Sparkling Water Surges
Though the inception of seltzer dates back hundreds of years, creative marketers breathed new life into this segment by leaning into the fantastical and sexy associations with all things that sparkle. They helped catapult carbonated water to new heights, where it continues to live, despite a recent spike in Google searches surrounding the discovery of elevated levels of per- and polyfluoroalkyl substances (pfas, sometimes referred to as “forever” chemicals for the body’s inability to break them down) in some of the leading brands. IRI data illustrated that the top 8 sparkling water brands alone (including private label) posted sales of $3bn from October 2019-October 2020 and Mintel forecasted growth of 74% through 2023.
Flavors
In a sea of sparkling innovation, we don’t expect stagnation, and some sparkling water brands are looking to fancy flavor work to differentiate themselves in a crowded marketplace.
Yuzu FTW
Typical true-to-fruit flavors are evergreen across beverage categories including sparkling water, but the latest wave of flavors are more exotic fruits, namely those popular in Japanese and other Asian cuisines. Nectar Hard Seltzer encourages fans to #quittheclaw and instead opt for their lychee, Asian pear, mandarin and yuzu libations. Hard seltzer startup Drunk Fruit has a yuzu and lychee SKU as well, though their portfolio also includes a melon variety, which is an underrepresented flavor throughout the North American CPG realm.
Asian Inspo
Kimino sparkling waters are soft, but still claim to deliver impactful Asian flavors with their ume (plum), ringo (apple), mikan (satsuma mandarin) and yuzu. Despite being founded less than three years ago, Sanzo sparkling water flavors in lychee, calamansi and mango have garnered a ton of attention from the likes of Whole Foods, Erewhon, Foxtrot market, and many other independent grocery stores and fast-casual chains.
Inspired by Mixology
Botanicals and cocktail inspired flavors are also starting to gain traction though there is still a significant opportunity to innovate with these flavor profiles. Aura Bora, as seen on Shark Tank, features botanical-forward flavors like cactus rose, lavender cucumber, basil berry, lemongrass coconut and peppermint watermelon. Blacklist Brewing Co. recently announced the launch of a blueberry basil hard seltzer, though Wild Basin has had a melon basil sku for some time in their boozy sparkling water. H2♡ is the first brand we’ve seen to lead with wine flavors in non-alcoholic sparkling waters. Their Sonoma Soft Seltzer line includes sauvignon blanc, pinot noir and rosé.
Functionals
Sparkling water that addresses more than just thirst and general refreshment surges alongside their flavored, though otherwise unadulterated, counterparts.
CBD/Hemp
CBD/hemp infusions have continued to proliferate despite the still murky regulatory climate and appear in a plethora of brands including Rhythm(15mg hemp extract), Shimmerwood(5mg full spectrum hemp CBD), Kowa(15mg full spectrum hemp), Copa Bevco (25mg hemp CBD), Wyld (25mg CBD from broad spectrum hemp extract), and Present (20mg self-produced CBD distillate). Many of these brands indicate a level of chill that can be more easily achieved with their CBD products, though Rhythm takes it to the next level by offering one sku with the addition of 5mg of melatonin.
THC
The intoxicating cousin to CBD, THC is also beginning to penetrate this space, as seen through Pabst’s Cannabis Infused Seltzer (5mg THC) and Highbridge Refresh, which has the same THC content. In addition to 5mg of THC, OhHi also includes 5mg of CBD in some of their sparkling seltzers.
Caffeine
Sparkling water with an energy boost is not a new concept, but we expect with the recent launch of bubly bounce, an extension to the booming bubly brand with 35mg of caffeine, interest will accelerate. This is not only because of the widespread acceptance of bubly, but also for the thoughtful targeting of consumers who may be sensitive to caffeine or prefer lower doses in one sitting so they can enjoy a product multiple times in a day. Rhythm offers 50mg of caffeine in one of their skus. Chirp also opted for this mid-caffeine range of 50mg and enhances their product with l-theanine for a more sustained energy.
Natural Energy
Yerbae has raised over $950k in their most recent fundraising round (through crowdsourced platform Start Engine) as they prepare for growth for their enhanced sparkling water. Products contain between 100mg and 160mg of caffeine, sourced from yerba mate, white tea, guarana seed and caffeine. Northern Cal-based brand, Nixie also relies on caffeine from tea (black and white) in their peach black tea sparkling water with 30mg of caffeine and green tea in their pomegranate sku with 15mg of caffeine.
Fancier
Hybrid products and products that deliver multiple benefits are making it harder to apply just one categorical label, but we’d be doing a disservice if we weren’t paying attention to the products that are capitalizing on the seltzer/sparkling boom by creating adjacent products – many of which won’t just be flash of the pan products.
Smooth Sailing
Hard seltzer smoothies from Smooj and Omnipollo contain real fruit and deliver a frothy, smoothie like texture, both with 5% ABV and represent the next generation of texture innovation in RTDs. Kombucha Town maintained the textural integrity of their seltzer, though experimented with the incorporation of live kombucha cultures to support a stronger gut.
Lemonade or Seltzer?
Several brands have opted in to offer products that straddle the line between juice and water. Natural ingredient advocates at Spindrift recently released three unsweetened lemonade sparkling waters in lemon limeade, pink lemonade, and strawberry lemonade, with 3% – 6% juice and 0 – 1g of sugar. In the hard seltzer space, Bud Light Seltzer Lemonade also blurs the line in their 100 calorie and 5% ABV line. Mike’s has also branched out by offering a similar product to seltzer lemonade, though calls it lemonade seltzer to capitalize on the flagship hard lemonade brand. Honorable mentions: Vive’s Hard Seltzer Fruit Punch and AriZona SunRise.
Next Gen – Organic and Infusions
Hard seltzer is getting a refresh in more ways than one, as seen in Michelob Ultra’s new USDA Organic certified 80 calorie product with 0g sugar. From the minds of Atlanta based SweetWater Brewing Co., in Feb. 2021, came Oasis Premium Hard Seltzer, infused with electrolytes, antioxidants and vitamin C. This is one of few hard seltzers fortified with these types of nutrients. If SweetWater’s significant following supports this product, it may pave the way for a new wave of antioxidant-infused alcohol.
One thing is for sure: water has never been more interesting. If you’re looking to launch a compelling and hydrating water product (sparkling or still), Imbibe is here to support innovation in flavors, functionals, and even for the fancier (or more technically challenging) projects. Email us at thedrinktank@imbibeinc.com to learn more.
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