Think you know hard seltzer because you rode the White Claw wave? Turns out, there’s a whole lot more to the sparkling stuff than you might expect.
In this episode, we take a little detour from wine talk to venture into the ubertrendy world of hard seltzer. There’s no doubt that hard seltzer took the drinks world by storm, but what’s next for this hot category? Craft, of course.
Beer Editor John Holl talks to Ninkasi Brewing Company’s Jamie Floyd and Daniel Sharp about giving hard seltzer the craft beer treatment, and what’s next for the seemingly unstoppable category.
Check out more about the expanding world of hard seltzer with these reads:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio before quoting.
Lauren Buzzeo 0:08
Hello, and welcome to the Wine Enthusiast Podcast, your serving of wine trends and passionate people beyond the bottle. I’m Lauren Buzzeo, the managing editor here at Wine Enthusiast, and in this episode, we’re going to take a little detour from the straight wine talk and venture into another drink arena, the über trendy world of hard seltzer. Think you know hard seltzer because you rode the White Claw wave? Turns out there’s a whole lot more to this burgeoning beverage category to dive into. There’s no doubt that hard seltzer took the world by storm, but what’s next for this hot category? Well, craft of course. Beer Editor John Holl talks to Ninkasi Brewing Company‘s Jamie Floyd and Daniel Sharp about taking the trend to the next level, and why hard seltzer’s next big move is to make a lasting home in the world of craft brewing.
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John Holl 1:48
Well, thanks for sitting down with me virtually for this conversation. One of the things that I found really interesting in covering beer for the last two decades is that I’m also now covering hard seltzer. And it’s sort of taken me a little bit to reconcile that fact, because when I first started covering it, it was post-Zima, but that was still a punchline to a joke for a lot of brewers. And mind you, I know a lot of brewers will still go out and they’re happy to drink Highlife, and they’re happy to drink Coors Banquet and they’re happy to drink well drinks, because the price is right. But you know, seltzer when it first sort of came out was this sort of dismissive, like, “Oh, this is going to be a blip” in the same way that maybe some of the hard sodas were or when we saw even some of the hard iced teas or some of the other stuff. They made money for the companies that that did them, but they never really sort of took off from the general consciousness and now we’re covering hard seltzer and you guys are making it. So I’m sort of curious as to whoever wants to field this and just say your name first before you answer. But why is a brewer making hard seltzer in 2020?
Jamie Floyd 3:06
This is Jamie, my partner Nikos and I have been looking at the beverage sphere for a long time, and we had looked at diversifying our platform. We’ve been around for almost 15 years now, and we reached a level of producing beer in the high 80,000 barrel range. And we built a brewery that really functions well at 120,000 barrels. Even though we’re okay, and all of that the efficiencies that we get and intended to to utilize our facility get a lot more efficient at that level. So, whether we were looking at contract partners for beer, and then as other beverages started to appear from hard kombuchas, to your point, we saw the soda spike for a short while, and it sort of got our minds thinking about diversifying our platform that way as far as the kinds of beverages that we would potentially sell to the market. We looked at a lot of different stuff and, for the soda piece of that, I think that people were really banking for a whole generation that didn’t get their caffeine from bitter things like coffee. [They] were really trained with a sweet palate and we saw a really big rise in seltzer and other sweet products for a long time. And I think that when the sodas came out, everyone was really into it until they realized that they were really drinking incredibly high sugar quantity sources to get it and at a time when our culture was considering things on the healthier-for-you category or things that were not quite as sugar forward. I think I was the same as you as seeing sort of some trends come along and, you know, what are those opportunities for doing that. Things like kombucha are very tricky in terms of keeping the mother alive in an appropriate way and just sort of how that competes with other aspects of your brewery. So we were looking at a lot of different things and and seltzer was one of the platforms that for beverage where we thought that we could be a part of it in a way that worked with the equipment and stuff that we had on site. And also was a product that we could actually do in a way that we really liked ourselves as well. So our seltzers are not like necessarily every other seltzer. I’m not saying it’s ultimately the most unique of them all. They all have their different characteristics, which I think will come out in the later part of the conversation.
John Holl 5:30
So that’s sort of the interesting thing, though, because I have been hearing a lot more about kombucha these days. But whenever I try to get an elevator pitch from somebody as to what it is or how it might appeal to me as a drinker, I sort of get a pause before I get an answer. And then the answer sort of goes off in about 90 different directions. As opposed to a hard seltzer, where it’s fizzly, bubbly alcohol water. It’s a pretty easy concept, I think, for people to grasp. Is that sort of like what led you down that path as well, like there’s not as much explanation or not as much education needed, even compared to like those early days, 15 years ago, when you when you first started Ninkasi, of having to tell people or sell people on the concept of an IPA, or the concept of a stout or a tripel or whatever it is that you were making at the time.
Jamie Floyd 6:26
I think that’s definitely a good perspective to take on that. I think for me, personally, I don’t love the flavors of kombucha, but I have a really sensitive palate and acetic acids I’m really sensitive to, whereas my wife drinks it all the time. So there’s definitely, I think, a bigger flavor range within those and, to your point, a lot more explanation that needs to happen. Also to your point, you know, in the old days, people just thought of beer as beer, whether it was High Life or Budweiser, whatever. Beer is just beer, it didn’t really need a lot of explanation. And to your point, with IPAs, you had to sell that aspect in. For us, we did see the opportunity to get into that segment at an earlier stage than maybe some other people would, and started working on this project quite a while ago. We were able to get it into bottles right away and our wholesale partners were not as enthusiastic about selling it in bottles, because all of the other aspects were in cans and consumer preference was going to cans. So we had kind of a delay in getting that release out until we could get a bigger canning filler installed here last fall and now have that ability to add brands and different things to our portfolio in a canned sphere. Now really would be releasing it on it’s more full fledged range if it weren’t for the fact that the resets and grocery chains didn’t really happen right away. So we targeted as a way for us to get in early and thought that it would stick around for a while. It’s certainly showing that it looks to do that very much so.
John Holl 8:07
So I want to get into the nitty gritty of seltzer in just a minute, but I’m curious that you’ve used the words, beverage sphere and beverage a few times now in this conversation. When you were saying before that it used to be beer is just beer, breweries are no longer just breweries, right? Diversification has to be the name of the game because the consumer has changed so much. You don’t have people who are just beer loyalists or wine loyalists or even spirit loyalists anymore. There’s a lot of cross drinkers that exist out there. I’m wondering how that change came for you of noticing that you weren’t just a brewery, or that you couldn’t just continue to be a brewery, but that you needed to morph into being a beverage company.
Jamie Floyd 8:55
This is still a fermented product. We are definitely fermenting things, so we didn’t decide to make CBD sodas, we don’t have a line of sparkling water. I did mention beverage a few times and it is still a part of the beverage sphere, if you will, but this is still an in-house fermented product. So for us, it’s not as far of a jump, as I know, others have done. Certainly companies have been making root beer and all kinds of sodas for a long time that were also breweries. I think it’s just more [that] consumers have decided that they don’t want to just drink beer as a form of having alcohol as a part of that experience. [It] has opened up abilities for different products. I know for a while I was trying to think about gluten-free beverages that aren’t trying to be beer, per se. And that’s not necessarily, though this sort of fits within that scope of things, that there’s other opportunities out there to help customers get sort of experiences they want that are not just beer space.
Daniel Sharp 10:10
If I can jump in here real quick, John, this is Daniel. As Jamie was saying this is still very much a beer or, more specifically, a malt beverage and falls within our processes of making a malt beverage. Now, does it meet the definition, the German definition of a beer? That’s a little more arguable. But certainly as it’s defined by TTB and FAA, these fall in the in the sphere of a beer and a fermented malt beverage. So going back to what both you and Jamie were touching on, on that paradigm shift earlier on in the craft beer renaissance when we’re talking about, well, is an IPA a beer? Well, yeah, it meets definitions of a fermented malt beverage. Is it what people are used to? No, we’re expanding that paradigm, or shifting that paradigm into what consumers are enjoying. We’re seeing that in the hard seltzer space especially as as that beverage changes from those sugary drinks that we saw earlier on when hard seltzers first came in to what’s being made now. And I would say yeah, it’s just kind of expanding what that malt beverage definition appeals to to two different groups. So it’s not like we’re making soda or something that falls outside of a fermented beverage.
John Holl 11:38
So, Daniel, I wasn’t trying to be glib or dismissive before when I was just calling it you know, fizzy, bubbly alcohol water. I know that there’s actually like a real process behind it. For those who aren’t familiar with how hard seltzer is made, can you give us a quick crash course, a 101 of what exactly hard seltzer is?
Daniel Sharp 12:01
So basically, I think there’s two kind of important nuances to understand when it comes to hard seltzers versus what we have been talking about as a traditional beer. It’s a little nitty gritty, but just bear with me for a second. So there’s two definitions when it comes to alcoholic beverages, at least from a regulatory standpoint, and we very much have to abide by those. One is beer, and that’s as it’s defined by the Food and Drug Administration, and also the Trade and Tax Bureau or the TTB. So a beer, confusingly enough, can be beer, ale, porter, stout, anything that’s fermented, but it has to have at least one half of 1% or more alcohol by volume, and be produced from malt or substitutes for malt. That’s where the key differentiation comes into play as another category of a malt beverage. So now a malt beverage is mostly just regulated by the TTB and it means an alcoholic beverage or a non-alcoholic beverage that is made with malted barley and hops. Notice it doesn’t have “from the substitute of malt or hops” in it. What that means is there’s two ways to go about getting your fermentable sugars, which will then be turned into alcohol. If you go the route of just using pure sugar, whether that’s sucrose, fructose, high fructose corn syrup, or even malt derived sugar sources. If it if all of that is a substitute of malt, then it falls under the category of what the Food and Drug Administration calls a beer. If you use a certain percentage of malted barley and hops or their parts in it, then it falls into malted beverage, and that’s very much what we’re making is the malted beverage space, and it kind of comes down to how you end up labeling those and how you’re regulated. Now for us kind of the quick process of making these is you need a fermentable sugar source, and that’s usually an obvious solution, so water and sugar. And some amount of malt that goes into there, and then hops as well. That’s all boiled for a number of reasons, a lot of it to get into solution and then also to help sanitize and kill off any microorganisms that might throw off our fermentation. From there it goes into our fermentation tanks, where it’s cooled down prior to adding yeast and then the yeast ferment out those sugars that we added to create alcohol and carbon dioxide—very similar to beer. The main difference is, we’re putting very low amounts of hops, and much, relatively speaking, compared to say an IPA or any sort of typical beer you might be thinking of, a lot less malted barley. That helps us keep the bitterness down, color, importantly, because you want to clear water standard. A lack of color. Then, low amounts of aroma from fermentation or any other byproducts throughout the process because really what you’re trying to do is create a very neutral base that you can then add your adjuncts to, whether that’s fruits or flavorings, or whatever your choice is, so that those aren’t competing with fermentation aromas. So selection of yeast is really important, fermentation temperature is really important. After that is fermented out, there’s usually a step in there to help remove some of those off-flavors and color. Now our formulation is unique in that we don’t necessary have to filter out color. Our base is produced very clear-transparent, so it doesn’t require really any color removal. But it does require that its inherent innate fermentation is the production of esters or any other fermentation byproducts, in addition to alcohol and carbon dioxide that we’re going to have to try and remove a little. So we use some carbon filtration to strip some of that out before we add the natural flavors that that we’re targeting for each different flavor. From there, it pretty much goes into package. But there is certainly an art to try to make a very high quality base and it’s something that I think we’ve been pretty successful with here at Ninkasi.
Lauren Buzzeo 16:46
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John Holl 17:24
It’s interesting about the flavors that go into these because I know there’s a lot of folks who don’t mind drinking non-alcoholic seltzer or just regular seltzer without flavorings, although obviously the the flavor combinations do really well for the companies that make them. You guys have a little bit of the benefit of seeing some scan data from sales of some of the bigger players like White Claw and Truly, that have been out there in the last couple of years. Of what they’ve put out as far as flavors go and what might resonate with a consumer base. I’m curious as to when you started to discuss, okay, what flavors are we going to put out? Where did you start that conversation? And then how did you wind up, eventually, where you are?
Daniel Sharp 18:15
I can field part of that. Initially, our two flavors that we launched were cucumber-mint and cherry blossom. Both of those are somewhat unique in that there’s not a lot of that out there, which was I think, kind of why we targeted those two flavors initially. After seeing what’s popular and what’s been doing really well, we also worked and developed the flavors that we are launching now, marionberry-lemon, grapefruit and key lime. Some of that was coming a lot from the non-alcoholic seltzer space where we’re seeing grapefruit and key lime, especially, being key flavors in that space. But also looking at what the rest of the market was doing in terms of the hard seltzer flavors and the types and amounts of flavoring that goes in, or the intensity of the flavors. We wanted to offer an alternative that was a little more along the lines of a non-alcoholic flavored seltzer profile and intensity, compared to the very high, in-your-face flavor levels that you might be seeing in some of the other competitors out there in hard seltzers.
John Holl 19:36
What about alcohol levels as well? Is there a sweet spot that you found for what an appropriate ABV might be?
Daniel Sharp 19:44
You know, we did do a lot of trials on on a spectrum of ABV, mostly looking to the market for guidance on that one. I think the rationale is that we target in at 5%. That’s what a lot of other folks are doing. I think as you start getting higher and higher in the ABV range, you’re starting to be able to consume less and less of these safely or responsibly in a given amount of time. A big component of these is that they’re a refreshing drink that you can enjoy a few of them and they’re satiating, as opposed to a one and done sort of thing. So I think that’s kind of where we targeted in that competitive space with the rest of the beverages that are out there.
Jamie Floyd 20:37
When we did our first set of tastings and sort of got what was out there in the marketplace, we were pretty shocked, at least from our perspective, for the intensity of flavors that were in there. There was, for me, as someone who’s done a lot of food and beer pairings, virtually no ability to pair food with some of them. They sort of had such an intensity of flavor that we really did, again to Daniel’s point, look towards more of the non-alcoholic seltzers that are out there. And to that drier, crisp flavor, and not the perceptual sweetness that a lot of them have, to find sort of a balance within what consumers would want over the long course, knowing that, yeah, that intensity of flavor is going to attract some of the customers that are out there. But we also suspected that as consumers had a longer time with different seltzers that they would sort of categorize themselves in different layers. And we wanted to be a part of a more natural flavor component and drinkability to it, compared to some of the competitors that are out there.
John Holl 21:46
So we’ve seen a lot of innovation in the beer space in the last couple of years and, certainly, we’ve also seen a lot of folks latch on to what other folks are doing and pushing their own business forward because of that. Now that you’ve entered into hard seltzer, are you thinking about what comes next, either with hard seltzer or beyond?
Daniel Sharp 22:14
Again, this for the seltzers piece, I’ll say that I feel like this is still a really young category, even though it’s been around for a couple of years. I feel like the players that are out there in the market for the most part have come from bigger companies with a ton of promotional money and advertising that they can drive. Certainly, wholesale partners perform really well when they have that level of support. What we’ve sort of seen is that for us, it’ll probably be a slower jump into things. I like to say back when Ninkasi was first getting into Safeways, it was not heard of to have a beer or company of our size be on those shelves and compete against what were ironically things like Sam Adams that now produce seltzer on a large scale and stuff like that. I think that it’ll be hard and a difficult fight for us to get that shelf space initially. But we’ve done a lot of testing with our consumers, especially in the Pacific Northwest that all say that they love regionality, and that is a part of what they select for. There is really a lot less competition currently in the seltzer area for craft seltzer in the Pacific Northwest, and certainly our packaging and messaging is really derived and aimed at a regionality that is different than the national campaigns that other seltzer companies are doing. For us a lot of our innovation is not just in the flavor side, but also in packaging and in the understanding of the marketing of what we’re trying to do. We’re not necessarily trying to launch this across the nation. We’re trying to fit that within the regionality of consumers who have expressed the desire for that and so I think as sort of seltzer continues to settle in and there’s more options that consumers are going to want to choose different flavors and choose different styles in the way that they do with craft, and we see ourselves as a part of that emerging category of regionality. And also that we are pursuing all really natural ingredients and that can’t be said for all of the competitors in the larger sphere. Even, you know, for the marionberry-lemon that we have on the market, marionberry is one of the great fruit products of Oregon. So, for us in innovation, we’re looking towards what we do and a lot of times with the beer sphere, or with the beers that we make, in that we’re looking at regionality, ingredients sourcing, tying into the to the consumer preferences of our area, specifically, more than a national campaign.
John Holl 24:45
How important was that? Because I think that there are people who have gotten into this space with a plan of going national or, you know, trying to take on the white claws and the Trulys that are out there. By calling it Pacific Sparkling, I mean that would appeal to me out here on the East Coast because it sort of invokes a sense of place. How important was the regionality to get your toe into this water?
Jamie Floyd 25:18
You know, I think for us, Jamie again that it was incredibly important. I think that’s a part of what allowed for us in our company culture to really share in this new fermented beverage in a way that we could be really proud of, and in a way that made sense to us as consumers as well. There’s quite a lots of people that work at Ninkasi that enjoy the seltzers we make, and I know that that’s a part of the way that it is in the Pacific Northwest certainly. Just the sort of identity that we share with the outdoors and sort of the big key points of marketing in a Pacific Northwest mentality really apply to the consumers of seltzer. Also we did a lot of research and that loyalty and bragging that people have when products come from their own regions and stuff. So it was really important for us. It also made a lot more sense from a target aspect and knowing that we could really work with some of our best wholesale partners to get the products out there and then let that pull come, versus trying to start a national campaign to compete against some of the biggest companies in the world.
Daniel Sharp 26:29
What’s interesting about some of the local flavors as well is marionberry might not be something that folks out on the East or in the Midwest are super aware of. But there’s so much fresh produce that comes from the Pacific Northwest. I think about a lot of the purees that go into beer, from berries and from other things off of the vine and off of the tree. When you’re playing around with what comes next, where are you looking for inspiration?
Jamie Floyd 27:00
We have an innovation process here that involves a large group of Ninkasi staff. We’re always looking for innovation on a pretty big level the way that we’ve seen in the beers as well. I think that that is always going to be a part of the way that we look at things. There’s innovations that include mix packs, and other things where you can throw flavors in that may not show up on our data already, and have a platform to get out there and test other flavors to see if other local flavors are inspiring in that way that may not come to people’s minds right away. And to be able to develop those into more targeted releases outside of multipacks and stuff like that as well. So I think that we can use some of what we do for innovation in beer to really spearhead that ability to test flavors in the larger market as well.
John Holl 27:55
How do you know if this has been a success?
Jamie Floyd 27:58
You know, I think already we’ve seen some success and people just being really happy to have alternatives to some of the bigger companies that are out there. If this is a program that pays for itself and is adding revenue to our company and expanding our abilities, really for our brewers who love making beers as well. This gives us that financial ability to still really play in the innovation sphere. We added a new innovation brewery and all that, so it really allows for a more balanced piece there and I think that success for us is when people really have that understanding that they can pick something locally. I’ve even had our friends at Sunriver suggest we do a collaboration seltzer, you know, so I mean, there’s a lot of opportunity out there for community building. And I think it’ll be, for me, a success if we actually see some legitimate culture that comes from it and not just a bunch of sales of any sort of specific beverage.
John Holl 29:05
Awesome. Well, guys, thanks for taking the time today. I really appreciate it.
Jamie Floyd 29:09
Thanks, John. It’s always awesome to get a chance to talk to you.
Daniel Sharp 29:12
Yeah, absolutely John. Thanks for the opportunity.
Lauren Buzzeo 29:17
Thanks for listening to this episode of the Wine Enthusiast Podcast. There is definitely a whole lot more to the hard seltzer category to consider and explore the next time you stock up on refreshing summer-ready sips. Be sure to visit winemag.com/podcast for more information about hard seltzer, including how it’s made, the latest trends and top producers to keep an eye out for. Subscribe to the Wine Enthusiast Podcast on iTunes, Google Play or wherever you find your podcasts. If you like today’s episode, we’d love to read your review and hear what you think. And hey, why not tell your wine or hard seltzer loving friends to check us out too. You can also drop us a line at email@example.com. For more wine reviews, recipes guides, deep dives and stories, visit Wine Enthusiast online at winemag.com and connect with us on Instagram, Facebook and Twitter @WineEnthusiast. The Wine Enthusiast Podcast is produced by Lauren Buzzeo and Jenny Groza. Until next episode, cheers.