RTD sales hit $10.6bn in US off-trade

The ready-to-drink (RTD) sector surpassed US$10 billion in sales in the US off-trade over the past year, according to a new report.

Data analyst NIQ released a mid-year update on the RTD and ready-to-serve (RTS) categories in the US off-premise, covering the year ending 7 August 2023.

NIQ defined RTDs as single-serve or two-serve offerings, including hard seltzers, flavoured malt beverages (FMBs), spirit-based canned cocktails, wine sold in small formats, and wine-based cocktails.

The report found that the off-premise RTD sector reached US$10.6bn in sales in the last 52 weeks, an increase of 7% versus a year ago when sales were at US$9.9bn. RTDs represent 11.7% of total alcohol dollar sales.

In comparison to other alcohol categories in the off-trade, the total RTD and RTS category (US$10.9bn) is ahead of craft beer (US$5.8bn), vodka (US$4.5bn), FMBs (US$4.4bn), American whiskey (US$4bn), hard seltzers (US$4.4bn) and Tequila (US$3bn).

Vodka saw a 0.8% drop in the US off-trade in the past year, while American whiskey and Tequila rose by 3.1% and 7.2% respectively.

NIQ noted a sales peak for RTDs in the summer and key holidays, including 4 July.

The convenience channel contributed a large portion of growth for RTDs, taking a share of 46%.

Spirit-based RTDs and FMBs were the main growth drivers, up 55.4% and 21.1% in the past year respectively. Wine RTDs rose by 3.3%.

Hard seltzers, however, declined by 14%.

FMBs’ share of the RTD category at 41.1% overtook hard seltzers at 35.8%. Spirit-based RTDs represent 14.4% of total RTDs, while wine RTDs took a 8.7% share.

Ranch water seltzers increased by 18.8% to US$96.3 million in the last 52 weeks, while blackberry-flavoured seltzers soared by 177.7% and orange-flavoured seltzers rose by 42.7%.

Five US states account for more than one third of RTD sales: California, Florida, Texas, Ohio, and New York.

NIQ said the RTD category is ‘looking bright for the remainder of 2023’, as well as the next four to five years.

The report said that premium RTD offerings, as well as those with functional benefits, will see some of the best growth in the second half of this year and in 2024.

RTS insight

Meanwhile, the RTS category, covering pre-mixed spirits-based cocktails in large-sized formats, reached US$300.5m in the off-trade over the past year – a slight dip of 0.1%.

The RTS sector represents a small portion of total spirits sales at 0.3%.

RTS products are popular during holidays such as Cinco de Mayo, 4 July, and the festive period, NIQ noted.

The report said that producers are launching new RTS products to ‘meet the needs of consumers who want to impress guests’, including premium Tequila brands creating Margaritas. It also highlighted Spritz cocktails from brands and celebrity offerings.

US e-commerce platform Drizly revealed 60% of the 20 most popular products released in April, May, and June came in a single-serve format.