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Why America has a White Claw shortage

America is running out of White Claw hard seltzer,...

Posted: Sep 16, 2019 9:40 PM

America is running out of White Claw hard seltzer, and the shortage might not end until next year.

White Claw sales have skyrocketed over the past year, according to the company and industry analysts. The company can't keep up with demand. So White Claw has purposefully limited supply to ensure it can continually serve all of its markets.

That distribution practice, called allocation, has been in place for a year, according to Mark Anthony Brands, which owns White Claw and Mike's Hard Lemonade. Stores across the United States receive a constant flow of White Claw, but the drink's distributors aren't increasing the volume of shipments to stores that run out.

Allocation allows White Claw to continue showing up in stores every so often, even though it quickly flies off shelves and runs out of stock. That's why increased demand has translated into White Claw shortages.

The company said it will continue allocate White Claw until supply returns to normal. But the spiked seltzer maker also said it's "working around the clock" to increase supply and capacity heading into 2020.

"While not completely eliminating intermittent stock outs, we believe this strategy has helped us be in the best position possible on shelf," Phil Rosse, White Claw's president, said in a statement. "But with the tremendous response we have had from consumers, understandably, our supply chain has tightened."

Spiked seltzer is now a billion dollar industry. Sales of hard seltzer surpassed $1 billion for the past year ending in August — a surge of nearly 200% compared to the previous year, according to Nielsen. Hard seltzer makes up 2.5% of the alcohol market, up from 0.9% a year ago.

Sales have soared as people seek drinks with fewer calories and less sugar. Spiked seltzer fits the bill. White Claw and competitor Truly both have around 100 calories per can, and Bon & Viv has about 90 calories per can. Natural Light Setlzer is the most caloric with more than 130 calories per can. Each brand has a few grams of carbohydrates and very little sugar per can.

Truly, owned by Sam Adams-maker Boston Beer Company, told CNN Business it's also been "experiencing shortages" and is "working hard to keep up with demand."

Popularity has exploded so much so that Anheuser-Busch reportedly wants to expand its portfolio of spiked seltzers. The company already produces Bon & Viv and Natural Light Seltzer. It soon might expand into a third seltzer brand based off Bud Light, according to multiple reports.

Budweiser didn't deny it was making a new seltzer, although it didn't confirm it, either.

"We regularly share conceptual ideas with our wholesaler partners as we develop new ways to meet consumer needs," a spokesperson told CNN Business, adding it will share new product launches "in due course."

The company said Bon & Viv hasn't had any shortages and that sales have increased year-over-year.

Despite the growing number of rivals, White Claw remains the industry leader. Sales are up 250% year over year, according to Nielsen.

-- CNN Business' Danielle Weiner-Bronner contributed to this report.

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