Ready to drink used to be a descriptor, applicable to only a narrow portion of the alcohol industry. This has changed radically in the past few years. RTDs now dominate a portion of the beverage business, while innovation continues to drive this category forward with no signs of slowing.
What do RTDs mean to your business? Here’s an update on the genre and a few of the up-and-coming trends within the ready-to-drink sector.
RTDs: A Clash of Definitions
The term “ready to drink” has historically referred to pre-mixed cocktails — drinks with alcohol percentages in the double digits that feature a base spirit such as vodka or tequila. But in recent years, RTDs have undergone a shake-up as hard seltzers have taken hold with consumers.
There is still some debate if hard seltzers should be classified as RTDs, as the category definition of hard seltzer has yet to fully solidify. It’s worth noting that consumers care little for the semantics of the term, as hard seltzer brands such as White Claw and Truly thrive, and spirits industry titans such as whisky brand Crown Royal venture into the RTD market.
In fact, Crown Royal’s parent company, Diageo, recently invested $110 million in expanding its RTD operations. “Crown Royal anticipates that the RTD category will only continue to gain momentum in the United States as consumers desire high quality and premium options, in the convenience of a can,” says Nicky Heckles, vice president, Crown Royal Whiskey. “We have seen the RTD category grow 20% between 2016 and 2019.”
To stay on top of this growth, the company has released a number of new RTD offerings. In March 2021, Crown Royal released ready-to-drink cocktails in three flavors: Washington Apple, Whisky & Cola and Peach Tea, Heckles says. This past spring, Crown Royal made these offerings available nationwide, and also launched its new Whisky Lemonade, available for a limited time in select markets.
At 7% ABV, Crown Royal’s RTDs fall somewhere in the middle of the spectrum. On the lighter end, Deep Eddy Vodka has introduced Deep Eddy Ruby Red + Soda and Deep Eddy Lemon + Soda, vodka-based hard seltzers that are 4.5% ABV.
For customers seeking a stronger beverage that’s ready to drink, Buzzballz offers a wide range of flavors at 15% ABV. “Recent flavor innovations for the BuzzBallz brand include Chili Mango, Espresso Martini and a seasonal Eggnog,” says Tia Wines, director of marketing.
Good for You, Good for the Environment
The RTD trend has coincided with the craft beverage trend, and both have moved towards marketing to health-conscious Millennials and Gen Z consumers.
“The RTD market has evolved to pre-mixed cocktails that use real ingredients,” says Sean Eckhardt, senior vice president and managing director of sales, Bacardi North America. “The Bacardi Real Rum Canned Cocktail range uses Bacardi Superior as the base spirit with real sugarcane and all natural flavors.”
This trend of “better-for-you” drinking now runs full force through the RTD category. For instance, take the canned cocktails from Sagamore Spirits, launched last summer.
“Our canned cocktails were developed to showcase the best of Maryland rye [whiskey] by being approachable and versatile, while letting natural ingredients in classic cocktail combinations shine through,” says Brian Treacy, Sagamore Spirit’s cofounder and president of distillery operations. “Each recipe is made with Sagamore Spirit’s 4-year-old straight rye whiskey, organic juices, and is naturally gluten-free.”
RTDs also now reflect broader alcohol trends in sustainablilty, like packaging and production/ingredient certifications.
Drake’s Organic Spirits brought the convenience of boxed wine to the cocktail arena, using only organic ingredients, as well as sustainable packaging, says Mark Andersen, CEO and cofounder of Drake’s Organic Spirits. “Like all the other Drake’s products, Drake’s Boxtails hold ‘the big 5’ certifications: USDA Organic, Non-GMO Project Verified, OU Kosher, certified vegan by Vegan.org and certified Gluten-Free by the Gluten-Free Organization,” he says.
Along with being health conscious, being eco-conscious is now important to many consumers. This means that sustainability has become a critical discussion point for many companies.
“It is no secret that sustainability is now a huge trend: Consumers read labels, care about what they put into their bodies, and are looking for better premium options,” says Anderson. “They want all-natural, sustainable, organic products, and they want proof that they are getting what the packaging advertises.”
RTDs Stealing the Spotlight
With all this growth, many consumers wonder if RTDs will steal away market shares from beer, wine and spirits. Andersen, for one, thinks they will.
“Yes, the RTD cocktail category was already growing before Covid-19, and pandemic lockdowns accelerated that growth driven by consumers’ desire for at-home cocktails that are high-quality, easy-to-enjoy and highly portable. The RTD category keeps its growing momentum and is enjoying a rapidly increasing market share, while beer and wine sales are falling.”
But Will Patch and Kevin O’Leary, cofounders of the new RTD brand Cape Cod’r, disagree:
“We wouldn’t say that RTDs are stealing market share, because there will always be consumers looking more specifically for their favorite liquors, beers and wines. There is an ideal time and place to consume all of these products. Consumers typically want to diversify what they consume, so some days they might be in the mood for a bottle of wine and other days, they’ll want to grab a ready-to-go canned cocktail.”
Others consider RTDs as a way of introducing consumers to stronger spirits.
“At Sagamore Spirit, our goal is to offer a beverage option for all whiskey drinkers,” says Treacy. “Canned cocktails are a great way to introduce curious consumers to rye whiskey. Then, they might eventually try our core products down the line. Ultimately, it comes down to the consumer and their personal habits.”
What Consumers Want
Flavors and ingredients are certainly important, but most RTD brands agree that convenience is the name of the game when it comes to ready-to-drink products.
“Consumers are looking for great-tasting cocktails that are convenient and affordable,” says Buzzballz’ Wines.
“Just like flavored vodka, canned cocktails are an easy way for consumers to trial the category and brand,” says Hannah Venhoff, product director at Heaven Hill.
“Now more than ever, people want to bring the premium experiences they crave with them wherever they go,” says Crown Royal’s Heckles. “Knowing that, it means embracing the occasions we look forward to, whether that be relaxing in front of the TV or enjoying time in the backyard.”
Crown Royal ready-to-drink cocktails, she says, suit every one of those moments, “bringing that joy of convenience along with the premium whisky we love.”
“RTDs are highly portable and convenient for outdoor gatherings,” agrees Andersen of Drake’s Organic Spirits, “and the single-serve feature prevents consumers from sharing glasses and bottles, which is important regarding pandemic health concerns.”
The pandemic lockdowns certainly helped to accelerate the ubiquity of RTDs, according to Paul Rene, vice president of North American Sales for Geloso Beverage Group.
“The era of Covid changed how consumers were purchasing and enjoying alcoholic beverages,” he says. “During a time when people were directed to stay at home, consumers were looking for easy to make cocktails that didn’t require a bartender.”
Brands looking to capitalize on the RTD trend must constantly innovate and excite consumers. Luckily, the field is vast, with many opportunities for original products and twists on familiar classics.
“Geloso Beverage Group released Buzz Tea, an all-natural hard iced tea at 6.5% ABV. Buzz Tea comes in three refreshing flavors that include Original, Half & Half, and Peach,” says Rene. “Additionally, Johny Bootlegger, a Prohibition-inspired malt-based beverage, released a new flavor called Fox Hole Fruit Punch.”
Sagamore Spirits has also been continually evolving in its offerings. “We released our first line of ready-to-drink cocktails in August of 2021 in three bold flavors: Black-Eyed Rye, Honey Paloma, and Lemon Tea Fizz,” says Treacy.
The big spirits brands such as Bacardi have not been resting on their laurels either.
“We’re seeing particularly strong growth for RTDs with natural and refreshing flavors like the Bacardi rum canned cocktails, Bombay Sapphire Gin and Tonic and Cazadores 100% agave tequila,” says Eckhardt.
“We’ve just released a series of new flavor additions to our popular full-flavored, delicious, and well-balanced Bacardi Real Rum Canned Cocktail range in time for the summer season — including a new Bacardi Pi–a Colada.”
Smaller companies are stepping into the spotlight as well. Cape Cod’r debuted with four new flavors, two of which use white rum as a base spirit.
“We thought that white rum was underrepresented and developed two flavors, Perfect Storm and Ocean Breeze, looking to provide our consumers with more variety on the shelves,” say Patch and O’Leary.