The Rising Tide of Spirit-Based RTDs

The ready-to-drink (RTD) market, previously dominated by the wave of hard seltzers, is now steering towards a more sophisticated and nuanced realm with spirit-based RTDs and canned cocktails gaining prominence. This shift is not merely a trend but a reflection of evolving consumer preferences, seeking depth, variety, and a premium experience in their beverages.

In recent years, especially highlighted in 2024, spirit-infused RTDs have surged in popularity. Insights from IWSR Drinks Market Analysis reveal that these beverages, particularly vodka-based RTDs, have clinched a substantial market share, indicative of a broader palate preference. This pivot to spirit-based options is underscored by the market’s gravitation towards premiumization. Consumers are increasingly drawn to the quality and craftmanship of these drinks, paralleling the growth trajectory in the sector, with Statista marking a 1.3% growth in the U.S. RTD market in 2022, reaching an impressive $4.8 billion.

The narrative of growth is supported by a compound annual growth rate of 1% anticipated through 2027, hinting at a steady expansion in the RTD realm, particularly for spirits-based products. This growth is not just in volume but in the sophistication of the offerings, with consumers preferring the complex and nuanced profiles these beverages offer over the relatively simplistic malt-based seltzers.

The off-premise dynamics, reflecting retail and home consumption patterns, show a significant tilt towards these spirit-based RTDs. Reports from CGA by NIQ’s 2023 illuminate how retail settings have become battlegrounds for these beverages, with higher alcohol content RTDs like On the Rocks Cocktails, Monaco Cocktails, Cutwater, and Cuervo Authentics emerging as favorites. Retailers like Frugal MacDoogal in Nashville and Randall’s Wine & Spirits in St. Louis echo this sentiment, reporting a noticeable uptick in the demand for these more potent offerings.

However, the journey is not without its hurdles. The RTD market, booming with potential, faces the practical constraints of shelf space and the imperative of effective marketing. These factors are crucial in ensuring that the spirit-based RTDs not only reach the consumers but also resonate with them, fostering a loyalty that goes beyond the novelty of trying something new.

In the narrative of 2024’s beverage market, spirit-based RTDs stand out as a testament to the evolving consumer palate and the industry’s response to it. The trend is not just about alcohol content or flavor profiles; it’s about an overarching demand for quality, convenience, and a premium drinking experience. As the RTD market continues to evolve, the ascendancy of spirit-based offerings marks a significant chapter in the beverage industry, promising a year where quality meets convenience, and taste transcends tradition.