Ready-to-drink (RTD) cocktails are continuing to gain traction in the alcohol industry, with sales showing no signs of slowing down. According to a report from alcohol ecommerce platform Drizly, RTD products represented 2.8% of sales in the past 12 months—up from 1.1% in 2020. This growth is impacting not only hard seltzers, which had 3.6% of sales in 2020, but traditional spirits as well.
Ready-to-drink (RTD) cocktails are continuing to gain traction in the alcohol industry, with sales showing no signs of slowing down. According to a report from alcohol ecommerce platform Drizly, RTD products represented 2.8% of sales in the past 12 months—up from 1.1% in 2020. This growth is impacting not only hard seltzers, which had 3.6% of sales in 2020, but traditional spirits as well.
“Though it is difficult to say for sure, the correlation between the rise of ready-to-drink share with the declining share of hard seltzer in the past year is clear,” Liz Paquette, Drizly’s head of consumer insights, wrote in a report this month. According to Paquette, three top attributes consumers seek in RTDs are high quality, easy to enjoy and highly portable.
The average unit price of RTDs on Drizly over the past 12 months was $13.80, up 9.5% from the $12.60 average sale price seen the previous 12 months. This premiumization has defined the trajectory of the RTD category, which now has a 6.2% percent share in the overall spirits category on the platform. The top four RTD brands on Drizly have remained the same since 2021: High Noon (E. & J. Gallo), Cutwater Spirits (Anheuser-Busch), On The Rocks (Beam Suntory) and privately held Jose Cuervo.
On the retail side, spirit sales have substantially lagged those of RTD drinks since January, according to channels tracked by NielsenIQ. Investment firm TD Cowen noted in a report issued today that “while growth in prepared cocktails presents opportunities for the major spirits operators, they also represent a competitive headwind” as RTDs “may be displacing higher-margin spirits occasions.”
Paquette believes the RTD category has staying power and its share will continue to increase. “It is a small but growing piece of the total liquor category and we believe there is still room for continued growth,” she wrote.
With consumer demand for RTDs showing no signs of slowing down, it appears the category is here to stay. As the major spirits operators continue to capitalize on the trend, it will be interesting to see how the RTD category evolves in the coming months.
Sources: https://www.mediapost.com/publications/article/385721/ready-to-drink-cocktail-sales-still-growing-in-d2c.html
