Is it the age of the RTD?

Everyone is jumping on board the ready-to-drink (RTD) bandwagon. Ron Emler investigates. 

The category is predicted to be worth US$21.1 billion in sales by 2027, making it one of the fastest-growing sectors in the spirits industry, with a compound annual growth rate of almost 15%.

The latest to make a play for market share is Boston Beer, which is  rolling out an new iteration of its Truly hard seltzer brand in the form of Tequila Soda, based not on malt but on premium tequila blanco, fruit juice and sparkling water.

Other offerings

The launch comes as Truly and other hard seltzer brands struggle as more consumers move on from the formerly trendy category in search of other RTD alcohol offerings.

The once go-go brand has been a significant drag on Boston Beer’s performance and in its February figures it said that Truly was major contributor to its 12% decline in revenue during pre-Christmas quarter.

The launch of Truly Tequila Soda comes after other seltzer producers incorporated the Mexican spirit into their drinks.

Truly Tequila Soda adds to Boston’s malt-based Slingers Signature Cocktails and Twisted Tea in its RTD range, but adding to RTD offerings is not a guaranteed winner. For instance, Boston Beer previously launched Sauza Agave Cocktails in 2021 in collaboration with Beam Suntory, but that partnership that has been discontinued.

The leading brand in the hard seltzer category, White Claw, also recently introduced a tequila-based offering in Canada, White Claw Tequila Smash, while High Noon launched its Tequila Seltzer in 2023.

BuzzBallz

Meanwhile, as reported by the Spirits Business, Buffalo Trace owner Sazerac has bolstered its ready-to-drink (RTD) portfolio with the acquisition of BuzzBallz for an undisclosed sum.

BuzzBallz was launched in 2009 and Sazerac says the deal is mutually beneficial and will boost its portfolio with a ‘fun, unique, pre-mixed RTD’ and further extend BuzzBallz’s customer base.

Industry sources say that BuzzBallz had retail sales of about US$200 million last year in wine- and spirits-based RTDs, about five times Sazerac’s existing offerings in the segment.

Between 2016 and 2019, the US RTD category grew 20% but sales really soared exponentially during the period of Covid lockdowns when consumers began experimenting seriously with cocktails at home.

Now the global giants are clamouring for a slice of what they perceive as a fast-growing segment of the spirits market and one ripe with potential premiumisation on the back of iconic brand names.

The standout name is the joint venture between Brown Forman and Coca-Cola to launch Jack [Daniels] and Coke worldwide. The RTD first appeared in 2022 and is being rolled out worldwide.

Constellation

In 2022 Constellation Brands bought the remaining stake in RTD producer Austin Cocktails for an undisclosed sum and has linked with Coca Cola to produce alcohol infused Fresca

Coca-Cola is also partnering Pernod Ricard in an Absolut Vodka and Sprite RTD, while the French group has also launch RTDs based on Malibu, Jameson Irish Whiskey, Havana Club rum, Malfy and Beefeater gins and Kahlua.

Recently chairman and CEO Alexandre Ricard told db: “We have a number of brands doing RTDs and we have a clear business plan.

“We just launched outside of the US and also in the US right now we just launched {Absolut with] Ocean Spray. We have made a big, big investment [into RTDs].”

Diageo

Meanwhile, Diageo, which launched Smirnoff Ice in 1999, has introduced its Cocktail Collection of RTDs, including a Ketel One Vodka Espresso Martini, a Ketel One Vodka Cosmopolitan and a Tanqueray Gin Negroni.

They join Bulleit Bourbon’s bottled the Manhattan and Old Fashioned cocktails, which made their debut last year. Diageo recently added a Captain Morgan rum variant to the range.

In 2021 it acquired Far West Spirits and its tequila-infused Lone River Ranch Water seltzer brand as a stepping stone into the RTD market.

Beam Suntory

Beam Suntory sees big opportunities in RTDs. Its bottled cocktail brand On The Rocks surpassed 600,000 nine-litre cases in 2023, according to Heather Boyd, managing director for its RTD business in the US.

Makiko Ono, president and CEO of Suntory Beverage & Food Limited, has said that the company will use its new Suntory Oceania subsidiary in Australia to trial from next year the introduction of canned ready-to-drink beverages.

It launched its RTD cocktail 195 Double Lemon there in 2021.

In 2022 Constellation Brands bought the remaining stake in (RTD) producer Austin Cocktails for an undisclosed sum and has linked with Coca Cola to produce alcohol infused Fresca Campari has played up the possibility of launching an Aperol ready-to-drink (RTD) product to add to its UK RTD portfolio of Campari Soda and a multi-serve Negroni cocktail.

The Italian group already sells a bottled Aperol Spritz ready-to-serve product in US, Canada, Italy, Germany and The Netherlands.

Brewers too are moving in on the market.

AB InBev bought Cutwater sprits back in 2019, and offers more than 20 canned cocktail classics that span nearly every spirits category including tequila, vodka, rum, gin and whiskey.

Coca-Cola and Molson Coors are expanding their partnership through the RTD line Topo Chico Spirited, the third RTD they have introduced since joining forces.