Ready-to-drink (RTD) bev-alc continues to be a hot segment for beer, wine and spirits producers. However, the RTD landscape has become so extensive that its definitions have become blurry and sometimes confusing.
To help, Bump Williams of Bump Williams Consulting focused his latest monthly update on RTDs and the differing performances across beer, wine and spirits.
Williams separates RTDs into three segments, each with their own subsegments:
- Beer RTDs, including hard seltzers, flavored malt beverages (FMBs) and “soon to be NA [non-alcoholic] RTDs, such as NA White Claw;
- Spirits RTDs, including canned cocktails, shooters, “novelties,” and pods, but not ready-to-serve bottled cocktails;
- And wine RTDs, including all wine in 355 ml or smaller containers and non–glass 375 ml non-glass containers – excluding sake, dessert wine and vermouth – as well as 500 ml wine cocktails in tetra paks (e.g. BeatBox).
Beer RTDs
Beer RTDs make up the vast majority (75.4%) of overall RTD segment dollar sales year-to-date (YTD) through October 21 in NIQ-tracked off-premise channels – 42.7% of RTD dollar sales are from FMBs alone, while 32.7% come from hard seltzers.
Beer RTDs also make up about 17% of total beer dollar sales YTD, “by far the biggest share for RTDs within any single category, though we might expect to see this share diminish a bit by year’s end as the seasonality for FMBs/seltzers dips,” Williams wrote.
Total beer RTD dollar sales have been relatively flat through 2022 (+0.3% year-over-year) and 2023 (+0.3% YTD), “thanks to diverging trends coming from the FMB and hard seltzer subsegments,” Williams wrote.
FMB dollar sales increased +14.9% in full-year 2022, and are up +19.1% YTD in 2023. Meanwhile, hard seltzer dollar sales declined -10.4% in 2022, and are down -16.9% YTD in 2023.
Non-RTD beer growth has been outpacing beer RTD growth, with non-RTD beer dollar sales up +1.9% in 2022, and +2.2% YTD in 2023. However, that trend has “flipped” in recent data, as “non-RTD beer softens and RTD beer maintains its moderate growth,” Williams wrote.
In the last 13 weeks, non-RTD beer and beer RTDs each increased dollar sales +0.7% YoY. In the last four weeks, non-RTD beer recorded a -1.2% decline in dollar sales, while beer RTD dollar sales increased +0.9%.
Spirits RTDs
Spirits RTDs – which make up 16.1% of total RTD dollar sales YTD – have been “red hot” through 2022 (+58%) and 2023 (+47%), and that double-digit growth has continued in recent weeks, with the segment recording a +37.8% YoY dollar sales increase in the last 13 weeks, and +36.6% increase in the last four weeks.
Unlike beer, the segment has significantly outperformed its non-RTD counterpart, with non-RTD spirits about breaking even in the last two years (-1.4% in 2022, +0.3% YTD in 2023). Non-RTD spirits dollar sales increased +3.6% in the last 13 weeks, and +3.3% in the last four weeks.
“Most of this rapid growth for RTDs is certainly influenced by innovation and expansion as the segment evolves, and we are certainly starting to see signs of saturation on the horizon through diminishing growth rates of more recent time periods (+37% over the L4W),” Williams wrote.
“But clearly there is still short-term momentum behind this universe as we head into the close of the calendar year and the famous O/N/D period (October/November/December), a period when spirits sales skyrocket due in large part to holidays, parties and gift-giving,” he continued.
RTD spirits have grown to 8.7% share of all spirits dollar sales, up +2.6 share points YoY, “still padding its stats as the landscape continues to grow at retail,” Williams wrote.
However, the segment’s share of overall spirits dollars has been “fluctuating wildly,” getting as high as 10% over the last 13 weeks, but dipping to 8% over the last four, “as seasonality starts to factor into the equation.”
Wine RTDs
Wine RTD dollar sales account for 8.5% of total RTD dollar sales YTD, and 5.1% of total wine dollar sales, “a number that has held somewhat steady over recent weeks (5.4% L13W, 5.3% L4W),” Williams wrote.
Cocktail-style and “smaller container” wine RTDs have been gaining momentum, “particularly over recent weeks,” with dollar sales up +8.3% in the latest 13 weeks, and +12% in the last four. At the same time, non-RTD wine sales were down -1.2% in the last 13 weeks and -2% in the last four.
Top Brand Families
As previously noted, the RTD segment “skews heavily toward beer,” making FMBs and hard seltzers “the winners on a collective level” in the RTD space.
“Much like NA Beer (excelling in the grocery channel, but relatively non-existent in the c-store channel), while there is a ton of momentum behind RTDs in today’s market, there can still be quite a gap when comparing the size of RTD brands across wine vs. beer vs. spirits or comparing standout RTDs against the vast landscape of Non-RTD brands,” Williams said.
To better analyze trends, Williams listed top RTD brand families in terms of both dollar sales and incremental growth.
Eighteen of the top 25 RTDs by dollar sales are within the beer RTD segment, including four of the top five:
- No. 1 Mark Anthony Brands’ White Claw (dollar sales +16% YTD, RTD dollar share -0.8 points, to 18.1%);
- No. 2 Boston Beer Company’s Twisted Tea (dollar sales +37.3%, share +2.4 points, to 10.7%);
- No. 3 Mark Anthony Brands’ Mike’s Hard (dollar sales +1.5%, share -0.3 points, to 7.2%);
- And No. 4 Boston Beer’s Truly Hard Seltzer (dollar sales -28.6%, share -3.5 points, to 7.1%).
- & J. Gallo’s High Noon Sun Sips, a spirits-based RTD, rounds out the top 5 (dollar sales +48.2%, share +1.6 pts, to 5.6%).
Four other spirits RTDs made the top 25 list:
- No. 14 Anheuser-Busch InBev’s (A-B) Cutwater (dollar sales +30.4%, share +0.3 points, to 1.6%);
- No. 20 Atomic Brands’ Monaco Cocktails (dollar sales +45.6%, share +0.2 points, to 0.9%);
- And No. 25 Beam Suntory’s On the Rocks (dollar sales +14.3%, share +0.1 points, to 0.7%).
Three wine RTDs made the top 25:
- No. 8 Sutter Home (dollar sales +1.4%, share -0.1 points, to 2.1%)
- No. 15 BuzzBallz (dollar sales +38.8%, share +0.3 points, to 1.5%)
- And No. 21 BeatBox (dollar sales +157.9%, share +0.5 points, to 0.9%).
The majority of the top 25 is in the green. Seven of the top 25 recorded a decline in dollar sales YTD: Truly (-29.6%); Seagram’s (-10.9%); Molson Coors’ Topo Chico Hard Seltzer (-15.4%), A-B’s Bud Light hard seltzers (-50.4%), Molson Coors’ Redd’s Hard Apple (-13.6%), Molson Coors’ Vizzy (-27%) and A-B’s Ritas (-9.4%).
One new product, Monster’s Beast Unleashed FMB, made the top 25, with 0.9% share of RTD dollars YTD.
The top 25 list for incremental dollar sales growth is more diverse, with spirits-based products dominating the list.
Eleven spirits RTDs made the list:
- No. 2 High Noon (+48.2%);
- No. 7 A-B’s Nütrl (202.4%);
- No. 9 Cutwater (+30.4%);
- No. 11 White Claw Vodka + Soda (new);
- No. 13 Monaco Cocktail (+45.6%);
- No. 14 Sunny D Vodka Seltzer (new);
- No. 15 Jack Daniel’s & Coca-Cola (+171.6%);
- No. 17 The Finnish Long Drink Cocktail (+118.2%);
- No. 19 Truly Vodka Soda (+3,084.1%);
- No. 22 Carbliss Cocktails (+357.4%);
- And No. 25 Constellation Brands’ Fresca Mixed (+1,860.3%).
FMBs still make up four of the top five brand families for incremental growth, with No. 1 Twisted Tea (dollar sales +37.3% YTD), Molson Coors’ Simply Spiked (+177.8%), Beast Unleashed (new); and Mark Anthony Brands’ Cayman Jack (+37.6%).
Two wine RTDs made the list: No. 6 BeatBox and No. 8 BuzzBallz.
“There are also a couple instances of brand families playing both sides of the field,” Williams noted.
Mark Anthony Brands double-dips with its malt- and spirits-based versions of White Claw (No. 12 and No. 11 respectively), while Jack Daniel’s double-dips with its No. 15 Jack Daniel’s & Coca-Cola spirit RTD, and malt-based Jack Daniel’s Country Cocktails, a FMB brand made with Boston Beer.
“I just find myself wondering how much bigger this “pie” will continue to get before we start to see more red on the ledger,” Williams wrote. “This is already a phenomenon that we have lived through with hard seltzers and we can already see signs of slowing momentum & share shifting taking place among FMBs, RTD spirits and select brand families.”
Williams noted that dollars per item is already “starting to slip into the red” for FMBs, as the subsegment gets overcrowded with brand extensions that “don’t add incremental purchase power,” as well as RTD spirits, “as efficiency and space allocation perhaps starts to come up against some newfound thresholds after a fast and furious run.”
“This is very much still a growth area for beer, for spirits and for wine (to a smaller scale), and worthy of ongoing focus, but it’s at this point that we should pay as much attention to metrics like velocity, efficiency and share shifting as we do solely on growth,” Williams continued. “These are the metrics that will help us separate who/what is in this for the long-term vs. those that are enjoying the ride.”