Editor’s note: Michal Clements is co-author of Tuning into Mom and an independent management consultant, Los Angeles. This is an edited version of a post that originally appeared here under the title, “Hard soda brands built business by understanding Millennial drinkers.” 

The 2016 IRI Top Ten Pacesetters highlight food and beverage brands that create novel or unexpected experiences. Earning the third and tenth spots are competitive alcoholic beverages Not Your Father’s Root Beer and Henry’s Hard Soda. These brands started strong and celebrated success, although more recently other beverages have stolen market share. While both have experienced sales declines in 2017, this case study is instructive for brands seeking to reach Millennials.

IRI elaborates:

“On the food and beverage side, customization is often about creating unexpected or novel – even local or artisan – experiences. Not Your Father’s Root Beer, for instance, is a unique root beer-flavored beer.”

Not Your Father’s Root Beer sold $114.6M in its first year, with a 38 percent repeat buy, compared to Henry’s Hard Soda’s $50.3M and 29 percent repeat buy. Millennial drinkers helped fuel these successes. As reported in The Tennessean:

“Millennials of legal age, though only representing one-fourth of adults over 21, account for 35 percent of U.S. beer consumption and 32 percent of spirit consumption according to Nielson. The Wine Market Council reports that they consume 42 percent of all wine in the U.S.”

Both alcoholic brands pursue market strategies that target Millennials but focus on different segments.

Social needs of non-beer drinkers

A craft beer brewed by Small Town Brewery in Wauconda, IL, Not Your Father’s Root Beer features a blend of spices including sarsaparilla, anise, wintergreen and vanilla, along with a 5.9 percent A.B.V. In the heavily-competitive craft beer industry, Chicago Tribune reports:

“Small Town Brewery has become the nation's sixth best-selling craft beer brand in stores … It's difficult to overstate how unlikely such growth is: Based solely on the strength of one product –  Not Your Father's Root Beer – Small Town Brewery trailed only Samuel Adams, Sierra Nevada, New Belgium, Shiner and Lagunitas in terms of sales through the summer. That one brand had soared past the entire portfolios of industry stalwarts like Goose Island, Stone and Bell's.”

Which is quite an impressive feat for a product that only launched in 2015. Small Town Brewery boasts a unique backstory, which is part of its appeal:

“My great-great-grandfather from the 1600s was the captain of a ship in England. He was also a bit of a gambler. As legend has it, he won a brewery during a high-stakes card game, which led him to start crafting his own beers. He began brewing beer on the ships he sailed. This allowed him to travel further than other vessels because beer stayed fresh during long journeys. The story goes that his beer was even consumed on a fleet of ships he commanded that transported some of the earliest settlers to America. Using some of my great-great-grandfather’s recipes as inspiration, I founded Small Town Brewery. At Small Town, our goal is to honor my family’s beer-making tradition by creating specialty beers with unique and flavorful ingredients.”

The secret to Not Your Father’s Root Beer is that it has a bona-fide craft beer background but tastes nothing like beer. It allows consumers who don’t like beer to fully participate in social events featuring craft beers, which are an especially important part of Millennials’ social life. Millennials make up a large beer-drinking segment, and they prefer craft beers to other beer. According to the Brewers Association, they make up 57 percent of weekly craft beer drinkers.

Investor Eugene Kashper says of the beer’s success:

“The reason this is growing so fast is that most of the people (buying the root beer) weren't in the beer category at all. We're hoping to grow the beer category by bringing a lot of people into it.”

Reviews on the brewery’s Facebook page support this conclusion:

“I'm not a huge beer drinker, and I have a reputation for drinking beers so slowly they get warm, I know it's just terrible. But I just discovered ‘Not your father's root beer’ on accident when I was at a CVS and I'm in love!! It's SO yummy!”

“My all-time favorite ‘beer!’ The Not Your Father's and Not Your Mother's brands are so good. These are all I drink anymore! For anyone who doesn't like beer but still likes to have a bottle to sip on for events, this is your go to!”

It appears that the target includes consumers whose taste preferences are not aligned with normal craft beer flavors and, with these user comments, the target usage occasion for this product appears to be in more social craft beer/beer drinking occasions. While not explicitly stated, my experience suggests that there are also some heavier craft beer drinkers among its consumers who will use this product for variety and/or to share with others who dislike typical beer taste profiles.

“Live hard-ish”

Henry’s Hard Soda is a malt beverage with natural flavors and cane sugar, which speaks to the food trend of clean labels. Parent company MillerCoors reports it is the number one hard soda brand.

With a 4.2 percent alcohol volume, Henry’s slogan is to “Live hard-ish.” Its upbeat positioning appeals to older Millennials and Gen-Xers who “have stuff to do tomorrow,” and features videos like “Laundry Hard-ish” and “Date Night Hard-ish.”

These marketing executions clearly include the target of parents of young children (who do seem to be drinking more these days).

The brand recently extended its product line with Henry’s Hard Sparkling, a low-calorie, hard sparkling water. Josh Wexelbaum, MillerCoors marketing director for Henry’s Hard Sparkling comments:

“Henry’s Hard Sparkling is perfect for those looking to treat themselves, lightly. Whether it’s following a group spin-class or during a post-softball game toast with friends, Henry’s Hard Sparkling offers everyone the option for a lighter celebration.”

The occasions depicted by Henry’s are often solitary or small social gatherings (date night, cards with friends), and the appeal is more to liking the taste, than it is to fit in by drinking a beer-like product.

It’s very interesting that two hard soda brands with distinct positionings earned spots in IRI’s Top Ten 2016 Pacesetters. While their parents may have sipped Seagram’s wine coolers and Bud Lights, Millennials and Gen-Xers enjoy the taste, nostalgia and buzz of trendier hard sodas, along with other beverages.