Ready-to-Profit: RTD Cocktail, Wine and Hard Seltzer Opportunities

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The ready-to-drink category appears positioned for scintillating summer sales.

Malt-based cocktails, hard seltzers, and canned wines are leading the incredible growth RTDs are experiencing, according to Nielsen data comparing the 52-week period from May 2018 to May of this year.

While this growth is largely due to off-premise retail sales, consumer interest in RTDs should be eye-opening for on-premise operators.

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Why RTD?

Nielsen has identified several reasons1 that lead to consumers to purchase RTDs. The top reason among survey respondents is that they’re an easy way to enjoy a cocktail (55 percent).

But a few other reasons for RTD purchases point to what consumers are looking for when consuming alcohol:

  • Light and refreshing (34 percent)
  • Easy to sip over the course of an evening (32 percent)
  • The right level of ABV (25 percent)
  • Not too filling (11 percent)
  • Align with health and wellness goals (8 percent)

Consumers showing a preference for malt-based cocktails, hard/spiked seltzers, canned cocktails and other RTDs have made it clear that they like them for their convenience and health and wellness characteristics: light, refreshing and sessionable.

Check this out: In the Can: Succeeding with Canned Beverages

In terms of how this relates to on-premise operations, consider that many guests seek to enjoy the same beverages they drink with friends at home or otherwise away from bars and restaurants. Close to half of guests today are unwilling to wait 10 minutes or longer for a drink. RTDs cut wait time drastically, even when served with straws and garnishes. A portion of the success of mocktails is attributed to health and wellness, but beverage alcohol RTDs also speak to that interest.

What RTD?

For whatever reason, White Claw has been held up by outlets inside and outside of the hospitality industry as a category-killing brand. Some have gone so far as to claim people are drinking more White Claw than craft beer. Others say that White Claw sales are killing the beer category overall and outperforming nearly all other beverage alcohol categories.

A number of outlets have said that White Claw has seen sales growth of 193 percent in just 12 months. They point to Nielsen data when making this claim, but the report2 this claim appears to be based on makes no mention of White Claw specifically.

There’s another reason this praise of White Claw is somewhat perplexing. Nielsen separates the malt-based cocktail and hard seltzer RTD categories, and the latter didn’t experience the most growth percentage-wise in the 12-month period from May 2018 to May 2019. That accomplishment belongs to malt-based cocktails (think Smirnoff Ice, Mike’s Hard, and Truly Spiked & Sparkling, an affiliate of Boston Beer Co.), which grew 574 percent2. Hard seltzer, according to Nielsen, grew 193 percent.

Check this out: Hard Seltzer, Canned Wine set for Explosive July 4th Growth

The top RTD categories relevant to on-premise operators, in terms of percentage of sales growth according to Nielsen data, are as follows:

  • Malt-based cocktails (574 percent)
  • Hard seltzer (193 percent)
  • Canned wine (77.5 percent)
  • RTD wine-based cocktails (42 percent)
  • RTD spirits-based cocktails (40 percent)

Last month, we shared how one on-premise operator in New Jersey is succeeding with canned cocktails. Bin 41 wine director and general manager Joel David Liscio sits with each RTD the venue offers, tastes them, and makes simple yet thoughtful and effective changes to elevate their flavors and appearances. In turn, the guest experience is elevated, more memorable, and social media-worthy.

Who RTDs?

In short, everyone wants RTDs. That may seem flippant but that’s precisely what Nielsen data has uncovered. From Millennials to the Greatest Generation, consumers are showing great interest in RTDs, from malt-based cocktails to hard seltzers and wine in a can.

The popularity of these drinks is expected to carry on—and grow—through this summer. Embracing of the right brands and products and paying attention to presentation can pay off for on-premise operators.  

Sources

1 Nielsen Homescan Omnibus Survey, January 2019

2 Nielsen Scantrack, all Nielsen-measured off-premise outlets 52 weeks ended April 20, 2019

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