Every spirits producer worth its salt now has a flourishing RTD portfolio. Diageo’s range includes RTDs using Ketel One, Tanqueray, Smirnoff, Pimm’s and Gordon’s as the base, but it is also buying up smaller producers.
Earlier this year, it snapped up hard seltzer brand Lone River Ranch Water and vodka-based RTD producer Loyal 9 in separate deals. “Loyal 9 hits an RTD sweet spot, merging American consumers’ growing appreciation for better quality ingredients with the full-flavour lemonade they love, and a classic Americana feel,” says Diageo North America president Debra Crew.
“We have a clear strategy to build and diversify our RTD offerings across price points and consumer segments, and Loyal 9 is a great addition to our portfolio.”
This month, Diageo Australia has launched Reeip Drinks Co, a spiced rum RTD brand that will donate 10% of profits towards regenerating the Great Barrier Reef.
Zamora Company has also started to carve out a slice of the RTD category. It has launched Licor 43 RTDs in The Netherlands, Germany, Mexico, Finland and Belgium, tailoring its offering to the various different markets.
Julian Fernandez, global marketing & innovation director for spirits, says that RTDs “help us to talk to younger consumers – Millennials and Generation Z are more into them”. He believes that eschewing gimmicks and creating quality liquid will be paramount to long-term success in this sector.
“We never did an RTD before, and we did not want to make any compromises on taste, so it took some time to develop the liquid. They are all based on natural ingredients. Sales have been way higher than we expected, and way above the market average.
“I believe the growth trend for RTDs will continue this year. Many brands are entering the category. There is a lot of innovation.”
Yet he also expects a shakeout as the category reaches saturation point. “In 15 months’ time, there will be some brands that will disappear. Consumers will look for more interesting, premium, high-quality concepts from established brands, with new and exciting flavours.
“That is why we are creating RTDs with high-quality, natural ingredients, which are delicious and offer convenience. We are creating brands that will still be relevant to consumers in five years’ time. The secret to Licor 43’s success during our 75-year history is our capability to continuously adapt to changing consumer needs. We are here for the long term, and we will continue to launch new RTDs in future.”
