Prevent Consumer Confusion Around Hard Versions of Soft Drinks

Alex Koral
September 20, 2023

A trend of the last few years has been the surge in new products entering the beverage alcohol market, from hard seltzers to RTD cocktails, along with the entry of well-established, traditionally non-alcoholic brands, like Hard Mountain Dew and Simply Spiked. While the growth of hard soft drinks is great for consumers, who benefit from the expanded selection and additional styles to try, some of these products bring with them the serious risk of consumer confusion.

Consumer confusion is a key issue underpinning beverage alcohol regulation in the U.S. For perfectly understandable reasons, it is critical that consumers both are informed as to what they are buying and that they can trust the accuracy of that information.

It’s annoying if a consumer buys what’s labeled a Riesling only to find out it’s actually a Sauvignon Blanc. But when there is a product on a shelf that would normally be available for kids to drink, but now has an ABV, then the potential risks become extreme. That many of these alcoholic versions of established brands are sold in the same stores—or even in adjoining aisles—to their non-alcoholic counterparts, heightens the concern.

Alcohol producers (particularly new entrants that may not be as familiar with the industry’s standards) must do their part by recognizing the risks associated with any such potential confusion—and by abiding by the state and federal laws designed to eliminate such confusion.

How do the laws reduce consumer confusion?

Proper and accurate labeling is one of the mainstays of alcohol regulations. Ensuring that consumers know what they’re buying—and can trust that those statements are accurate—has been central to beverage alcohol law going back to the very earliest days following the repeal of Prohibition.

All alcoholic beverages sold in the U.S. are subject to federal regulations and laws that require clear and direct disclosure of their contents and nature. Beers, wines and spirits must be labeled as such, and all products that have an ABV greater than 0.5% must include the standard Government Warning label.

The Trade and Tax Bureau (TTB) governs these federal laws and issues Certificates of Label Approval (COLA) for beverage alcohol products reviewed for compliance with federal labeling standards. Through the COLA process the TTB lends an imprimatur to brands that, at least officially, are clearly and accurately labeled in a way that an average consumer should know what they are buying.

This is not to say that the COLA process is foolproof, however. Indeed, many alcoholic products are exempt (or excluded) from getting a COLA due to how federal law is written. Malt beverages that do not contain hops and wines with an ABV under 7% (which would include most juice-based beverages) cannot receive a COLA and so will not be reviewed by the TTB prior to sale. That many of the developing products like malt-based hard seltzers or spiked juices would fall into these exclusory categories is potentially problematic. (These products are still subject to federal laws around clear and accurate labeling and must still include the Government Warning; they just would not be reviewed by the TTB for a COLA prior to sale.)

Going beyond the law

Even if a brand label strictly adheres to the letter of the law, there is still the potential for consumer confusion, which means that suppliers should take additional measures to ensure that consumers are fully aware of what they are buying when they pick up a product from the shelf.

Above all, this means not being coy or cute about labeling. Especially for established brands that typically do not contain alcohol (spiked juices and sodas), they should loudly and very visibly announce that they are an alcoholic version. Don’t rely on consumers to read the small print on the side or back of the label; don’t slip a small “spiked” or “hard” in quotes, barely visible near the brand name; don’t make your alcoholic labels nearly indistinguishable from your non-alcoholic labels. Be direct, even proud, of the new format available of your beloved brand, and call out that it is alcoholic.

There are also many other industry principles and standards that new market entrants need to be aware of beyond clear and visible labeling. These include limiting where alcoholic beverages can be advertised and marketed. Avoid markets that are even moderately populated by minors—like many social media platforms—and make sure your ads are not even possibly seen as targeting kids.

Ultimately, these rules and standards are designed to prevent any alcoholic product from seemingly being attractive to kids, which is a principled goal that everyone in the beverage alcohol industry should work towards. These principles, however, can be taken to an extreme, where regulators and lawmakers act to prevent all apparently “kid-friendly” versions of adult products from being sold.

At times this can feel onerous—after all, many adults like sweet things and the brands they grew up with. But remember that it comes from seeking the safety of minors above all else. And if it seems like the beverage alcohol industry is being cavalier about that safety, then there certainly could be additional regulations down the road that could prohibit the sale of products that are attractive to minors, however that is defined.

No one wants minors to get their hands on these spiked products, even accidentally—and no one wants this burgeoning market to collapse because regulators think their concerns are being ignored. As an industry, it serves us all to recognize both that this is an issue that we have been working with and managing for decades, if not centuries (after all “hard cider” v. “apple juice” has been an issue since people first started fermenting apples). And we need to recognize what we all can do to prevent that confusion, from better and more visible labeling of beverages to where spiked or hard versions of established brands are placed in retail stores.

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Alex Koral

Alex Koral is Senior Regulatory Counsel for Sovos ShipCompliant in the company’s Boulder, Colorado office. He actively researches beverage alcohol regulations and market developments to inform development of Sovos’ ShipCompliant product and help educate the industry on compliance issues. Alex has been in the beverage alcohol arena since 2015, after receiving his J.D. from the University of Colorado Law School.
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