BEVERAGES

The July 4 can-can

Hard seltzer really spiked last year—especially on July 4, its best sales weekend ever. And all signs point to another hard seltzer summer (no shortages in sight, fortunately).  

Drink up: Hard seltzer has universal appeal, particularly because of the range of flavors available, Brandy Rand, COO of the Americas at IWSR Drinks Market Analysis, told Retail Brew. “People have been gravitating to spirits and wine over the last decade,” she said, “with hard seltzers pulling consumers from all beverage alcohol segments.” 

• Pour one out for beer as a result. 
• US beer consumption in 2019 was just over 23 billion liters, vs. only 750 million for hard seltzer, according to IWSR Drinks Market Analysis. In 2020, beer declined almost 3%, while hard seltzer grew 130+%. 

White Claw and Truly are still the market leaders, but new brands seem to drop nonstop. 

Can do

One newbie: Half Past. It just hit the market in March (and is only available in Chicago), but is expecting this weekend to be one of its best. 

• “One of our biggest [priorities] is making sure that products remain on the shelf,” cofounder Caleigh Tully told Retail Brew. The brand hopes July 4 will propel it into more fridges all summer long. 

Half Past uses real ingredients like ginger and turmeric and bills itself as a premium hard seltzer, which is the category’s new sweet spot. 

“The premium and the craft hard seltzer is where we're at right now,” Andrea Hernández, author of the CPG newsletter Snaxshot, told Retail Brew. “Now it's just going to become all about who has the best competitive advantage over another brand.” 

Cheers all around: Seltzer isn’t the only bev feeling the love. Canned cocktail company Ranch Rider Spirits is ready for July 4 after a breakout first year.   

• The Austin-based brand was the No. 2 top-selling ready-to-drink cocktail brand on Drizly in 2020, beating out major competitors like Cutwater Spirits, Ketel One, and Jim Beam.
• Ranch Rider’s cans are in nearly 100 Whole Foods across California, Louisiana, and Arizona. 

“We prepare for weekends like this weeks in advance—from increasing production to meet demand, to planning content around the weekend, and working with distributors to make sure retailers are stocked,” cofounder Quentin Cantu told us.  

It’s the time of the season...all the time? Swelling demand is making hard seltzer more than a summer staple. 

• Sales surpassed $4.1+ billion in 2020, and are expected to top $8 billion by 2025. In 2018, they *only* hit $500 million.—KM

IPO

Marketing inclusivity on the public market

Torrid, the top-selling plus-size DTC brand in North America, went public on the New York Stock Exchange yesterday. Ticker symbol? CURV.

Investors liked the fit. Torrid raised $231 million after pricing shares at $21 each—the upper end of its expected range. The stock jumped 15% by EOD to reach $24.15.

• Torrid initially planned to IPO in 2017, but owner Sycamore Partners scrapped the plans. 
• It’s debuting at a time when going public is more common for DTC brands (Figs, Hims, BarkBox) than fellow mall mainstays. 

Torrid valued the US plus-size apparel market as an $85 billion, 90+ million customer opportunity. That implies room to grow, as the company counted 3.2 million active customers in 2020. 

• Competition’s scarce, according to retail analytics firm Edited. Few major retailers offer inclusive sizes.
• Some enter the category, only to back out years later—like Loft, which shut down its plus-size offering in March. 

Looking ahead...While Torrid plans to add a few stores to its fleet of 608, it’s more focused on building affinity with new online shoppers. “The brand is at scale, and [the IPO] is a marketing moment for the brand to get out there,” CEO Lisa Muñoz told WWD.

Not that Torrid lacks traction online. E-comm made up 70% of Torrid sales in 2020 and 48% in 2019.—HL

SPONSORED BY AFTERPAY

You Can Always Get What You Want

Er, that’s not the lyric. We suppose we just have Afterpay on the brain: that is, the service that lets your customers get what they want and what they need, online and in-store.

Retailers, the top dawgs like Michael Kors and Urban Outfitters use Afterpay for a reason. By adding Afterpay to your payment options, you’re allowing your customers to pay over six weeks—no surprises and no fees when they pay on time. 

That kinda tender lovin’ retail care results in happy, loyal, repeat customers.

You might think of something like Afterpay as an online-first option—but you’d be wrong, oh reader. Actually, offering Afterpay in-store has paid off for many retailers, boosting foot traffic and capturing new customers. In fact, retailers that offer Afterpay in-store see up to three times higher AOV values.

So get started with Afterpay—your customers will love you for it.

ANTITRUST

Anticompetitors can’t be choosers

Raise your hand if you’ve been personally victimized by the Federal Trade Commission (FTC). Oh, just Amazon? 

Amazon filed a 25-page motion this week requesting new FTC chair Lina Khan’s recusal from any and all antitrust probes involving the company. Khan has publicly criticized Amazon’s biz practices throughout her career; Amazon said those comments make impartial investigations impossible. 

Hit refresh: Amazon’s been accused of anticompetitive practices since the 2000 ribbon cutting for its third-party marketplace. But pressure to make Amazon the slightly-less-than-everything store has risen after last summer’s antitrust hearings and this year’s acquisition of MGM. 

• A bipartisan coalition is currently pushing a host of antitrust legislation aimed at Big Tech, including two regulatory bills that Amazon and its platform practices (without naming names).  

Big picture: Amazon’s reach can benefit shoppers—same-day delivery, anyone? But “there's a general discomfort with having one company with so much control,” NYU law professor Harry First told Retail Brew. Sizing up Amazon’s...size for antitrust concerns is a political and economic judgment, he said: “That's why the bills are in front of the legislature and Congress.”

The FTC didn’t comment on Amazon’s motion or those pending bills. But if Khan remains involved in Amazon cases, a tighter leash on its practices could follow.—HL, KM

WHAT ELSE IS BREWING…

• Zara, Uniqlo, and Skechers are facing a French probe over alleged forced labor.
• Food prices are rising due to extreme drought.
• Zebra Technologies will buy warehouse automation startup Fetch Robotics.
• Unilever will invest ~$275 million to expand its Mexico-based manufacturing over the next three years.
• Gap will close all its company-owned stores in the UK and Ireland by September.

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SWAPPING SKUS

Today’s top retail reads. 

Power in numbers: DTC holding companies are building multiple brands under one roof to streamline operations, leadership, and growth. (Retail Dive)

Pumped up kicks: Balenciaga’s 2017 Triple S sneaker set off a domino effect for ugly kicks. Have we reached peak clunky shoe? (WSJ)

Reduce, reuse, rebrand: Product innovation is a good first step to building a sustainable brand, but it’s not enough when implemented in isolation. (Vogue Business)

FRIEND OR FAUX? 

We’re two days away from fireworks, and brands are getting in the July 4 spirit. Can you spot the fake news story below?

1. PBR created a 1,776-pack of beer, because patriotism.
2. Supreme’s latest drop features a NERF-esque foam pellet gun. 
3. North Face teased a forthcoming skincare line, North Face Face.
4. A British engineer claimed a Guinness World Record for stacking five M&Ms.

Keep reading for the answer.

BREW’S BETS

What's on your weekend menu? If you donate to Morning Brew and World Central Kitchen's fundraiser by EOD, we'll send you a copy of our exclusive cookbook, Brunch with the Brew, featuring recipes from some of the top chefs and entrepreneurs around. Get your copy today. 

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Warby Parker’s Dave Gilboa on workforce transformation
• Creator platform startup Pietra raises $15 million Series A
• The race for post-pandemic retail space heats up

FRIEND OR FAUX? ANSWER

No, North Face isn’t making moisturizer.