Ready-to-drink cocktails is a constantly evolving category. These products were once a cheap alternative to going out, or something to drink on the way to an event or on the train. These occasions still exist, but brands are upping their game to produce more premium, booze-forward drinks that are available in many different retail channels. They’ve reached such a level of respect that bars are now stocking them, or even making their own, while low and no alternatives are also creeping up to compete with their counterparts in the mainstream.
The IWSR Drinks Market Analysis forecast that for global RTD market performance, volume compound annual growth rate (CAGR) 2022-2027 will be up 3% for the category, compared to +14% from 2017-2022. The category has its biggest dominance in the Americas with a 54% share by region of global RTD market volume (2022), with Asia Pacific having 30%, Europe 7% and the rest of the world 10%.
Pre-mixed in premium
The biggest trend currently for RTDs is that of premiumisation, as Moth Drinks co-founder Rob Wallis says: “It’s been a long under-loved category.” The sector has often been used to create drinks as cheaply as possible, without pushing them to be considered high-quality options in the cocktail world. Wallis adds that consumers are now asking for RTDs to be of a higher quality as post-pandemic expectations call for a more sophisticated offering.
Moth was recently revealed as the UK’s fastest-growing premium RTD brand, according to data by NIQ. “It sets us a challenge for next year, so we can do it again,” adds Wallis. “It validates what we thought has been true for a long time, that if you are honest with the consumer and you put quality at the centre of your brand, why wouldn’t you push for that?”
The co-founders of hard seltzer brand Served believe the quality of ingredients is another important factor for the modern generation. “While there is currently no legislation that forces RTD brands to declare their ingredients, the demand from consumers to understand what they are drinking will drive brands to detail their ingredients. In turn, this will lead to the use of higher-quality, natural ingredients,” they say.
More than a can
With RTD brands looking to match the quality of bar-made cocktails, bars are responding by investing in more pre-batched cocktails to replicate the speedy, convenient service of RTDs inside their venues. Wandering Barman is a New York bar which provides cocktails on tap, made with fresh ingredients, preserving the cocktails by removing oxygen from their packaging. Co-founders Roxane Mollicchi, Julian Mohamed and Darren Grenia say the bar was created to address “issues we had with the made-to-order cocktail bar” and that “customers have changed with many not having the patience to wait anymore”.
The bar also provides pre-mixed cocktails to other venues such as hotels and restaurants, giving them the ability to serve fresh cocktails easily when they may not have a system or the staff to do so. “Batching cocktails and putting them on tap allows us to serve them in seconds rather than minutes. Bars have been batching cocktails forever anyway, but it’s more important now. With staff shortages, for example, venues need to do whatever they can to make their bar programmes as efficient as possible,” says Grenia.
“Less cocktail-focused spots will be buying canned cocktails, which is why the majority of our volume is on-premise. It just makes sense all round, and this is the natural evolution for bars.
“In five or 10 years’ time batched craft cocktails will be the norm rather than what we have at the minute.”
When it comes to pre-batching in a bar setting, Mollicchi adds that everything that is made is served. “You’re using every element and at every stage, you’re using everything, there is less water waste and by not using garnishes there is less waste overall.”
Travel retail
With more formats for RTDs, there is also an opportunity in travel retail. Last year Moth entered this realm with a partnership with British Airways, to serve its Margarita canned drinks on short-haul flights to and from UK airports. Wallis adds that “high-proof RTDs on planes is not a new thing in the US, but in Europe it is”. The brand also works with Iceland Air with its Espresso Martini for flights to New York.
“I think RTDs are one of those things where people are now demanding higher quality wherever they are and there is no more challenging space for consistency and quality than travel. You don’t have space for a bar, you don’t have trained bartenders and yet people’s expectations, especially after Covid, are at an all-time high, so it’s the perfect opportunity for high-quality RTDs in this new format to service demand that’s there,” continues Wallis.
The brand is also available in travel sites for WH Smith in airports, however Wallis adds that duty free is “yet to work out how RTD functions, the multipack is maybe an option as a gift, but in premium I think for us, we’re seeing customer adoption outside of travel first, then on planes, then I think duty free will come next”.
Pierluigi Pollio, co-founder of Rito cocktails, which won a trophy in the Drinks International Travel Retail Awards (see p40), adds: “We find that quality bottled cocktails are becoming the perfect solution for cruise lines and business classes of aeroplanes to help staff deliver high-quality cocktails without the need for specialist bartenders.
The rise of low and no
With the growing trend for higher-abv pre-mixed drinks, the low and no space is targeting a similar trajectory. Mocktails chief commercial officer Ed Gerard says there are three key trends driving growth. “The obvious one is that people have always chosen RTDs as a way to enjoy their favourite cocktails, so the rise in those moderating their alcohol intake has driven them to search for the same flavours and drinks that they love, but without the alcohol.
“Then we have the wider trend of consumers looking for the use of clean ingredients in the products they buy. Lastly, discerning consumers are now much more likely to look for botanical flavours that bring an interesting twist to what they’re drinking.
“The future of non-alc will be driven by a bigger range and choice for the consumer as brands look to make non-alc versions of their bestsellers. We will first see new brands appearing and generally, these will be quality and value-led, as you can't make a mocktail with the same technique as you make RTD cocktails. There is a steep development curve that will prove too much for some.
“However, I expect the biggest brands to be entering this space in the coming 24 months,” adds Gerard. “There is clear demand in this space, and indeed any space where alcohol has traditionally thrived. The driver behind this is the consumer psychographic shift, particularly in consumers aged 18-35. We are seeing sober cruises and holidays offered and we see more offerings on flights and lounges, so if anything, travel retail, and retail in general, is still behind the curve with regards to non-alc RTDs.”
With a variety of RTDs cropping up in different styles and shapes, it's clear the category will be moving towards the travel retail space and more of an appearance behind bars. However, Wallis adds that although low and no is a key trend in the drinks world at the moment, in RTDs specifically: “It doesn’t see the same traction as the mainstream. I think quality and premiumisation transcends alc or non-alc.
“But from what we can see, high proof is dwarfing anything to do with low and no. It’s just so much bigger and it’s in massive growth, which I think makes it really exciting. With no and low, I think there is a place for it there, but it’s got a long way to go.”
