Rise of Ready-To-Drink Cocktails
According to a recent study conducted by International Wine and Spirit Research (IWSR), ready-to-drink (RTD) cocktails have witnessed a 43% growth in global consumption in 2020 alone. IWSR also projects that consumption of ready-to-drink cocktails will grow in volume by 21.8% annually between the years 2019-2024. Several major brands have released their own line of RTDs and canned cocktails. For example, Absolut released its vodka sodas and RTDs cocktails in May 2020. Ketel One debuted in the space by releasing Vodka Spirit in September 2020. Russian Standard released its vodka-based Moscow Mule, and even the premium gin brand Bombay Sapphire released its own canned gin and tonics recently. Pre-COVID, these major brands were not players in the ready-to-drink market. Earlier, most of the RTD cocktails were sugary, made with unnatural ingredients, and had low demand. But the entry of premium brands has changed everything.
The pandemic saw an 86.8% increase in annual growth for all RTDs compared to only 21.5% in the pre-COVID situation. They are growing faster than other alcoholic drinks like wines, spirits, and beer. Hard seltzers are the most common of all RTDs dominating the US market. And according to IWSR, they will account for half of all global ready-to-drink cocktails by 2025. This signals a major shift in consumer demand and interest. With established brands entering the ready-to-drink market, there is a growing trend towards premiumization. Changing consumer needs have driven this massive growth with more wanting better quality in addition to convenience. The growth of ready-to-drink cocktails also escalated in the COVID times because with most bars and pubs shut down, customers missed their favorite cocktails. And a lot of those people do not know how to make their drinks. In such a situation, RTD cocktails cater to their demands – giving them the premium experience of their favorite cocktail without making it themselves.
Data from Hotspex reveals that the most common reasons to drink RTD alcoholic beverages are to feel satisfied (67%), relaxed (64%), and take a moment to oneself (65%). The quality of ingredients is also important in this category (62%) as consumers are exposed to premium offerings. With most of the people working and even socializing at home, RTD alcoholic beverages became quite popular. It was found that people usually drank RTDs when taking a break from work (12%) and hanging out with friends (18%). Further, consumers have a strong emotional connection to RTD alcoholic beverages. They perceive RTD alcoholic beverages as trendy (52%), popular (54%), modern (47%), and friendly (50%). Among recent drinkers, RTD alcoholic beverages are a positive and happy drink.
Using Data to Unlock Insights
If you are a traditional alcoholic brand, you’d probably be looking to enter the ready-to-drink market and take advantage of the boom. You can do so by following consumer demands, i.e., maintaining authentic taste, providing convenience and premiumization. In the modern era, busy customers want to enjoy their authentic drinks in the comfort of their homes. You can use data to understand your consumers’ attitudes, behavior, and motivations.
Several companies employ fundamentals of behavioral science to help brands understand “who” their customers are, why those customers are behaving in a particular way in a certain buying situation and their motivations for such behavior. Unlocking these insights can shed light on whether your brand is coming to mind in the right place, at the right time, and in the right way. Many companies provide behavioral science-driven insights that can help you understand your customers’ behavior better. As a traditional alcohol manufacturer, you can use these insights (provided by several companies and research professionals) to enter the ready-to-drink market successfully and take advantage of the market’s boom.
Sustainable Trend
Some people may think that the growth of RTDs is not sustainable because sooner or later, things will go back to normal – people will return to bars and pubs. But it seems that this may not necessarily be the case. When the pandemic recedes, consumer trends may not shift. People who have tried RTDs before or during the crisis might want to stick with that, especially if premium RTDs offer them everything they need and even more. RTDs have really changed the alcohol market by providing premium offerings, the authenticity of the brand, and the convenience of drinking your favorite cocktails at pools and country clubs. Some RTDs are even offering sugar-free, gluten-free options and natural fruit flavors without sacrificing great taste. Such a variety of options is especially appealing for millennials which is why it is expected that there will be sustainable growth in the consumption of RTDs even after the pandemic.
Conclusion
There is no doubt that RTDs have completely disrupted the retail alcoholic beverage market. They have shown more growth than any other alcoholic drink. The entry of established brands has led to the premiumization of the RTD market – creating more customer interest and trust. The RTD market is expected to grow sustainably; therefore, traditional alcoholic brands should take advantage of the boom using data to unlock insights provided by market experts and professionals.
About Author:
Kaylee Boulton, Director of Behavioural Science
Kaylee joined Hotspex in 2018 and concurrently completed her Masters in Psychology. She leads a team of Behavioural Science Associates which serve as the core of our research design and analysis in behavioural understanding.
Kaylee has over 6 years of experience in research having previously worked as a Researcher at Wilfrid Laurier University and in the Research team at Goodlife Fitness prior to joining Hotspex. She brings a strong understanding of human behaviour from both a scientific and consumer insights perspective. She has end-to-end experience applying behavioural science to build brands.
Website: https://www.hotspex.com/