Ready-to-drink (RTD) beverage alcohol consumption has grown 104% in the past two years, according to NIQ, but how are consumers making shopping decisions, and where are they enjoying the growing variety of flavored malt beverages, canned cocktails and seltzers?
Those answers and more were illuminated by NIQ’s presentation yesterday, called Uncorking How Ready-to-Drink Alcohol Beverages are Changing Consumption. Over 300 individuals, primarily aged 21 to 50, participated in the study conducted towards the end of last year, and logged more than 2,500 unique consumption moments. Here are five data nuggets illustrating the who, what, where and why of RTD consumption.
RTDs are Impulse Decisions
“Whether it’s beer, spirits or wine, we see really good takeaways in terms of shoppers telling us yes, this was a planned purchase,” said Jon Berg, vice president of thought leadership of BevAl at NielsenIQ. “The exception is RTDs.”
RTDs are impulse decisions according to the data: 63% of RTD purchases were planned versus beer or spirits which hovered at 80%. However, that may be due to lack of consistent SKU availability in the young category, as fluctuating inventories and fragmented distribution can be more of a factor at the shelf for RTDs.
RTDs Dominate Home-Premise
RTD brands might boast about their portability to the beach or the slopes, but 82% of RTD drinking occasions are at home, a similar percentage to categories across the board. The next most popular location was someone else’s home (9% of occasions). While only 18% of RTD drinking occasions occurred away from home, consumers reached for certain brands in particular when away from their couches, including Jack Daniel’s, Mark Anthony Brands’ Mike’s Harder, and Boston Beer Company’s Truly Hard Seltzer.
RTDs are For Lovers— and Watching TV
RTDs enjoyed the highest share of occasions consumed with a spouse or significant other (41%). They were also enjoyed more by women (59%) and in suburban areas (46%).
Beer and wine drinkers were more likely to sip on something while eating a meal, but RTD drinkers were more likely to crack open a can while watching TV or playing video games.
“You can see that 29% of RTD consumption was done while watching TV or playing video games, which was a lot higher compared to the other categories,” said Janey Yu,
vice president of consumer insights at NIQ.
Seltzers Still Dominate
Across RTD beverages, seltzers dominated drinking occasions (65%), with Mark Anthony’s White Claw (11%) and Truly (7%) leading, and Jack Daniel’s RTDs at Truly’s heels (6%). As a brand, Jack Daniel’s over-indexed on occasions with a motivation of “escaping reality,” a possible indicator of how spirit brand extensions can tap into differentiating motivators.
That lines up with sales data: hard seltzers accounted for 43% of RTD dollar sales in 2022, with premixed cocktails and spirit-based RTDs growing by 4.6%, according to NIQ.
Tap Into Boozy Brunch and Opportunities to Energize
As RTD brands consider their positioning strategy, the report highlighted two opportunities that emerged from the study.
“There’s an opportunity to tie in some brunch occasions within spirit-based RTDs,” said Jenny Yu. “We know that they tend to be consumed later in the day compared to seltzers, so consider exploring spirit RTDs as an earlier-in-the-day occasion.”
Additionally, drinkers across categories were motivated to take a sip to unwind and loosen up, but the motivator to “feel refreshed and energized” was under-indexed.
“It could be an opportunity to focus on that [latter] motivation, especially among men who are more likely to use that motivation than women,” said Yu.