Propelled by consumers’ desire for easy-to-enjoy, high-quality and portable cocktails, few categories have seen more growth in the last three years than ready-to-drink (RTD) cocktails, according to alcohol delivery company Drizly, Boston, adding that sales don’t show any signs of slowing down.
At Drizly, in the past 12 months, RTDs accounted for a 2.8% share of total sales, up from 1.9% in 2021 and 1.1% in 2020. Comparatively, the hard seltzer category accounted for a 2.7% share of total sales in the past 12 months, compared with 3.4% in 2021 and 3.6% in 2020.
Across the U.S. alcohol market, RTD sales started to see rapid acceleration in the early pandemic years. According to NielsenIQ, year-over-year off-premise dollar sales from 2020 to 2021 increased 156% for spirits-based hard seltzers for the 52-week period ending October 2021, and sales for RTD cocktails grew 126%. By mid-2022, the dollar growth of spirits-based hard seltzers was another 73% year over year, according to NielsenIQ. RTD cocktails, tracked separately, experienced 61% growth.
“Canned cocktails are a convenient and quality solution for cocktail lovers,” said Earl Kight, co-founder and chief sales and marketing officer for Cutwater Spirits, San Diego. “No ingredients, no prep or cleanup. They offer controlled ABVs and consistently taste delicious.”
Today’s RTD cocktails have come a long way from decades-old predecessors like wine coolers and malt-based hard lemonades, and they stand out from the fermented malt beverages and hard seltzers that also had a moment in the early pandemic years, Drizly said.
“The RTD category has grown from less expensive offerings made with artificial ingredients and neon colors to cocktails made with natural flavors and premium spirits,” said Kelly Gasink, the co-founder of Austin Cocktails, Austin, Texas.
Premiumization
While RTDs range from full-strength cocktails to lower-ABV options that can compete with hard seltzers, premiumization has defined the trajectory across the board, Drizly said. The average unit price of RTDs on Drizly over the past 12 months is $13.80, up 9.5% from the $12.60 average sale price seen the previous 12 months. According to London-based IWSR Drinks Market Analysis, this reflects both those trading up from hard seltzers and the preference for bar-quality cocktails that might come with higher ABVs.
What’s Selling?
The increased number and variety of RTD options on the market have fueled the category’s growth, which has inspired even more brands to launch RTD products, Drizly said.
Drizly’s top-selling RTD brands, 2023 to date
- High Noon
- Cutwater Spirits
- On The Rocks
- Jose Cuervo
- Buzzballz
- 1800 Tequila
- The Long Drink Company
- NÜTRL
- Monaco
- Beatbox Beverages
Drizly’s top-selling RTD SKUs, 2023 to date
- High Noon Vodka Hard Seltzer Variety 12-Pack
- High Noon Vodka Hard Seltzer Variety 8-Pack
- High Noon Vodka Hard Seltzer Limited Edition Tropical Variety 8-Pack
- Cutwater Tequila Lime Margarita 4-Pack
- On The Rocks Effen Vodka The Cosmopolitan Cocktail 375ml Bottle
- High Noon Peach Vodka Hard Seltzer 4-Pack
- High Noon Tequila Seltzer Variety 8-Pack
- High Noon Pineapple Vodka Hard Seltzer 4-Pack
- On The Rocks Hornitos Tequila Margarita Cocktail 375ml Bottle
- High Noon Grapefruit Vodka Hard Seltzer 4-Pack
Drizly’s Fastest-Growing RTD Brands, 2023 to Date
- Kin Euphorics
- CIROC
- Bulleit
- Casa Azul
- Encore Talkhouse
- JuneShine
- Campari
- Faux Pas
- ZUZI
- Day Chaser
Who is Buying RTDs and When?
“The younger generations have seen the most share growth in this category over the past few years as it has evolved from primarily multi-serve margaritas to a wide array of single-serve cocktail flavors,” said Liz Paquette, Drizly’s head of consumer insights.
More women are purchasing RTDs on Drizly, with a 58% share despite holding a 52% share of overall sales on Drizly.
When it comes to seasonality, sales of this category remain strong and relatively stable throughout the full year, Drizly said. “However it’s especially important for retailers to have their stock of RTDs ready going into the warmer months,” the company said. “Over the past 12 months, the top months for RTD sales on Drizly were July, June, and August.”
Poised for Future Success
Despite representing a smaller share of overall sales on Drizly compared to leading liquor categories like whiskey or vodka, the RTD category is one for retailers to invest in, Drizly said. The RTD category not only has staying power, says Paquette, but its share will continue to increase. “It is small but growing piece of the total liquor category” she said, “and we believe there is still room for continued growth.”
A market analysis report from Grand View Research, San Francisco, found that the RTD category will grow at a compound annual rate of 12.8% between 2022 and 2030, Drizly said. As more consumers turn to more premium options, the RTD category is poised to grow in both dollar amount and volume.
Paquette also predicts that consumer education will drive the RTD category. “Consumers will become savvier about what they are drinking,” she said, “from ingredients to attributes like organic and gluten-free.”
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