It's Not Your Grandparents' Beverage Market Anymore
Welcome to 2019. This isn't your grandparents' beverage market anymore. Soda is being replaced by seltzer water. Beer is being replaced by spiked seltzer. A whiskey glass is being replaced by a whiskey pod.
Soda consumption in the U.S. fell to a 31-year low in 2016. Last year bottled sparkling water volume grew by 26% versus just 4.2% for bottled still water. Those statistics were enough for Coca-Cola to introduce its first new beverage line in more than a decade yesterday. The company is introducing AHA, a new brand of sparkling water, which will launch in March.
This isn't their first attempt at sparkling water. With the introduction of AHA, they'll be pulling their Dasani brand of sparkling water. They also attempted to make a Smartwater version that never took off. Consumers want healthier alternatives, which was echoed by Coke’s head of North American still beverages unit, who said "We’re fairly focused with this on extending our new brand and creating a new brand, as well as extending in other categories of our core equities."
Just like soda companies need to find healthier alternatives, beer makers are increasingly offering spiked seltzer drinks for calorie-conscious customers. Also yesterday, Anheuser-Busch announced its tripling down on hard seltzer drinks. In addition to its Natty Light and Bon & Viv offerings, they'll now offer Bud Light seltz in 2020.
White Claw, which brought attention to the category, is now in the top 25 brands among malt beverages and beers with sales surpassing all craft beer brands, except for Blue Moon Belgian White. Spiked seltzer is on pace to see another year of triple, yes triple, digit percentage growth to $1 billion in sales. They've become so popular the Brewers Association even changed its definition of a craft brewer to include drinks such as seltzers and THC beverages after a poll of association members found the majority intend to produce drinks other than beer in the next 3-5 years.
With consumers' beverage tastes rapidly evolving, the largest beverage companies appear to be at the point of doing whatever it takes to have products that are currently popular. With so many smaller beverage companies constantly coming out with new drinks, their only option may be to continue to acquire that month's hot beverage maker.
But you can make a lot of money doing it. In an effort to curb video game addiction, China is placing a curfew on online gaming and limiting how much money can be transferred into online gaming accounts. The rules, which will affect the world's largest video game market, will apply to gamers under 18 years old. Minors will be banned from playing online games between 10 p.m. and 8 a.m and be limited to 90 minutes on weekdays and three hours on weekends and holidays. China, which accounts for a quarter of global gaming revenue, is introducing the rules in an attempt to protect "the physical and mental health of minors."
If you bought shares Wednesday, you just lost two-thirds of your investment in less than 24 hours. Shares of party goods retailer Party City got absolutely annihilated yesterday, falling 67%, as the company cut its annual revenue and profit forecasts. The company blamed a helium shortage and poor Halloween sales, despite Halloween spending estimated to hit nearly $9 billion this year. Shares of Party City are now down 91% from their high to a new record low.
They'll need more than Drake. Canopy Growth, which is down nearly 70% from its high last year, is forming a "cannabis wellness company" with rapper Drake. The More Life Growth Co., which will be 60% owned by Drake and 40% owned by Canopy, will cultivate, process and sell cannabis in Toronto. "The idea of being able to build something special in an industry that is ever growing has been inspiring," Drake said. Drake joins other celebrities such as Seth Rogen, Martha Stewart and Snoop Dogg who have partnered with the company.
This sounds a bit desperate. Lyft, which is now down more than 50% from its high reached the day of its IPO, is begging customers to trade in their cars in exchange for ride credits. The offer, available in Los Angeles, San Francisco and Chicago, would give people who sell their cars through Carvana $250 in Lyft credits and three months of free membership in the company's subscription service Pink. Carvana will not be sharing profits from these sales with Lyft.
Everyone wants to be an influencer. According to a survey from Morning Consult, 86% of people between 13 and 38 years old want to try out "influencing." For millennials, the most common motivations for them to be an influencer are flexible hours, money and making a difference. For Gen Z, the most common motivations are making a difference, flexible hours and sharing ideas. As Andy Warhol famously said "In the future, everyone will be world-famous for 15 minutes."