September 2019. BI