How To Choose an Alcohol Base For Your Hard Seltzer Production

Hard Seltzer Alcohol Base

Although it is often categorized as a flavored malt beverage (FMB) or a beer, Nielsen uncovered that 60% of U.S. hard seltzer buyers consider hard seltzer as its own category and fewer than 10% think of it as a ‘type’ of beer. The truth is, there are different methods for making a hard seltzer, and the choice of how to formulate and produce your seltzer has broad implications not only for your product’s cost and taste, but also how it’s labeled, regulated, and taxed. 

All About the Base - What Kind of Alcohol Is In Hard Seltzer

The basic definition of a hard seltzer is seltzer water with alcohol. Where the alcohol comes from depends on the alcohol base you choose to work with. Many hard seltzers have a base of fermented cane sugar with added flavors, but seltzers can also be made with malted barley, grain neutral spirits, or wine. While the end result is a hard seltzer, the path you choose dictates a lot more than most people realize.

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Whether you’re selecting one base for your seltzer or considering a combination of bases, it’s important to understand the characteristics and implications of working with each. 

Factors to Consider Before Choosing an Alcohol Base For Your Hard Seltzer
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1. Flavor Profile

When it comes to seltzers, consumers are looking for a clean, refreshing, not-too-sweet, taste. The gold standard is grain neutral spirit (GNS), which carries that clean profile without the need to mask off-notes or fermentation byproducts.  Although it’s stripped of a lot of its malt flavor, neutral malt still carries slightly more flavors from fermentation byproducts than a fermented sugar brew. As the yeast selection, fermentation, and filtration processes advance, sugar brews are becoming cleaner and more neutral, but they still carry more flavor than a GNS. The flavor profile of a wine base will depend on what you are fermenting and the secondary filtration process you use, if any.  

2. Availability

Different grades of NMB exist on the market, and supply for the highest quality level is hard to come by, making the market very competitive. Right now, the Craft Beverage Modernization and Tax Reform Act is in effect, which authorizes bulk shipment of malt and sugar brew between breweries of different ownership. State regulations must be considered to confirm if bulk beer shipments are authorized in each state.  If the act is not renewed by congress for some reason, obtaining a neutral malt or sugar base for a seltzer could become more difficult and costly. The availability of a base depends on how many facilities are licensed to produce that type of alcohol. A winery or any copacker producing or bottling wine must have a special license to do so.  Most large breweries that offer contract manufacturing in the U.S. will provide sugar brew, neutral malt base, or both. A distillery, or a copacker that specializes in spirits will likely also be able to supply the GNS. As the market advances, there is a push towards cleaner bases with higher ABV. This requirement gives an advantage to larger producers who can afford the expensive filtration technology. 

3. Cost and Taxes

Just like any commodity, each base comes with its own core materials cost. The ingredients (yeast, nutrients, etc.) in your base play a part along with the filtration process. When it comes to costs for bases, it’s essential to factor in the Federal Excise Tax (FET) along with the cost of the raw materials. When FET is accounted for, a GNS base is considerably more expensive than a sugar brew, neutral malt, or wine base. At the state level, the classification of sugar-brews varies from state to state. The taxes on spirits are much higher than those on beer or wine. Wine generally falls between malt and spirit base when it comes to cost. Taxes and regulations on wine vary widely from state to state.

4. Alcohol Content

A neutral malt base has a slightly higher ABV (16-18%)  than a sugar brew (12-14%) or wine (11-13%), and a significantly lower ABV than a grain neutral spirits base (95%). The higher the ABV of your base, the more you can dilute it down.

5. Regulating Bodies

Under Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations, both malt- and sugar-based hard seltzers are considered “beer,” but only malt-based hard seltzers are also considered “malt beverages.” This  distinction means federal beer rules apply to both malt- and sugar-based hard seltzers, but federal malt beverage labeling and advertising rules apply only to malt-based hard seltzers. So, malt- and grain neutral spirits-based seltzers require a Certificate of Label Approval (COLA), but they do not need to comply with FDA labeling rules. Wine is also regulated by the TTB and wine-based products above 7% alcohol by volume  require a certificate of label approval. 

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6. Labeling Requirements

Under the federal beer regulations, malt-based and sugar-based seltzers require a label that shows the name or trade name of the brewer, the net contents of the container, the nature of the product (i.e., “beer”), and the place of production. The federal malt beverage labeling and advertising rules do not apply to beers without malt and/or hops, so no COLAs are required, however whenever the  Federal Alcohol Administration (FAA) act labeling requirements don’t apply, the FDA rules do. Sugar brews are required to list ingredients and nutrition facts and follow all FDA labeling laws and regulations. The label must be compliant before the product is sold at market, and the manufacturer can be held responsible for non-compliance. The TTB oversees the labeling requirements for beverages with grain neutral spirits. Wines that contain less than 7% alcohol by volume are regulated by the FDA’s labeling requirements and do not require a COLA.

7. Gluten Contents 

Malt beverages under the jurisdiction of the TTB cannot be labeled gluten-free because they contain gluten. If products undergo a process or treatment to remove some or all of the gluten, the labels could include, ““[Processed or Treated or Crafted] to remove gluten” if the following statement is included on the label:

“Product fermented from grains containing gluten and [processed or treated or crafted] to remove gluten. The gluten content of this product cannot be verified, and this product may contain gluten.”

Recently, the TTB issued a new ruling on gluten content statements that affects the labeling of some distilled spirits. Within that ruling, the TTB states, 

“TTB will permit “gluten-free” claims on distilled spirits products distilled from gluten-containing grains as long as good manufacturing practices are followed that prevent the introduction of any gluten-containing material into the final product. If a distilled spirits product is comprised of a distillate distilled from gluten-containing grains and of one or more protein-containing ingredients added after distillation, the finished product label may bear a “gluten-free” claim if the manufacturer is prepared to substantiate, upon request, the absence of protein in the distillate, the absence of gluten in the added ingredients, and the precautions taken to prevent cross-contact, including from storage materials that may contain gluten.”

Sugar-brews are produced without grains, except for corn, which is naturally gluten free. This omission allows brand owners to label their product as “Naturally Gluten Free.”

Wines fermented from fruit and distilled spirits that are produced from non-grain commodities (tequila, rum, vodka distilled from potatoes) can be labeled as gluten-free.

8. Calories

With sugar brews, the dextrose (corn sugar) and fructose (fruit sugar) used are 100% fermentable by yeast, meaning the only calories left over are those from alcohol. Malt sugars, on the other hand, are only partially fermentable by yeast. These non-fermentable sugars are left over after fermentation and contribute additional calories. A malt beverage contains more calories than a sugar brew, but less than a grain neutral spirit. There are 11 calories in 1 fl oz of malt beverage, 82 calories in 1 fl oz of 100 proof alcoholic beverage (gin, rum, whiskey), a little more than eight calories in 1 fl oz of sugar brew, and approximately 20 calories in 1fl oz of wine. When it comes to disclosing calories, a sugar brew, and a wine-based seltzer with less than 7% ABV are regulated by the FDA, and must list calories as part of the nutrition facts panel. A malt- or spirit-based seltzer is not required to list calories at this time.

Making a Conscious Choice 

Choosing your seltzer base will set you on a path that will determine everything from your product’s positioning on shelves to its flavor, price, and branding. As creators push the limits and boundaries in the seltzer market, every decision is an opportunity to build a unique competitive advantage. The more competitive the market gets, the more critical those advantages will be. 

Are you ready to create a winning hard seltzer strategy? Use our nearly 20 years of development, sourcing, and quality expertise to help you get started on the right foot. Contact us today.