What are “crossover” products?

The term “crossover alcohol product” or “co-branded alcohol product” refers to an alcoholic product that is marketed with a similar brand name, logo, or packaging of an existing non-alcoholic brand. Examples include well-known brands of juice, soda, iced tea, iced coffee, and other beverages, which often have the word “hard” or “spiked” in the name. These crossover products have recently been increasing in availability across the United States, which has caused concerns related to public health and safety.

What are the concerns?

A main concern about these products is the similarity to their non-alcoholic counterparts. In many cases, the packaging and labeling designs are nearly identical which could cause confusion among consumers, or perhaps even accidental product selection and purchasing. A related concern is the placement of crossover alcohol products in retail stores. If crossover products are placed near their non-alcoholic counterparts or other non-alcoholic products, this may also cause confusion among consumers about which product they are selecting and purchasing. However, since these products are so new, there has not yet been research conducted on the impact on consumer choice and preference.

A major concern is crossover product appeal to youth. Youth are large consumers of the non-alcoholic counterparts. The 2023 Healthy Youth Survey found that 86% of Washington 10th graders reported drinking a sugar-sweetened beverage in the past week. It is possible that exposure of these crossover beverages, particularly those that use the same brand or logo as what they currently drink, may play a role in youth appeal. Research has shown a link between alcohol advertising exposure and substance use among young people.

Beyond familiarity with product brands, crossover alcohol products also tend to use many of the same non-alcoholic packaging and labeling elements that have been shown to be especially appealing to youth including cartoons, bright colors, images of fruit and other flavors, and other elements used to market juice, soda, lemonade, iced tea, and other non-alcoholic beverages. However, more research is needed to better understand how crossover alcohol products specifically may impact youth perceptions and risk for use as these products become more available.

What is being done?

In the absence of current research, some states have taken the lead in a proactive approach to regulate crossover alcohol products. Illinois and Virginia have both issued rules related to crossover alcohol product placement in retail stores, labeling, and signage with the goals of preventing confusion among consumers and limiting appeal to youth. In addition, a recent industry coalition commitment in June 2024 also focused on strategies to limit consumer confusion and avoid advertising and marketing to people under the age of 21.

In summary, crossover alcohol products have quickly expanded which has caused concerns related to consumer confusion and youth appeal. While a few rules and commitments have been issued, comprehensive regulation and guidance is currently lacking. Additional research is needed on how crossover alcohol products impact public health and safety.

A “crossover” product is the alcoholic version of a traditionally non-alcoholic product. Soft drink and juice producers along with alcohol suppliers have introduced many of these products within the last year.

While these products are gaining in popularity, there is concern that the crossover products may potentially be confused with their non-alcohol beverage counterparts. Crossover brand products often retain many of the same branding elements and consumer recognition as their non-alcoholic beverage counterparts.

Keep Customers Informed

In order to avoid any consumer confusion, retailers are encouraged to take measures to ensure that crossover products are merchandised in a manner that makes it clear that they contain alcohol.

Retailers can do this by:

• Separating products containing alcohol from those without alcohol.
• Do not display or promote crossover brand products in a manner that could create confusion with their non-alcohol beverage counterparts.
• Use signage easily visible to the consumer to identify products that contain alcohol.
• Keep all alcohol products in a separate section that is away from child-friendly items (such as candy and toys). Do not use endcaps located at the end of aisles with kid-friendly items.
• If using endcaps, do not include non-alcohol products in this area, and use signage easily visible to the consumer to indicate the products contain alcohol.
• Keep mini-bottles (airplane size) either behind a counter or in locked cabinets to prevent theft. Do not place them loosely in bins or baskets near check-out stands and exits.
• Keep alcohol products away from areas with easy-to-access exits — especially products that can be concealed and stolen.
• If feasible, apply security monitors to alcohol products that alert when products leave the store without being purchased.
• If possible, program crossover brand product barcodes to indicate that they contain alcohol when they are scanned at checkout so that the retail outlet employee confirms that the customer is of legal drinking age.

Retail employees are encouraged to get training to differentiate crossover brand products and packaging from their nonalcoholic counterparts.

Preventing Youth Access

Social media has shown us that when at a self-checkout aisle, a person under 21 has two canned products: one crossover product, and one non-alcohol beverage counterpart. The underage person scans the non-alcohol version twice, pays for their products, and leaves the store. It appears to be a compliant sale however, the person under 21 has now left the store with an alcoholic product.

Preventing underage use and adult misuse of alcohol is a primary objective of our mission. There are known dangers of underage drinking, including the impact on the developing brain and the increased risk of poor decision-making, injury, and even death. Product confusion can also create increased risk when consumers are not aware a product contains alcohol.

Earlier this year, the Board amended WAC 314–17–105 expanding class 13 permit allowances. Class 13 permit holders may now open and pour beer or wine into a customer’s glass, away from the table, as long as it’s not in a minor-restricted area. Before this change, they were only allowed to pour at the customer’s table. They are still not allowed to pour from a tap.

We are quickly approaching our busy season for special occasion license applications. We would like to share a few reminders about donating alcohol to a nonprofit organization (NPO) who has a special occasion license. A special occasion license allows a NPO to sell alcohol at an event that is open to the public. If the NPO is registered as a 501©3 or 6, they may accept donated alcohol from a winery, brewery, distillery or a spirits distributor.

Only non-retail licensees may donate alcohol to NPOs. If an NPO approaches you for donations of manufacturer-sealed bottles of alcohol, you may only donate under the following conditions:

• You are licensed as a winery, brewery, distiller, or a spirits distributor. Retailers cannot donate bottles of alcohol.
• You have verified the NPO holds a special occasion license, or are in the process of applying for one. You may not provide the alcohol until you see a copy of their special occasion license.
• You have verified that they are a 501©3 or 6 with the IRS. Remember that any type of NPO can apply for and receive a special occasion license, but they must be a 501©3 or 6 to get donations of alcohol.
• Wineries, breweries, and distilleries may only donate alcohol that the licensee manufactures themselves.
• If you are a spirits distributor, you may donate spirits that you distribute on behalf of the manufacturer.
• The same rules apply if you are donating a gift certificate for a “tasting” experience.

What can a licensed alcohol retailer donate to a special occasion licensee?

Licensed retailers may only donate gifts that are not related to alcohol. Donating alcohol directly to another retailer (which a NPO is when they hold a special occasion license) is prohibited by law.

Reminder that if an NPO would like to have a fundraising event at a liquor licensed premises and the NPO would like to sell their own alcohol, they are required to have a special occasion license. Alcohol from the licensed premises must be kept separate and cannot be sold to the event participants during the hours of the special occasion license.