The Evolution of Ready-to-Drink Alcohol and Spirits

The Evolution of Ready-to-Drink Alcohol and Spirits

The latest insights from Circana illuminate the shifting preferences in ready-to-drink (RTD) alcohol and spirits, with variety emerging as the cornerstone of consumer demand.

As the adage goes, variety truly is the spice of life, and this ethos is driving increased sales as spring and summer approach.

Leading the charge in driving innovation and diversity in RTD products are Gen Z consumers aged 21 and up. This demographic is pushing boundaries in flavor, format, and packaging, seeking novelty and variety across all beverage categories. Notably, Gen Z's influence extends to non-alcoholic offerings, with a focus on energy drinks, fruit flavors, and functional benefits.

Despite overall softening in the RTD category and hard seltzer sales, premium premixed cocktails and seltzers continue to thrive. Melanie Batchelor, Managing Director at Campari America, notes the evolution of RTD from a convenience proposition to an expectation of mixologist-level quality. In response, brands are prioritizing high-quality ingredients and intricate flavor profiles to meet consumer cravings for premium tastes.

Crossover products, where non-alcoholic brands venture into the beverage alcohol category, are gaining traction. Brands like Topo Chico, Beast Unleashed, and Jack Daniel's with Coca-Cola exemplify this trend, offering spiked versions of traditionally non-alcoholic beverages.

Campari is seizing this trend with offerings like the Aperol Spritz and the ready-to-sip Campari Negroni. Circana's data highlights the top RTD flavors, including variety packs, iced tea, black cherry, lemonade, margarita, and mango.

Interestingly, inflation has played a role in boosting sales in the RTD category, which remains relatively unaffected compared to other market segments. Premium categories continue to outperform value-based propositions, signaling consumers' willingness to invest in quality.

Looking ahead, the RTD market is poised for further growth, driven by its convenience and versatility. Batchelor underscores the surge in popularity as consumers seek on-the-go options that fit their lifestyles seamlessly. The market's potential extends to new distribution channels, such as convenience stores, opening avenues for increased market share and revenue streams for spirits brands.

As Gen Z matures and gains spending power, the RTD market is expected to expand. With variety as the catalyst, brands have the opportunity to capture the imagination of consumers and unleash the next wave of RTD innovation, collaborations, and summer sensations.

Source: Circana

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