Dear readers,

It was my birthday this past weekend! I am now 38, and I had a birthday party with tiki drinks, including Blue Hawaiians. But it was a warm summer day, so there were also some vodka sodas consumed — and even a few White Claws.

But is White Claw losing its appeal? Amanda Mull thinks we’ve reached peak hard seltzer. She noted in a recent article for The Atlantic that sales of the once-zooming category appear to have leveled off in the past year. And she has a theory about why: Hard seltzer isn’t good. And it especially isn’t good as you get toward the bottom of the can. She relates her experience:

After the White Claw had been out of the fridge for a few minutes, the drinking experience deteriorated with extraordinary speed. What had been crisp and fizzy began to flatten out, and the flavors sagged under the weight of their artificiality. It felt like it was coating my tongue, and suddenly there was an aftertaste that reminded me of diet, off-brand lemon-lime soda, except more concentrated. Within a few minutes, the drink tasted more like a product of chemical engineering than a squeeze of lime and a splash of booze in a cold glass of seltzer.

Mull chalks up the problem to the fact that most hard seltzers are brewed rather than made from distilled spirits. The need to mask the off-flavors that come from the brewing process requires a different flavoring approach than you would use for a beverage that’s truly based on vodka and carbonated water, and the flavors get worse as the drink warms up. She suggests hard seltzers are likely to lose significant market share to ready-to-drink cocktails that actually consist of vodka, water, carbonation and flavoring in a can.

I’m skeptical, though, because of price.

As I wrote back in 2019, the rise of White Claw was driven by quirks in American tax and regulatory policy: Fermented alcoholic beverages (like beer) are generally taxed at lower rates than distilled beverages. They can also be sold in more places: Most states allow the sale of beer (and beverages categorized as beer-like) in grocery and convenience stores, while distilled spirits (and sometimes wine) have to be sold at specialized outlets or even state-run stores. The underlying rationale is that liquor is more socially problematic than beer, because it gets you drunk faster. But in general, the rules even apply to distilled products with as low a percentage of alcohol by volume as beer. As a result, a beverage that tastes like a vodka soda but is actually brewed from a sugar base has a major US market advantage: It enjoys favorable taxation and can be sold at a much wider variety of outlets than something that’s actually vodka soda in a can.

For example, the New York online grocer FreshDirect sells a 12-can White Claw variety pack for $18.99, or $1.58 per can. But High Noon Hard Seltzer, which unlike White Claw is a distilled-spirits-based product, is sold by FreshDirect’s liquor-sales partner at $22.99 for a pack of eight, or $2.87 per can. A significant part of that price difference comes from taxes embedded in the price — a White Claw 12-pack would be subject to nearly $4 of additional tax in New York City if it were made with distilled spirits. A liquor retailer also faces certain regulatory and licensing requirements that a grocer doesn't, and costs related to those requirements ultimately get passed on to consumers, too.

Mull thinks High Noon and other spirits-based drinks taste a lot better than White Claw. And she notes the ready-to-drink category has been growing strongly in recent years, albeit off a small base — quite possibly because of consumers who were habituated by the White Claw craze into expecting cocktail-like drinks in a can and who are now looking for more premium drinks in a can. (Personally, I’m partial to Cutwater’s canned mai tai, which is a distilled-spirits product.) But the price difference is large, and I think it’s a small minority of White Claw drinkers who will be induced to pay an extra $1+ per can for a more refined flavor experience.

I also have a cheaper solution to the flavor problem: Pour your White Claw over ice.

“When the drinks are kept very, very cold, those flaws aren’t as noticeable,” Mull says of the off-flavors in drinks like White Claw. I’m not sure the issue is the flavorings so much as that any beverage that’s like a vodka soda will become pretty unpleasant as it rises above 45 degrees. You put ice in a vodka soda, right? I had a couple of White Claws on the rocks this weekend, and while they’re still not my absolute favorite beverage, I found the ice kept the flavors (pineapple and strawberry, in this instance) satisfactory all the way to the end of a 12-ounce glass.

And while I can see why it might not be a top priority, I do think policymakers should look for ways to regulate similar beverages in similar ways. There’s no particular reason that a drink made from vodka should be taxed and regulated differently from a brewed beverage with the same alcohol content and a similar flavor profile and target customer. If you can sell White Claw in the supermarket, you should be able to sell High Noon there, too, with the same tax treatment — and if that were the rule, then there would be no need for the flavor gymnastics that lead to the problems Mull describes.

I’ll be back tomorrow with a podcast episode and newsletter about Democrats’ messaging challenges.

Very seriously,

Josh