In recent years, the alcohol industry has witnessed a remarkable surge in the popularity of ready-to-drink (RTD) alcoholic beverages. Despite malt-based RTDs still dominating the U.S. market with a substantial 91% share by volume, spirit-based RTDs have experienced a remarkable 53% growth in 2021, surpassing the growth rate of both wine and malt-based categories, according to market research from IWSR.
This surge also shows no signs of slowing down, with RTD beverages having surpassed tequila and mezcal as the fastest-growing spirits category in 2022 by revenue. Let’s take a closer look at this growth and what’s fueling it.
How it all started
In the United States, the RTD segment experienced a significant surge in sales during the early years of the pandemic when customers were forced to choose between either learning how to make cocktails themselves or embracing the RTD options.
Around this time hard seltzers were also emerging as a favored choice among health-conscious consumers due to their lighter profile, offering lower calorie content and minimal sugar and carbs. This “healthier” alternative within the flavored malt beverage category found additional traction through its convenience factor, making them a go-to for younger generations. This new beverage niche would lay the groundwork for the entry of spirits-based RTDs.
Spirits-based RTD growth
Since the beginning of the pandemic, the spirits-based RTD category has seen incredible growth. Data from NielsenIQ revealed remarkable year-over-year growth for spirits-based hard seltzers, which saw a staggering 156 percent increase in off-premise dollar sales from 2020 to 2021. Concurrently, RTD cocktails also witnessed substantial growth, with sales rising by an impressive 126 percent during the same period.
This momentum continued into mid-2022, as NielsenIQ reported another notable boost in the dollar growth of spirits-based hard seltzers, rising by an additional 73 percent year-over-year. RTD cocktails, tracked separately, maintained their upward trajectory with a solid 61 percent growth during the same period.
Source: NielsenIQ: The Current Biz of RTD Fizz
What’s fueling this growth?
Convenience culture
One of the primary drivers behind the increasing demand for RTD beverages is the rise of convenience culture. In today’s fast-paced world, consumers seek products that can easily fit into their busy lifestyles.
RTD beverages offer the perfect solution for those who want to enjoy a cocktail without the hassle of mixing multiple ingredients or visiting a bar. Their portability and ease of disposal makes them a reliable go-to for a wide variety of environments.
Flavor variety
The surge in spirit-based RTD beverages in the US can be largely attributed to the wide array of flavor options available on the mark. Flavors play a central role in consumers’ decision-making when it comes to choosing RTDs, and spirit-based options have a distinct advantage in offering a diverse selection of familiar cocktail flavors and taste profiles.
A notable illustration of this trend can be seen in the lineup of Cutwater Spirits Canned Cocktails, featuring four variations of the common margarita, a White Russian, a Mojito, and several other well-known drinks.
Premiumization
Across all spirits categories, consumers are demonstrating a willingness to pay more for premium options. Many consumers are transitioning from malt-based hard seltzers to spirit RTDs, driven by a desire for a more premium drinking experience while still enjoying the convenience, simplicity, and portability that RTDs offer.
POS polling from the Distilled Spirits Council of America found that 55 percent of respondents prefer a spirits-based beverage to other malt- or wine-based options.
Source: Distilled Spirits Council of America, “Spirits-Based Ready-to-Drink Beverages Experience Tremendous Market Growth”
Which brands are selling best?
Drizzly released their top-selling RTD brands for this year so far:
- High Noon
- Cutwater Spirits
- On The Rocks
- Jose Cuervo
- Buzzballz
- 1800 Tequila
- The Long Drink Company
- NÜTRL
- Monaco
- Beatbox Beverages
For the past three consecutive years, High Noon has held the coveted No. 1 position on Drizly’s list of best-selling RTD brands. As of today, High Noon continues its reign, currently occupying an impressive seven out of the top 10 spots among the category’s highest-selling SKUs.
Learn more
Interested in learning more about what’s going on in the spirits industry? Check out our white paper—”5 Trends Impacting the Wine & Spirits Industry in 2023.”
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