Premium potential: ‘The RTD alcohol category will unshackle itself from the bright, sticky and cheap concoctions that defined its birth'
Premiumization has been sweeping across the overall spirits category. This was driven further forward by the pandemic: faced with lockdowns and stay-at-home orders, people spent time at home experimenting with cocktail creations and learning more about the spirits they enjoy.
The result is a new set of alcohol connoisseurs who want high quality drink experiences: driving ‘a wave of premiumization across spirits categories’. And this applies just as strongly to canned cocktails as consumers seek to marry the convenience of the format with their newfound expectations on quality.
'It isn't just spirits in bottles undergoing a premium revolution!'
The growth of RTD alcohol is well documented. According to the Bacardi Consumer Survey 2021, 14% of consumers tried RTDs for the first time during the last 12 months, with Nielsen revealing that the spirit-based RTD market alone surged 132% over the same period.
IWSR Drinks Market Analysis estimates the RTD category will increase its market share to 8% of the total alcohol sector by 2025 across 10 key markets, up from a 4% market share in 2020.
What’s notable about this new wave of RTDs, however, is that it is increasingly bringing a host of more upmarket options to the table: mirroring wider trends across the spirits and alcohol category. That could mean the choice of flavors, packaging designs, choice of ingredients, calorie count and emphasis on the quality or brand of the base spirit.
Bacardi research shows that 41% of consumers globally expect to be drinking RTDs in 2022.
In the US, 80% of consumers plan to drink RTD cocktails in 2022; as do 66% in India; 56% in South Africa, 51% in the UK, and 47% in Israel.
“It isn’t just spirits in bottles undergoing a premium revolution,” notes Bacardi in its 2022 Cocktail Trends Report.
“Ready-to-drink (RTD) options have moved on from those available in the 1980s and 1990s. A focus on natural, low-calorie, and sophisticatedly flavored RTD options is emerging to meet the needs of discerning drinkers, who also want a great-tasting cocktail wherever they would like to have it.
“People are gravitating toward premium prepared cocktails because they desire quality spirits, convenience, and portability. These latter characteristics proved integral to RTD growth in 2021 as the world became used to drinking outside or at home, and social occasions evolved.
“The RTD phenomenon is set to grow further as offerings become increasingly focused on spirit-based prepared cocktails, moving beyond the initial popularity of malt-based and hard options.”
'The more premium, the better'
So what kind of RTDs are resonating with consumers?
“As the fastest-growing segment within the RTD category, spirit-based RTDs represent the go-to option. But, importantly, it’s a case of the more premium, the better, with RTD offerings improving vastly in terms of quality.”
For Bacardi, that means increased interest in options such as Bacardi rum canned cocktails; Bombay Sapphire G&T; Plume and Petal vodka RTDs and Cazadores 100% agave tequila RTDs.
What's your vibe? pic.twitter.com/k9r5opnDwr
— Bombay Sapphire (@BombaySapphire) August 27, 2021
Perhaps most importantly, Bacardi suggests that premium RTDs could square up to hard seltzers: a category that has stolen the headline with its meteoric growth and yet often is not considered a premium product.
“The importance of the presence of premium spirits is brought into focus when comparing the performance of RTDs with other convenient options such as hard seltzers. RTDs’ market share is growing at 15x the rate of hard seltzer’s share, according to spirits e-commerce delivery platform Drizly, showing just how vital premium spirits, as well as the associated quality and taste, are in the market.
“The RTD category will continue its ascent in 2022 as it unshackles itself from the bright, sticky, and cheap concoctions that defined its birth. Look forward to beautiful packaging, challenging flavor profiles, and quality ingredients superbly calibrated for maximum enjoyment.”
Another area premium RTD alcohol could make its mark in is the on-premise: with availability of options likely to increase as the market matures.
