Demand for better-for-you beverages is on the rise in every category, including alcohol.

There’s a new player in the low calorie RTD cocktail space – hard (or spiked) seltzer.

Not only does this beverage appeal to the segment looking to consume fewer calories, but it also aligns with the term “sparkling,” a marketing upgrade from “carbonation.”

The bottled water category, which includes sparkling and flavor varieties, is paced to outsell CSDs by early 2017 at the latest, and sparkling water is a large driver of this growth.

Though hard seltzer is still an emerging category, an alcoholic beverage that highlights sparkling and aligns with consumer core values (including less sugar than its counterparts) has potential to capture a significant market share.

Current market players include Spiked Seltzer (founded 2013, acquired by AB InBev in September 2016) and Truly Spiked and Sparkling (an affiliate of Boston Beer Company).

The fermentation of citrus fruits naturally yields the alcohol found in hard seltzer (6%), and citrus also inspires several flavor profiles across hard seltzer brands.

Other flavors include cranberry, black cherry, and pomegranate – though we expect more exotic fruits and botanicals to be incorporated into future flavor profiles in this category.

Hard seltzer will compete with other lower-calorie ready-to-drink cocktails on the market. The Skinnygirl brand has developed several low calorie cocktails, and Mike’s Hard Lemonade offers a lite version of their flagship lemonade. All try to capture the attention of consumers who associate fewer calories with healthier choices.