Few new-to-Canada beverages have generated as much buzz as White Claw, the canned hard seltzer that launched in the U.S. four years ago and finally came home in February.

Produced by Vancouver-based Mark Anthony Wine & Spirits, White Claw has become the top-selling hard seltzer in the U.S. At times, demand has outpaced production, earning the brand a ton of media coverage (and a loyal following) along the way. As of early March, the company projected sales of 25 million cases in Canada over the next two years.

After debuting in the U.S., one of the largest beer markets globally, the company naturally turned to Canada, where consumer demand and awareness were already high, said Scott Walton, president of Mark Anthony Wine & Spirit, in March. When the brand finally arrived in the Great White North, more than 200 people lined up outside the first Toronto LCBO to carry it. Within a day, that store’s sales exceeded $40,000.

While the U.S. seltzer craze has earned a lot of attention, Daniel Lundberg, commercial director for six pints and beyond beer at Molson Coors, says vodka sodas have been experiencing their own, quieter boom this side of the border.

According to Todd Allen, VP of marketing at Labatt Breweries, the vodka soda category has experienced triple-digit growth over the last three years, and during that time, consumer preferences have shifted from traditional coolers to lower-calorie beverage options, with “zero gram” offerings now making up 22% of the RTD segment.

Seltzers, once limited to bar and restaurant menus, has been served unsweetened and ready-to-drink (RTD) since Social Lite Vodka Soda launched the category in 2014.

“We were onto something that clearly some others were, too,” says Social Lite’s co-founder and chief growth officer Neetu Godara, thinking back on the company’s early days as a category pioneer. “Consumer preferences were shifting in all the other food and beverage categories and it was just a matter of time before that came to bev alcohol in a really big and meaningful way.”

Since then, Godara estimates some 40 brands have sprung up, fuelling competition in the fast-growing category. This year alone, 15 new RTD brands have launched specifically in the LCBO, according to Keith Walker of Iconic Brewing Company.

In a sign of how far the category has come, the country’s largest brewers are now vying for part of the action. In January, Labatt acquired B.C.-based Goodridge & Williams Distillery, maker of Nutrl Vodka Soda, adding to a portfolio that includes Palm Bay Zero and Mike’s Harder Sparkling Water.

Over the last few years, Nutrl has been running mass campaigns and it also became the official vodka soda of the NHL (though this year’s season has been postponed), with Paul Meehan, creative director at Nutrl-owned G&W Distillery, saying the brand has no plans to change tacks in light of new entrants.

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Meanwhile, Molson Coors – which dropped the “brewing” from its name last year, becoming the Molson Coors Beverage Company – has relaunched Aquarelle vodka soda, first introduced last year and available only to Canadians. On an earnings call in January, ahead of debuting Vizzy Hard Seltzer (available only in the U.S.), CEO Gavin Hattersly said the company believes “the seltzer category is here to stay. And Molson Coors plans to compete in this space aggressively.”

Social Lite, meanwhile, sees a role for community engagement in reasserting its Canadian roots. Last month, it redirected its marketing efforts towards a “Dinner & Drinks on us!” social contest to support local restaurants struggling amid the country’s lockdown.

Finally, Aquarelle was set to launch a campaign when the pandemic hit, according to Lundberg. “We’ve kind of pivoted and reset, and we’ll be relaunching the relaunch later this spring or summer.” While Aquarelle will play the lead role for Molson Coors in Canada, he says the company is considering potential additions to the portfolio, including eventually bringing the U.S.-based Vizzy to Canada.

“[Seltzers and vodka sodas are] hitting the guy watching the hockey game to the person on the Keto diet”

While there are tangible differences between hard seltzers, vodka sodas and hard sparkling waters, Molson Coors’ Lundberg says consumers don’t seem to be paying much attention to those nuances. “There are different bases that are used to create different offerings, but I think they are, from a consumer standpoint, going after the same opportunities.”

The brand marketers consulted for this article agree that several factors are driving demand for seltzers and vodka sodas: they come in a wide variety of flavours, offer “better-for-you” benefits (natural flavours and little-to-no sugars, carbs and calories), and are easily carried to parties and social gatherings. In other words, they appeal to consumers who have grown ever-more enamoured with variety, convenience and health and wellness, say Allen and Lundberg.

Perhaps for those reasons, the category has had success reaching a younger consumer base, one that is drinking fewer traditional beverages and doesn’t necessarily fall within the industry’s prevailing gender stereotypes.

“[Seltzers and vodka sodas are] hitting the guy watching the hockey game to the person on the Keto diet to a millennial wanting to enjoy drinking responsibly and looking for better-for-you products,” says Godara.

Instead of targeting a specific demo and following beer advertising norms, White Claw takes a “gender neutral” approach to its marketing, using black-and-white ads that put the focus on purity and refreshment, says Walton. The approach caters to Gen Z and millennials (58% of its customers are age 21 to 34) who are “smarter and more informed about the ingredients and products they choose.”

Similarly, consumers of vodka soda brand Cottage Springs are split evenly between men and women age 19 to 50, says Walker, director of marketing at parent company Iconic Brewing. While 19- to 30-year-olds already have a strong understanding of the category, Walker says “older generations are now gravitating towards our beverages because they, too, are looking for healthier options when it comes to alcohol.”

Since its inception, Social Lite has targeted based on a healthy, active lifestyle – not any one gender, says Godara. But it also tweaked its visual identity this year, maintaining a vibrant colour palette, while resizing its logo and adding the words “Be Social, Live Lite” directly on cans to “make it clear this is about a lifestyle.”

The move aimed to reinforce the gender-neutral positioning of what had unintentionally become a female-skewing brand, she says. “Our new branding was just us learning about a better way to articulate the intention that we always had.”

“You can only product differentiate or flavour differentiate for so long”

So far, the category has been a game of wait-and-see: for every move a brand makes, others are taking note and, before long, making similar moves of their own.

Social Lite has Social Lite Bold (6% ABV), while Nutrl has Nutrl7 (7% ABV), both offering slightly more alcohol than the category norm of 5%. Aquarelle and Cottage Springs each have a vodka and still water offering – innovation from this year aimed at consumers who don’t like carbonation, according to Walker and Lundberg. Social Lite (with Social Lite gin soda) and Labatt (with its Tempo and Tailspin gin and soda brands) have both expanded into new base alcohols. All are aimed at quelling people’s unquenchable thirst for variety.

With each brand falling under the broader umbrella of “better-for-you” beverages, the principle differentiating factor has become taste, according to the marketers, with flavours including lemon-lime, mixed berry, ruby grapefruit, pineapple mango, Ontario peach, strawberry kiwi, and many other variations.

“Things like 100 calories, zero sugars, zero carbs – those are table-stakes as this space grows,” says Lundberg. “The piece that comes next… is building brands,” he says, adding that COVID-19 has likely stalled many marketing plans. “You can only product differentiate or flavour differentiate for so long, then it has to come to the next level.”

There are indications that brands are now taking that step.

Constellation Brands, for one, is reportedly spending $40 million to market Corona Hard Seltzer, which began hitting U.S. stores this spring, even after receiving backlash for a teaser campaign launched amid the pandemic.

In Canada, Cottage Springs, which has mainly relied on sampling, influencers and social in the past, plans to increase its presence across all channels, according to Walker. As of this month, the brand has grown 142% year-over-year in the LCBO.

Despite that growth, Walker says “we still feel like we are in the beginning phase of a seismic shift in consumer preferences in beverage alcohol.”