Since 2019, the Ready-to-Drink category has seen a momentous surge in growth amongst numerous global markets. Market leaders in the creation of RTDs and canned cocktails such as White Claw and Bacardi are acquiring a return on investment from their changes to the category as health-conscious consumers and the recent pandemic has led to the market being driven by how we are living rather than what we are drinking.
According to Nielsen, the RTD segment saw a 40% increase in sales and its biggest growth in shares of sales year-on-year by 416% in 2020. This is largely due to the outbreak of COVID-19 that resulted in the closure of pubs, bars and restaurants for 17 weeks in the springtime and until further notice over the winter period.
With going out for a drink being temporarily unavailable as an option throughout most of the past year, retailers are reaping the benefits as consumers are increasingly turning to canned cocktails and RTDs to recreate what now seems like a nostalgic drinking experience at home.
Ready-to-drinks were predominantly known as pre-made, packaged beverages that are ready to enjoy from the moment they are taken off the supermarket shelves. The cans were originally crafted for consumers who were merely seeking convenience.
In the last year, a variety of established alcohol brands such as Kopparberg and Smirnoff have recognised the growing demand for RTDs and tapped into the market with their own take on canned beverages. Hard seltzers are particularly popular RTDs with brands including Bodega Bay, Mike’s Hard Seltzer and Smirnoff Seltzers recently dominating the market. With alcoholic cans in the form of hard seltzers and canned cocktails taking off, brands have also seen skyrocketing sales in their RTD versions of their spirit lines. According to The Grocer, the following products featured as the UK’s Top 5 RTDs during 2020:
So, how have RTDs evolved to become one of the most sought-after drinks product offerings to consumers?
Whilst RTD brands are focusing on paying homage to classic spirits such as vodka, gin, rum and whiskey, there is also a demand for higher quality ingredients and flavourings. Choosing the right botanical flavours is now an essential part of creating a canned beverage.
Infused botanicals such as elderflower, rose and ginger were the first ingredients to take the world by storm as consumers are becoming increasingly health-conscious and motivated to broaden their palettes.
It has become increasingly important for drink’s brands to attract consumer’s attention in an overcrowded market such as the ready-to-drinks category by differentiating their packaging designs. For the last decade customers have been looking for products that will make them stand out as consumers on social media. Creating a bold design on RTDs can go a long way as the products are purchased based on their aspirational properties as well as their ingredients. RTD brands such as White Claw are an example of this.
You could say that RTD drinks are a trend that is rapidly increasing due to the rise of the mindful consumer. Customers in the UK are becoming more health-conscious and do further research than they used to on what they are putting into their bodies. RTD drinks possess a low calorie density and low ABV offering, making them popular for their instantly refreshing and light nature.
In addition to being a low calorie and ABV option, canned cocktails and ready-to-drink products are jumping on the health bandwagon with natural flavourings and no added sugars. This has made the revival of RTD’s more popular and attractive to an array of consumer segments with it being positioned as a “better for you” product.
Based on our research, we can summarise that RTDs and canned cocktails have made a considerable dent in the drinks industry. The ready-to-drinks category is consuming market share for alcoholic drinks and is the epitome of differentiating a product in the market to gain competitive advantage. Brands that have jumped on the RTD trend are the perfect example of successfully reacting quickly to ever changing marketing culture, as the pandemic has resulted in businesses being forced to revolutionise their brands. Now more than ever, it has never been a better time to take advantage of the surge in demand for convenience and at-home drinking experiences.