Ethimex has been active in the development of several RTD beverages and Hard Seltzer. In this post, we will share our knowledge about this exploding category and its future in the world of drinks.
Ready-to-drink (RTDs) beverages are single-use packaged drinks that range from non-alcoholic drinks such as packaged cold-brew coffee to hard seltzers and canned cocktails. A report from Fior Markets, forecast that the global RTD market is expected to reach US$ 17.67 billion by 2025. This report was from September 2019, a world before COVID-19 and things have changed drastically since. This includes people's drinking habits as bars, pubs, cafes and restaurants around the world have been forced to close for a while and we've all been drinking solely from home, a trend that might stick. What we've been drinking is very interesting and varies widely, from stocking up larger volumes of spirits to completely abstaining. RTD alcoholic beverages is a drinks category that saw a boost and continual growth throughout the weeks of lockdown. According to Neilsen data, the sales of beers, RTDs and ciders haven gone up by 52% in the USA, with a lot of this growth being driven by the hard seltzers.
But are RTDs simply a trend? a reaction to our current extreme circumstance or will we see a continual rise in the alcoholic RTD beverages market after when lockdown restrictions lifted?
For the past couple of years, RTD alcoholic drinks have been on the rise globally. Currently, the largest shares of RTD are in the Asia-Pacific countries such as Japan, China, and India but we are seeing the US and UK catching up. A huge part of this increase is driven by lifestyle changes, ones that place more emphasis on convenience and health. This is especially the case with the Millennial and Gen Z generation. These generations are not necessarily drinking less but they are drinking differently. According to a report on RTD Alcoholic Beverages U.S. by Mintel (November 2019), “one in five drinkers is reducing their alcohol consumption, however, RTDs were the only alcohol segment to experience an increase in consumption over a 2018 measure.”
They are a lot more conscious about what they consume and are more attracted to low abv drink options like hard seltzers. From our experience in the UK and Europe, these are made from an alcohol base such as GNS or fermented fruit base, sparkling water and added fruit flavour. They come in conveniently packaged in aesthetically pleasing and recyclable aluminium cans, cartons or bottles. They're low in ABV and calories and can boast unique flavour offerings, often focusing on natural ingredients, which makes them highly attractive products. The lighter appeal of low ABV RTDs have been amplified during the pandemic as coronavirus has naturally made a lot more people health-conscious and for those who are not abstaining from alcohol, low-abv drinks strike that balance between health and indulgence.
Besides low ABV options, COVID-19 restrictions have been a springboard for canned cocktails (pre-made cocktails) as imbibers are not always able or inclined to visit bars for their favourite cocktail. Cocktails in a can provide a good substitute without having to invest in the equipment or ingredients to make them at home. Brandy Rand, COO for the Americas at IWSR explains that "canned cocktails are particularly well-positioned to resonate with consumers during lockdowns. They mimic an easy cocktail experience for consumers missing the on-premise.”
A lot of craft players are making a mark on the RTD scene by making or buying premium spirits and mixing it in house, but so are the established bottled spirits brands. Creating portable canned versions of their liquor, such as pre-made gin and tonic as part of their NPD. While this is not an entirely new venture for the big, established brands, it hasn’t been as popular as it is today. This move can be very lucrative for the brands. In 2019, Jack Daniel's & Cola was reported by The Spirits Business as the second best-selling RTD brand in the world with sales of 7.9m with the growth driven by France, Germany and the US. Even on-trade venues have turned to create their own RTD cocktails complete with delivery service during the pandemic to keep the business running during the difficult times. Bar visits might have to deal with new social distancing measures which will affect their service and therefore income, it won't be surprising if bars continue with their premade cocktail delivery service.
This is where the convenience of alcoholic RTDs can create new drinking experiences. The packaging of RTD fits well into a world where social distancing rules and more gatherings occur in outdoor locations such as public gardens, parks and beaches. RTDs can bring a small part of the bar experience outside of the bar.
Before coronavirus, the RTD sector was on an upward trajectory due to the changing lifestyles that focused on convenience and lighter drink options. These factors have only been magnified during the pandemic and even as countries slowly eased themselves out of complete lockdown, there are still pre-cautionary rules e.g. social distancing, that will only help the growth of RTDs. The drinks industry has always been innovative, and it will continue to do so as we all learn to navigate whatever the new normal will be.
As one of the leading global suppliers of we can help your search for neutral alcohol, premium spirits or fermented alcohol base to create your own ready-to-drink beverage, contact Ethimex today.
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