The global vodka seltzer market size was valued at $472.3 million in 2021, and is projected to reach $2 billion by 2031, growing at a CAGR of 13.8% from 2022 to 2031.
Vodka seltzer is a blended, low-alcohol drink made with flavored seltzer water and vodka packaged in cans or bottles. The beverage is a fruity sparkling water with a subtle kick of alcohol that comes from the vodka. Vodka seltzers frequently include less sugar and calories than other alcoholic beverages and have a lower alcohol concentration. They can be topped with a wedge of lime or another citrus fruit to add more taste, and are frequently served over ice. Vodka seltzers have grown in popularity recently as customers' interest in simple-to-drink, refreshing drinks with minimal alcohol and sugar content has increased. They are an easy alternative for drinking at home or when traveling because they are offered in ready-to-drink cans or bottles.
The popularity of vodka seltzer skyrocketed in 2019, and in 2020, vodka seltzer recorded its highest sales in the U.S. The product has attracted young and health-conscious people, owing to its low alcohol content and low calories & carbohydrates. An increase in the impact of western culture, rapid urbanization, changes in the perception of consumers toward the consumption of alcoholic beverages and change in consumer preferences in developing regions are anticipated to drive the vodka seltzer market growth.
The expected vodka seltzer market demand has been attributed mostly to the expanding millennial market. In addition, youth possess significant purchasing power and have frequently impacted the release of novel alcoholic beverages. Dynamic adjustments in consumer tastes and high tendency for tasty, low-alcohol, and low-calorie beverages drive the demand for vodka seltzer. The developing countries such as China, India, Indonesia, and the Philippines act as the lucrative markets due to increase in millennials and rapid urbanization. For instance, the Philippines has one of the youngest populations in the world. In the Philippines, the population is about 109 million , 51% of whom are aged 24 or younger. Furthermore, with an average working age of 24 years, there are more young professionals in urban areas across the country. Thus, increase in the number of young people acts as a key driver of the global vodka seltzer sector.
In 2020, vodka seltzer drinks gained major popularity in the U.S. among the millennial population, as it is a low ABV content, low calorie, low carbohydrate drink, and is mostly offered with 0.5 to 8.0 alcohol content. In addition, international brewery companies are hugely investing the vodka seltzer production, which is anticipated to offer remunerative opportunities for the expansion of the global vodka seltzer market. Although the population of major developing countries lacks product knowledge and is unaware of the existence of the product, it is likely to open new avenues for vodka seltzer companies to launch their products and create awareness about its products. The market for vodka seltzer in developing countries is untapped, and with the launch of the product, it is expected to witness exponential growth.
Vodka seltzer is gaining high traction due to its low sugar & calorie content and unique taste. To gain a competitive edge in the global vodka seltzer market, key players are introducing new flavors in their product portfolios. For instance, in April 2022, Boston Beer Company introduced Truly Flavored Vodka and its first spirits-based hard seltzer. The flavors include cherry lime, blackberry lemon, peach tangerine, and pineapple cranberry. The introduction of new flavors and varieties is increasing customer interest and attractiveness of the vodka seltzer. Thus, the rise in popularity is increasing the volume of sales in North America, which is driving the expansion of the vodka seltzer industry.
Beer, alcopop, and alcoholic soda are low-alcohol drinks that witness high demand among consumers. While consumers are knowledgeable about the already available goods, many are unaware of vodka seltzer. People tend to choose other alternatives to vodka seltzer because of their well-known superior flavors. The drinking of vodka seltzer has not been recognized by consumers in many parts of the world because they do not recognize its advantages. Moreover, vodka seltzer witnesses relatively low adoption due to ease of access to fruit beer, alcopop, and alcoholic sodas, which taste better than vodka seltzer, thus hampering its sale. Thus, the market's growth is hampered by ignorance about vodka seltzer by consumers in emerging countries and availability of abundance of alternatives that are low in alcoholic content.
On the contrary, sale of vodka seltzer is anticipated to increase through digital channels as online shopping grows. the use of internet channels for purchasing vodka seltzer has increased considerably, which is expected to offer remunerative opportunities for the market expansion during the forecast period. Convenience, time savings, and the opportunity to access a variety of options with a single click are a few advantages of internet buying. With the outbreak of the COVID-19 pandemic, people were compelled to switch to online purchasing. According to the United Nations Conference on Trade and Development (UNCTAD), online retail sales increased from 16% to 19% of total retail sales in 2020, indicating that the e-commerce business expanded. In the Republic of Korea, where online retail sales increased from 20.8% in 2018 to 25.9% in 2020, the greatest percentage online retail sales were recorded, per the data. The rising proportion demonstrates how customers are redistributing their spending into internet purchasing, which is becoming more well-liked. Thus, rise in penetration of online channels is anticipated to be aided by the ease of access to the internet and increase in popularity of online shopping among consumers.
The global vodka seltzer market is segmented into type, packaging, distribution channel, and region. By type, the market is classified into ABV less than 4.6% and ABV more than 4.6%. On the basis of packaging, it is categorized into metal cans and bottles. Depending on distribution channel, it is bifurcated into on-trade and off-trade. Region wise, the market is analyzed across North America (the U.S., Canada, and Mexico), Europe (Germany, UK, Ireland, Netherlands, Spain, and the rest of Europe), Asia-Pacific (Japan, Australia, Singapore, and the rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).
According to type, the ABV more than 4.6% seltzer segment gained a major share of the global market in 2021, and is expected to sustain its market share during the forecast period. In the market, the availability of vodka seltzer with an ABV more than 4.6% is higher as vodka is a high-alcoholic spirit, and therefore, incorporating them into seltzers tends to increase the overall alcohol content of the product. Moreover, in some countries, government regulations are encouraging the sales of vodka seltzers with tax breaks and other incentives to deviate the consumers from high-alcoholic beverages.
According to the packaging, the metal cans segment was the major share contributor in 2021 and is expected to continue this trend during the forecast period. This is attributed to the fact that cans are renowned for being lightweight and handy, making them suitable for consumers who are frequently on the go. In addition, cans serve as an ideal alternative to breaking beverage containers made of delicate materials such as glass. Moreover, metal cans provide a strong barrier to air and sunlight, keeping the flavor, fragrance, and freshness of the beverage intact. Furthermore, the development in the metal can technology has made it possible to lighten and lower the weight of the cans, improving user convenience.
On the basis of distribution channel, the off-trade segment dominated the market in 2021, and is expected to sustain its market share during the forecast period. Several businesses, including hypermarkets, supermarkets, and specialized shops, sell vodka seltzer. Yet, the recent rise in alcohol sales made online has decreased the number of times consumers visit physical stores. Internet payment has become a safe and secure method to pay online with the development of technology. Thus, increase in penetration of online platforms encourages consumers to opt for online shopping, which, in turn, drives the product promotion and sales. Although the off-trade segment for spirits has gained a greater market share due to stronger sales in terms of quantity and value, convenient accessibility and the various discounts given in e-online stores are the segment's growth drivers.
Region, North America dominated the global market in 2021 and is expected to be dominant during the vodka seltzer market forecast period. Vodka seltzer is in high demand in North American as consumers are increasingly interested in low-carb, zero-calorie, and zero-sugar beverages, which is driving them to switch from sugared alcopops to vodka seltzer. In addition, consumers are preferring beverages made from natural ingredients, which has resulted in the introduction and usage of natural flavors. Furthermore, with the rising demand for vodka seltzer in the region, several new companies are approaching the regional market intending to benefit from significant growth prospects and provide customers with an experience of low-alcoholic beverages. As a result, both new and existing competitors are concentrating their efforts on developing innovative flavor mixes to entice consumers, especially the youth.
Players operating in the global vodka seltzer market have adopted various developmental strategies to expand their vodka seltzer market share, increase profitability, and remain competitive in the market. Key players profiled in this report include Boston Beer Co. Inc., Carlton & United Breweries Pty Ltd., Cutwater Spirits, LLC, Diageo Loyal Spirits Corporation, Diageo PLC, East London Liquor Company Limited, High Noon Spirits Company, Jem Beverage Company, LLC, La Dolce Vita Seltzer, Mark Anthony Brewing, Inc., Molson Coors Beverage Company, Nude Beverages, Inc., Pernod Ricard, Southern Tier Distilling, LLC, and Spirited Cocktails Corporation.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the vodka seltzer market analysis from 2021 to 2031 to identify the prevailing vodka seltzer market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the vodka seltzer market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global vodka seltzer market trends, key players, market segments, application areas, and market growth strategies.
Vodka Seltzer Market Report Highlights
| Aspects | Details |
 Market Size By 2031 | USD 2 billion |
 Growth Rate | CAGR of 13.8% |
 Forecast period | 2021 - 2031 |
 Report Pages | 320 |
 By Type |
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 By Packaging |
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 By Distribution Channel |
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 By Region |
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 Key Market Players | Nude Beverages, Boston Beer Co. Inc., Carlton & United Breweries, High Noon Spirits Company, Cutwater Spirits, LLC, La Dolce Vita Seltzer, Pernod Ricard, Diageo plc., Southern Tier Distilling Company, Molson Coors Beverage Company, East London Liquor Company Limited, Mark Anthony Brewing, Inc |
Analyst Review
As per the perspective of top-level CXOs, North America has been dominating the global vodka seltzer market and is expected to continue its dominance during the forecast period. Vodka seltzer witnessed high popularity in 2019 and is increasingly substituting various alcoholic and non-alcoholic beverages, including wine and beer. This is attributed to the fact that it contains ABV content between 4.5% and 11%, low calories, and low carbohydrates, which is likely to attract the health-conscious millennial population.
Constant innovation in beverage packaging and product improvements in alcoholic beverages are promoting alcohol beverage consumers to buy vodka seltzer. In addition, rise in preference for beverages with low alcoholic content among health-conscious consumer boosts the sales of vodka seltzer in the U.S. Moreover, online platform has gained major attention from the millennial population during the pandemic, owing to doorstep delivery and heavy discounts, which bolster the growth of the vodka seltzer market. The CXOs further added that vodka seltzer is an untapped potential market, which is not yet known to the world except for the U.S. Thus, international beverage companies are investing in the vodka seltzer market and planning to launch it in developing economies. Key players in the market have adopted new service launches, continuous innovation, and acquisition as their key developmental strategies to cater to the rising demand for vodka seltzer. The global market for vodka seltzer is expected to see dynamic growth which is likely to promote alcoholic and non-alcoholic beverage-producing companies to extend their product line with vodka seltzer. However, the availability of substitutes such as spirits, wine, and beer, which has gained major popularity and made undisputed space among consumers, is likely to be a major challenge for the growth of the global vodka seltzer market.
The global vodka seltzer market size was valued at $472.3 million in 2021, and is estimated to reach $2,003.9 million by 2031, registering a CAGR of 13.8% from 2022 to 2031.
The global vodka seltzer market registered a CAGR of 13.8% from 2022 to 2031.
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The forecast period in the vodka seltzer market report is from 2022 to 2031.
The top companies that hold the market share in the vodka seltzer market include Boston Beer Co. Inc., Carlton & United Breweries Pty Ltd, Diageo PLC, High Noon Spirits Company, Jem Beverage Company, LLC, and others.
The vodka seltzer market report has 3 segments. The segments are type, packaging, and distribution channel.
The emerging countries in the vodka seltzer market are likely to grow at a CAGR of more than 19% from 2022 to 2031.
Post-COVID-19, the demand for low-alcoholic beverages among consumers has increased, which has encouraged vodka seltzer manufacturers to introduce vodka seltzers in unique flavors. The increasing availability of new products is fueling the sales and is expected to gain a prominent share in the alcohol & spirits market in the forecasted years.
North America will dominate the vodka seltzer market by the end of 2031.
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