The Summer of Seltzer

With the fall equinox, summer is officially over. And this particular summer, besides a global pandemic, devastating wildfires and widespread social unrest, of course, will be known as the summer of hard seltzers.

A display of orphaned Bud Light Seltzers, awaiting a teenager with a fake ID.

I knew summer must be almost over when I saw this sad Bud Light Seltzer display at my local grocery store. This was a far cry from the gigantic pyramids of hard seltzer that greeted us back in the spring. With sales of the category creator, White Claw, exploding the last two years and cutting into the beer companies’ most important demographic, underage drinkers, the big brands had had enough.

Bud Light and Corona both aggressively launched their hard seltzer offerings this year with massive marketing campaigns — vying for their share of a market that had already hit $4.4 billion last year and is projected to triple in the next three years. Navigating the aisles of the grocery was practically hazardous among mountains of the literally dozens of brands competing for market share.

But this isn’t a post about hard seltzer. It’s a post about business, and innovation and entrepreneurship. When a new product meets an eager market, exciting things happen. “Product-market fit” in the Valley’s vernacular is what every technology startup strives to achieve. And when that market is big enough, it inspires followers — both other startups as well as big incumbents.

For entrepreneurs and investors alike, it’s important to know if you’re White Claw or Bud Light Seltzer. Are you an innovator or a follower? Neither strategy is necessarily better, but they are definitely different. Being an innovator is a high-risk, high-reward strategy. It takes guts and vision and unwavering belief that you see an opportunity that others do not. Most of the time, you're wrong — either your product sucks or users don’t like it or the market isn’t big enough or you’re too early or whatever — and you fail. But when innovators win, they win big. White Claw has an estimated 58% share of the hard seltzer market.

Following, an innovator, especially if you have the resources of a big brand, is a safer strategy. Let a thousand innovators fail, then, for the one that succeeds and creates a new category, imitate them as quickly as you can now that the market is “proven.” Although following is safer, it’s soulless. The path has already been cut. And while brand managers for Bud Light Seltzer and Corona Seltzer no doubt convinced themselves that their offerings were somehow different, they know otherwise, and so do consumers. No one celebrates or reveres followers.

So here’s to the innovators — even the ones, especially the ones, you’ll never hear of before they fail.