White Claw, a trendy boozy seltzer, has been attracting attention with the recent launch of its brand in Canada. It’s been a bit of a homecoming of sorts, given the product, which has legions of fans in the United States, was developed by Vancouver-based beverage brand Mark Anthony Group of Companies.
Early morning on Feb. 29, a line of eager customers snarled around the block in sub-zero temperatures at the Front Street and Spadina Avenue LCBO in Toronto for the chance to be among the first in Canada to buy a can of White Claw.
“It shows the extent of the pent-up demand,” says Anthony von Mandl, chief executive, founder and sole owner of Mark Anthony Group. “So many Canadians have been crossing the border and bringing product back. Thousands and thousands of Canadians have been clamouring and sending us messages about bringing White Claw to Canada.”
White Claw is not the only alcoholic seltzer, but it’s one of the most popular, capturing 60 per cent of the share of the U.S. market. Hard seltzers are akin to canned vodka soda with a hint of fruit flavour: the boozy answer to La Croix.
White Claw is marketed as a healthier alternative to beer and sweeter ready-to-drink (RTD) cocktails – its slim cans prominently announce that the 5-per-cent alcohol by volume (ABV) drink is gluten free and has 100 calories. Last summer, the drink became a cultural sensation, with mentions on social-media platforms an average of every 12 seconds – many lamenting the lack of supply as the company struggled to keep up with exploding demand. White Claw sold 29 million cases in the U.S. last year and the company estimates that it could have sold much more if it had been able to produce enough to meet demand.
Mr. von Mandl got his start as a wine importer in Vancouver before hitting it big with Mike’s Hard Lemonade, the RTD sensation of the 1990s. In 2015, Mark Anthony sold the Canadian rights to Mike’s Hard Lemonade, Okanagan Cider and other RTD brands to Labatt Brewing Co. as part of a US$350-million deal, but retained ownership in the U.S. market. Today, Mr. von Mandl’s company is perhaps best known in Canada as the owner of high-end Okanagan wineries such as Mission Hill Family Estate.
White Claw was developed at Mark Anthony’s innovation centre in Ireland and launched in the U.S. due to the company’s strong distribution network for RTD products there, but its roots are clearly Canadian. Many food and beverage companies buy from large flavour labs, but Mark Anthony produces all its own flavours in Canada, including the all-natural black cherry and cold-pressed citrus that define the White Claw brand.
But Canadian White Claw is different than its American counterpart – in the U.S., the alcohol comes from a fermented sugar base while in Canada, the drink starts with corn that is distilled five times. In the U.S., drinks made with fermented alcohol are regulated like beer, while those with distilled spirits face stronger controls on packaging and point of sale. Canadian laws are generally indifferent to the type of alcohol, focusing instead on the ABV. The company claims the taste is indistinguishable, and since the distilled spirit version is easier to produce, they’re able to use third-party plants in Toronto and Calgary to supply the Canadian market rather than waiting for their two new plants in New Jersey and Arizona to be completed in the coming months.
The dramatic growth of White Claw – sales of 12 million cases in 2018 grew to 29 million last year – draws from all ages and types of drinkers. Gen Z and millennial drinkers are a core demographic, as more than half of White Claw’s American customers are between the ages of 21 and 34, and 53 per cent are men. Beer used to be the default beverage for this group as they entered legal drinking age, but today the social pressure to drink beer has relaxed.
U.S. sales of hard seltzer more than doubled in 2019 to top US$1-billion. With such growth, it’s no surprise that White Claw is set to face some stiff competition as all the major beer brands are launching their own hard seltzers. AB InBev, for instance, spent millions of dollars on Super Bowl ads this year to push both its Bon & Viv Spiked Seltzer and a new line of Bud Light Seltzers. Boston Beer Co.-backed Truly, which is also available in Canada and has a 25-per-cent market share in the U.S., has been the largest competitor and is growing quickly.
“Perfect time, perfect place,” says Andreas Schotter, an associate professor of general management and international business at the University of Western Ontario’s Ivey Business School, of White Claw’s rise. Prof. Schotter said in addition to the declining popularity of beer, there is also an increased trend for experimentation and desire for healthier products among younger consumers that fits with White Claw’s array of flavour options and low sugar and calorie levels as compared to beer and standard ready-to-drink options. “There’s been a shift in the consumer market that allows companies like them to enter, but it remains to be seen if it’s sustainable,” Prof. Schotter says.