Some hard seltzers and hard kombuchas in Utah are a signature away from being relegated to state-run liquor stores due to a bill that bans drinks made with flavors containing trace amounts of ethyl alcohol from grocery and convenience stores.
Senate Bill 176, an omnibus bill that would make several changes to alcohol regulation in the state, passed the state Legislature Thursday and has been sent to Gov. Spencer Cox’s desk, according to the Salt Lake Tribune.
The bill, if signed, would take effect July 1 and stores would be given six months to comply. Affected hard seltzers include the following:
- 13 flavors of Molson Coors’ Vizzy Hard Seltzer (black cherry lime, blackberry lemon, blueberry pomegranate, blueberry watermelon, kiwi watermelon, mango watermelon, papaya passionfruit, pineapple mango, raspberry lemonade, raspberry tangerine, strawberry kiwi, strawberry lemonade, and watermelon strawberry);
- Eight flavors of Flying Embers Hard Kombucha (ancient berry, berry USDA organic, ginger and oak, grapefruit thyme, lemon orchard, pineapple chili, watermelon, and wild berry);
- Five flavors of Pompette Hard Sparkling Water (clementine berry, cucumber lime, grapefruit bergamot, lemon mint and rose hibiscus);
- Five flavors of Anheuser-Busch InBev’s BonVIV Spiked Seltzer (black cherry, coconut pineapple, cranberry, grapefruit and lemon-lime);
- Four flavors of Jiant Hard Kombucha (Gingerly, Guavamente, Hicamaya, and original);
- Four flavors of Boston Beer Company’s Truly Hard Iced Tea Seltzer (lemon iced tea, peach iced tea, raspberry iced tea, and strawberry iced tea);
- Two flavors of JuneShine Hard Kombucha (lime and orange).
For some beyond beer brands looking to expand, the bill makes the Utah market unappealing or impossible to enter. Utah already has some of the country’s most restrictive alcohol regulations. In 2019, it began allowing sales of beer up to 5% ABV at grocery and c-stores, which also included most hard seltzers. Complicating matters for hard seltzer is that the vast majority of the segment’s dollar sales are in variety packs, which could include a mix of approved and unapproved flavors for Utah grocery stores.
Sonic Hard Seltzer, the product of a licensing deal between Oklahoma City-based COOP Ale Works and Sonic Drive-In, offers “only a few flavors” made with ethyl alcohol, but those flavors are included in both its variety packs, COOP president Sean Mossman told Brewbound.
“It eliminates our ability to sell either of the two variety packs and, therefore, eliminates our ability to get a distribution deal with a local network,” he said.
Sonic Hard Seltzer will enter 21 new markets with off-premise chain resets this spring, but Utah will not be among them.
“At this point, we are expanding into states that have an available market need and make it relatively beneficial to do business in the state,” Mossman said. “The question with Utah is ‘Is the juice worth the squeeze?’ R&D, reformulation, package redesign, print plates, potential dual SKUs, etc. Is the Utah market worth that effort? Many of us will answer with a hard No.”
Potential Utah distribution partners have told Mossman and his team that they’re not interested in bringing in products that cannot be sold in grocery stores.
“I understand that position, so we are going to pass for now and reconsider in the future,” he said.
Utah’s Department of Alcoholic Beverage Control (DABC) sets the number of off-premise stores to the state’s population. One store is permitted for every 48,000 citizens, which amounts to about 68 stores for Utah’s population of 3.2 million people, according to the 2020 U.S. Census. Utah also grants licenses to more than 100 package agencies to sell packaged beer, wine and spirits for off-premise consumption “in communities too small to warrant the establishment of a state store,” according to the DABC website.
Also included in S.B. 176 are name changes to the state’s alcohol regulation bodies. The DABC would become the Department of Alcoholic Beverage Services and the Alcoholic Beverage Control Commission would become the Alcoholic Beverage Services commission. The bill also proposes modernizing payment systems at state-run liquor stores to include mobile payment options such as Apple Pay, according to FOX 13 Salt Lake City.