The new RTDs shaking up the alcohol market

June 13, 2019
By Alana House

Nielsen has declared innovative new RTDs will be “tomorrow’s off-premise growth driver” in the US, in a report that offers fascinating insights for the Australian market.

Nielsen notes that while price is likely the most well-established purchase driver, convenience often runs a close second.

“And from a retail perspective, it’s an attribute that’s boosting sales in categories that previously weren’t very convenient,” it says.

“Think about your favorite martini, or perhaps a particular variation of the Moscow Mule. To get one—and a good one—you’ve traditionally had to rely on a good mixologist. Today, however, ready-to-drink adult beverages are freeing consumers from the confines of their favorite watering holes—giving them the same freedom that beer drinkers have enjoyed for decades.”

Newer alternative packaging such as cans, boxes and Tetra Paks are playing a role as well, as they provide for more convenient and portable options for social gatherings and outdoor activities.

In 2018, Tetra Pak sales were up 14.2% in the US and both RTD and single-serve buying trends grew by more than 20% each.

Kahlua Espresso Martini RTD

Nielsen says that freedom will lead to growing sales in the ready-to-drink cocktail space because consumers rank it highest among the factors driving purchase intent.

The area seeing the most growth in RTDs is the emerging malt-based cocktail segment. Annual sales in this segment are up 574%, and malt-based cocktails now account for $4.7 million in annual sales.

Spirit and wine-based “ready to drink cocktails” are more established and generate larger sales ($62 million and $83 million in annual sales, respectively). And while spirit- and wine-based ready to drink cocktail sales aren’t skyrocketing the way malt-based cocktail sales are, they are growing exceptionally well. They both posted sales growth close to 40% higher in the latest 52 weeks compared with sales from a year ago.

Beyond the bottle

Nielsen notes that the RTD trend has broadened the scope for how alcoholic beverages have traditionally been contained. Specifically, cans, boxes and Tetra Paks are steadily growing as popular vessels for ready-to-drink adult beverages. Cans, in particular, are performing particularly well.

Tetra-pak wine

In the craft beer category, cans now account for just over 36% of dollar sales, up 25.4 percentage points since the 52 weeks ended April 25, 2015. In terms of dollar sales, canned craft is now an $820 million sub-category, up from $436 million back in April 2015.

But cans are no longer just for beer – they’re booming in the wine sector. There are now 22 wine brands that can 386 different wine items and generate more than $81 million in annual sales in the US. A year ago, canned wine accounted for about $46 million in annual sales.

Canned wine sales predicted to hit $30million in Oz

The canned wine category has gone from zero to hero in Australia – it’s predicted to hit $30million in sales in the next three years.

Canned wine sales are currently around $7million, with Treasury Wine Estates among those leading in the category.

TWE canned wine RTD

“The combination of convenience, the smaller format, sustainability and ability to take can wine to events and areas where glass is prohibited has contributed to its growth,” TWE’s George Samios told the West Australian.

“And our research shows that it is not just the younger people who might have been in the RTD, cider or spirits sector, but older people who also seem to be attracted to the format and the styles of wines.”

He said the group was so confident about the future of the category that it had several other canned wines in the pipeline for release.

Meanwhile, BWS wine category manager Nitin Arora told Good Food that canned wine is one of its fastest-growing categories in Australia.

“Our customers tell us canned wine is perfect for barbecues, picnics and outdoor events because the products are lighter to carry.”

Revolutionary NZ RTD wins top packaging award

Auckland’s Onfire Design took out the top trophy at The Dieline Awards this year in the Dark Sprits Category for its creative vision around Luxerose RTD’s.

The packaging also came third in the Luxury Limited Edition category.

The judges of the Dieline Awards commending the agency for its creativity, marketability, innovation, execution, and on-pack branding.

Luxerose RTD cocktails

The Luxerose range of RTD cocktails is aimed at the young, millennial female audience in New Zealand and China.

Designed for social occasions and gifting, New Zealand mixologists were commissioned to create three distinctive cocktail blends reflecting current flavours and taste trends in the New Zealand social scene.

Onfire Design created a unique set of three glass vials which, when chilled, could easily be dispensed at home or in bars. These are contained within a presentation case decorated with a modern, colourful abstract botanical illustration showing various flora and fauna from New Zealand.

Click here to read the full Nielsen report

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