The 4th Alcohol Category: Ready to drinks (RTDs)

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The alcohol space is dominated by 3 key categories: beer, wine, and spirits. But as consumer tastes evolve and new, innovative products hit the shelves, the industry is ushering in a new 4th mega category: ready to drinks (RTDs).

RTDs offer variety, convenience, flavor, and innovation – and most importantly, appeal to the need states of today’s consumer. This emerging product has seen explosive growth recently, and we’re uncovering what brands need to know to tap into this key category.

The changing alcohol consumer

The consumer landscape is in constant flux, and spending behavior is growing more unpredictable. Shifting demographics, new purchasing channels, and evolving consumer mindsets are all impacting what products attract today’s shopper.

Historically, there’s been an overlap between the purchasing of beer, wine, and spirits – and RTDs are amplifying this trend.

Consumers are experimenting with new offerings in line with flavor forward palates, the craving for convenience, the need for functionality, and the desire to experiment. As a result, RTD products are reshaping current categories and creating an entirely new one on its own.

From three to four

14% of BevAl consuming households have an observable spending overlap between beer, wine, spirits, and RTDs. They’re also responsible for 29% of total BevAl volume.

These households are driving the growing dominance of RTDs through an openness to new products. And it shows.

**Annual growth in the BevAl space is hard to come by – with all categories seeing either decline or growth, except RTDs.**

RTDs: The new player

RTDs hold untapped potential and are a key product play for brands today. Why?

50% of total alcohol innovation dollars today come from RTDs
35% of bartenders that work in an establishment stocking RTDs say they’ve seen a big increase in sales in just a year
Spirit-based RTDs are driving rapid growth – contributing 40% more to total RTD sales than a year ago

Consumers see the benefits, replacing their usual cocktail hour favorite with a convenient, ready-to-go option.

17% drink of consumers drink RTDs in the on-premise. (US OPUS Spring 2024)

The value prop is clear: minimal ingredients, little to no prep time, and consumers can enjoy a Moscow Mule, spritz, or Margarita in seconds.

Consider: While RTDs are a growing hit, to ensure longevity, flavor innovation may require a creative boost – where can you challenge the standard and reach new audiences? True innovation is required to maintain RTD momentum and expand shelf space allocation beyond current rates.