Fintech’s Competitive Market Analysis [CMA], which provides data from beer, wine, and spirits sales to suppliers across all tiers, reveals the “ready-to-drink” RTD beverage category’s steady incline in the alcohol market. CMA utilizes exclusive data from IRI, one of the leading consumer data aggregators, to provide actionable insights to alcohol suppliers.
Innovation in this sector has led to the development of an array of spirits-based premixed cocktails, wine spritzers, and hard seltzers. Consumers can find malt-, wine-, spirits-, and cider-based options to fit their ever-changing preferences.
Let’s dive into the CMA data to examine how these canned cocktails have evolved in the world of off-prem alcoholic beverages.
Leading the Pack
Premixed cocktails, which include spirits-based RTDs, are the undeniable titan of the bev alc category. In 2021, supplier revenue from premixed cocktails hit $769 million. 2022 year-to-date [YTD] dollar sales are approximately $922 million, marking a dollar sales trend of approximately 68% vs. last year.
(Note: This data includes both multi-outlet and convenience stores in the United States)
Premixed cocktails/spirits-based RTDs outpaced tequila/mezcal, Irish whiskey, cordials, and single malt scotch as the fastest-growing spirits category. While tequila was predominantly the preferred spirit base, vodka-based RTDs took the top spot.
When looking at dollar share by price segment, the bev alc category’s Tier 2 ($5 – $9.99) makes up 52%.
There have also been marked improvements in volume. CMA is showing a volume sales trend of 62% vs. last year. The rise in RTD offerings from more well-known spirit brands is undoubtedly a result of how well this bev alc category is performing.
DISCUS Survey Reveals Consumer Behaviors
A recent report from the Distilled Spirits Council of the United States (DISCUS) that pulls from a survey of 2,000 consumers conducted by Public Opinion Strategies (POS) reinforces RTD cocktails’ increasing market position by revealing consumer insights.
Roughly two-thirds of survey respondents consider themselves regular consumers of RTDs. 55% of respondents said they prefer spirits-based beverages over other flavored malt beverages or wine-based cocktail options.
What were the reasons for this preference? Taste and quality.
Consumers indicated that RTDs have better taste and flavor options. They also appreciate that they are made with real spirits as opposed to other malt- and wine-based versions. The spirits-based category is finding success through brand recognition and a wide range of offerings that include classic cocktail options like rum and coke, margaritas, rum runners, and many more.
- 94% of respondents choose RTDs because of their preferred flavors
- 88% of respondents choose RTDs because the taste is similar to their favorite spirits beverages
- 83% of respondents choose RTDs because they recognize the brand
- 82% of respondents choose RTDs because they “taste better than beer”
- 92% of respondents choose RTDs based on their convenience
Consumers Looking for Greater Access to RTD Options
With more and more consumers looking to RTDs as an option, they want to be able to choose them in other convenient locations. A majority of survey respondents said they would like to see spirits-based RTDs available at more bars, restaurants, concert venues, grocery stores, etc.
Alcohol regulations limit the availability of ready-to-drink beverages in some channels. There are currently 47 states that allow malt-based RTDs to be sold at grocery stores, however, 16 of those states prohibit the sale of spirits-based RTDs. Control states like North Carolina, Alabama, and Pennsylvania sell spirits-based RTDs at state-run stores while their malt-based counterparts are more widely available.
States are opening up to the concept of permitting spirits-based canned cocktails to be sold in retail outlets that also sell beer and wine. Michigan (2021), Mississippi (2020), and Iowa (2019) have passed laws permitting spirits-based RTDs to be sold alongside beer and wine in certain retail outlets.
Look for Continued Growth in 2023
Alcohol suppliers will aim to meet consumer demands by rolling out more spirits-based RTD options in the future. With the increasing market share, there is too much left on the table by not engaging more with the popular bev alc category. It will be interesting to see both the addition of more spirits-based RTDs and the expansion of alcohol laws pertaining to RTD sales.
Fintech’s Competitive Market Analysis tool (exclusive IRI data)