World Spirits Report 2022: RTDs
If 2022 has proven anything, it’s that the soaring popularity of the ready-to-drink (RTD) category wasn’t just a flash in the pandemic pan.
Even though the global bar scene is almost back to ‘normal’, consumers aren’t willing to walk away from the convenience that RTDs have given them, and it’s causing the growth of the category to rocket.
“The pandemic saw more brands entering the RTD market as consumers looked for a solution that met the constraints of lockdown and social distancing, and the growth has only continued in 2022,” says Rob Wallis, co-founder of the Moth canned cocktail brand. Now as a result, he says “consumers are expecting more when it comes to quality, taste and range”.
Premium-priced RTDs have grown faster than any other segment over the past two years, and the demand is expected to keep driving the category forward, with value growth outpacing volume growth at a compound annual growth rate of 8% vs 5% from 2022 to 2026, according to findings from a longitudinal annual study by IWSR.
Airlines have turned to RTDs to boost their premium offering onboard, with Moth securing a deal to serve its canned Margarita on short-haul British Airways flights, and Tom Savano offering its newly launched canned expressions on Virgin Atlantic flights worldwide, and its 100ml Cosmopolitan bottles on all Lufthansa aircrafts.
In the fourth annual Bev Alc Insights by Drizly report, which surveyed more than 250 adults who manage or own an independent liquor store, 71% of respondents said RTDs and hard seltzers have permanently changed how and where they stock products, with 63% of the retailers polled saying they expect to carry more RTD inventory next year.
Kieran Gandhi, co-founder of south London’s dedicated RTD bar, Bō Kiri, has noticed a discrepancy between on- and off-premise consumption of hard seltzers in the UK: “I do think that we have a hard seltzer summer on the horizon – we’re on the brink of it – but the idea of having a hard seltzer on-trade just isn’t rocking and rolling like they thought it would.”
However, Gandhi is confident 2023 is going to be the year of hard seltzers: “After seeing the adoption at festivals and nightclubs, I think next summer is going to be big.”
The story is a little different in Ireland. According to CGA’s On Premise Measurement service, the category has seen a rapid take-up in the country, resulting in hard seltzers boasting a 6.4% value share of the RTD category in 2022, up a percentage point since 2019.
In the US, however, consumers have started to pump the brakes on the hard seltzer momentum, as they begin to trade up to spirit-based RTDs. The volumes of cocktails and long drinks are expected to overtake hard seltzers in 2025, and the segment’s value is forecast to increase by an additional US$11.5 billion in the next five years.
Brands to watch in 2023
With a portfolio expansion from five cocktails to eight, an airline partnership, and multiple new supermarket listings, there has been no stopping this British canned cocktail brand in 2022, and more success is expected to follow in 2023 as it looks to continue to elevate the experience for consumers. As rising costs affect the way in which people socialise, we expect that this innovative brand will be one that many turn to for high-quality imbibing at affordable prices.
Sibling founders Jill Burns and Kelly Gasink brought Austin Cocktails to the US market in 2014 when the RTD sector was still relatively small. Now the brand is distributed in 28 states, and grew by 135% in 2021. Following its acquisition by Constellation Brands this spring, the growth of this female-owned brand is expected to continue into next year. As the brand becomes integrated into Constellation’s Fine Wine & Craft Spirits Division, we can expect to see a lot from Austin Cocktails in 2023.
Pernod Ricard’s recent investment of US$22m into RTD expansion can only mean big things for its brands in 2023, and our eyes are firmly on Malibu. This year, the coconut-flavoured rum liqueur released a campaign in the UK to reposition the brand as a year-round drink. That campaign, teamed with RTD activations at UK festivals and beauty salons, demonstrated that it can be a drink for any venue, too.