The Ready-to-Drink Category is on FIRE!
The fastest-growing segment of distilled spirits is undeniably the Ready-to-Drink (RTDs) category. In fact, RTDs have experienced steady growth since 2016, with large growth gains occurring within the last three years at an average growth rate of 80.0%. At 12.9% share, RTDs are now the second-largest distilled spirits category, behind vodka to surpass cordials & liqueurs and tequila for overall volume consumption in 2022. RTDs was one of just two spirits categories to attain double-digit volume growth, with volume growth of 53.3%, advancing to 37.3 million 9-liter cases.
Convenience, lower alcohol content, innovative flavors, and quality alternatives from prominent brands such as Jose Cuervo, Crown Royal and Ketel One are among the primary consumer drivers. Increased interest in RTDs for key drinking occasions peaks, particularly as we head into the summer months’ parties, long holiday weekends including Memorial Day and July 4th celebrations, barbecues, and sports viewings.
The top five suppliers in the category control 70.1% of the market in terms of volume. As the competition intensifies with new offerings and players getting into the category, the segment is less likely to be less dominated a just a couple of suppliers as we’ve seen in the past.
The top eight brands— including High Noon Sun Sips, Cutwater and Jose Cuervo RTD—now rank within the top 75 distilled spirits brands , ranking at No.1, No.20 and No.24, respectively. High Noon, Cutwater and Monaco Cocktails were among the brands showing the most progress moving up the list versus their 2020 positioning. Furthermore, the majority of the leading RTD brands tracked by the Beverage Information Group posted significant volume cases gains within the category. The top 5 leading brands alone now account for over 65.0% of the market, growing a combined average of 28.7%.
Millennials favored the overall total RTD category the highest at 39.4%, with younger Millennials slightly more engaged at 21.5% versus older Millennials at 17.9%, according to a 2022 Winter MRI-Simmons USA National Consumer Study (Drank In Last 6 Months). The trend of “better-for-you” drinking is prominent in the RTD category with increasingly aggressive marketing to health-conscious Millennials and Gen Z consumers. RTDs also now reflect broader alcohol trends in sustainability, like packaging and production/ingredient certifications. RTDs appeal more to females (62.4%) than males (37.6%) with more than half having annual household incomes of over $75K.