Pernod Ricard: ‘We foresee the RTD category evolving in the same way cocktail trends evolve’
In particular, the company believes it can win in the RTD category with products that offer a premium edge. So how is it crafting a portfolio that succeeds both in terms of convenience and premiumization?
In the US, its RTD drinks draw on its key sprit brands: such as Absolut Vodka Sodas, Malibu Cocktails, and Jameson Ginger & Lime.
Sales are booming this summer
Sales of RTD alcohol over the Memorial Day weekend – a key indicator for the coming summer – showed RTD alcohol sales excel. The percentage share of the RTD subcategory surpassed that of the hard seltzer category on Drizly for the first time over the weekend (RTDs holding a 4.8% share against hard seltzers’ 4.4%).
“Pernod Ricard sees tremendous value in RTDs,” Natalie Accari, Vice President RTDs & Convenience Pernod Ricard North America, told BeverageDaily.
“This is one of the fastest growing spirits categories, and we’re still seeing new consumers discovering this trend and finding drinks they love. Last year, Drizly reported a 45% increase in the RTD category and we expect the category to double in size by 2025. The spirits-based RTD segment could even hit 100 million cases per year in the same time frame.
“With people back to enjoying time together and summer entertaining top-of-mind we anticipate RTDs will continue to grow especially as consumers experience our new offerings.”
How do you make an RTD premium?
The growth of the RTD alcohol category has been based on products’ convenience and portability. And yet this jars with other alcohol industry trends that emerged during the pandemic: such as a desire for customized, high-end fancy cocktails crafted either at home or at the bar. So why hasn’t this proved a sticking point for the category to date?
Accari says the company is well aware of this challenge. Premium cues range from the artwork on the packaging to the very use of the well-established, big-name premium brands.
“At Pernod Ricard, this is a key point that we’ve aimed to address across our brands. We’re known for premium spirits that provide the highest quality cocktails and we carry that through everything we do. From our first RTD, we’ve continued to focus our innovations on providing consumers with bar-quality cocktails all with the pull of a tab. Recognizing all of this, we’ve formulated our blends to match the thoughtful craftwork produced at the bar or the creativity of the at-home cocktail experience in the kitchen.
“Our dedication to the details is reflected in our recent cocktail RTD launches. Together, we strive to create an RTD that not only brings a delicious cocktail to life, but also offers a one-of-a-kind experience as well.”
In other words, the company has developed its RTD portfolio with the goal of providing bar quality cocktails with the convenience of a can format, says Accari.
“Starting with brands our customers know and love, we made our Absolut Vodka Sodas and cocktails perfect for consumers looking for a lightly sparkling ready-to-drink experience without having to fuss over a recipe. Last year, we launched our Malibu Cocktails in a can for customers looking for tropical and refreshing flavors with Piña Colada and Strawberry Daiquiri. Consumers responded so well that we expanded our flavor offerings to Pineapple Bay Breeze and Watermelon Mojito.
“In March of this year, we released our Jameson Ginger & Lime – the first-ever RTD for Jameson and first Irish Whiskey RTD in the US. This was inspired by one of our all-time fan-favorite recipes made with natural ginger and lime flavors and our smooth Irish Whiskey to create a tasty, convenient offering that can be enjoyed by a wide range of whiskey fans, including whiskey-curious consumers.
“We’re excited for consumers to try the range of RTDs in our portfolio for their summer drinking occasions (and any time of the year) and enjoy convivial moments with family and friends. We look forward to the future of this category and bringing more familiar cocktail flavors and premium offerings to consumers in this portable format.”
On-premise opportunities?
So what’s next for the RTD category? Accari believes the focus on premium will only get more important: with variety, excitement and quality ingredients being of upmost importance.
“With the warmer months, we expect to see heightened demand for a diverse offering of ready-to-drink cocktails made with premium spirits and delicious flavors. We foresee the RTD category evolving in the same way cocktail trends evolve. Just as bars across the US are inspired by consumer interest in fresh juices, high quality ingredients and creativity, so are we.
“Some of our newest launches, such as our Malibu Pineapple Bay Breeze and Watermelon Mojito Cocktails in a can build on these fresh fruit and tropical flavors and deliver creative ways for consumers to enjoy their favorite brands in the summer sun, or any season.”
At the moment, Pernod Ricard is focused on the off-premise: where convenience for occasions such as picnics or BBQs is key. But the Accari says the company is tracking where opportunities could arise in the on-trade.
“As consumers return to bars post-COVID we will monitor what consumers are looking for pivot if the opportunity presents itself.
“As drinks-to-go at restaurants and bars are legalized across the country, RTDs are an opportunity for bar and restaurant operators to expand their offerings. These are also an especially convenient option in locations like theaters, hotel minibars and event spaces where there may or may not be a full bar.”
