What does the “wild west” have in common with RTD cocktails? Much like the vast frontier drew adventurers who wanted to explore new areas, the RTD cocktail market has attracted beverage pioneers, cowboys, and even a few outlaws. This diverse cast of brewers and distillers seeks to innovate in a fast-growing alcoholic beverage segment and create beverages that get repeat purchases.
The FlavorSum team has collaborated with several experts to develop guidelines and perspectives that can help you overcome several RTD cocktail formulation challenges.
RTD Cocktail Market: Exploring the Land of Opportunity
There are three main trends driving beverage manufacturers to explore RTD cocktails.
Popularity. Global consumption of RTDs increased more than 40% in 2020 (IWSR).
Growth. The global market is expected to grow more than 25% in 2021 and attain a CAGR of 10.2% through 2025 (Grand View Research).
Staying Power. In the U.S., hard seltzer gained +130% to become the leading RTD sub-segment. RTD volume consumption may soon surpass the millennial “go-to”—wine. Global sales are forecasted to reach $1.63 billion by 2027 (Innova).
Wrangling RTD Formulation Challenges
With seemingly unlimited formulation options and a “wild west” landscape where (almost) anything goes, brewers and distillers may find themselves facing unexpected challenges with no clear path forward.
Before setting out into the vast territory of the RTD cocktail market, we recommend taking time to map out a route that will deliver on your brand promise and consistently attract new and repeat customers.
Choosing Your Base
Almost 60% of North American RTD cocktail launches in 2020 were labeled seltzers. For other RTD cocktail foundations, Vodka is the most popular spirit-base with 16% of launches, and wine-based cocktails made up 14% of launches (Innova).
Sugar made from fermented beet, corn, or cane provides brewers or distillers with a clear, neutral seltzer base that’s gluten-free. Molasses, made from refined cane or beets, provides a high distillate option but will also increase the total calories of your beverage.
Malt made from mashed, boiled, fermented, and filtered grains adds a beer taste to your RTD cocktail. For many craft brewers, combining a malt base with fruit, spices, barrel aging, or oak in the tank produces a flavored malt beverage (FMB) that reflects their brand values.
Grain neutral spirits (GNS) are derived from the fermentation and distillation of germinated grains (corn, wheat, barley, or rye). They may represent a quicker path to market, as producers can create a finished clean, refined beverage within 24 hours by adding water, carbonation, and flavor to the base.
Potato and grape neutral alcohols bring unique characteristics to RTD cocktails. Potato lends a creamy texture, while vinous alcohol contains flavors from the grape residue, including pomace solids.
Spirits including tequila, gin, rum, and whiskey carry more flavor nuances and color than GNS, sugar, or malt bases.
Wines add flavor and style variety along with color to RTD cocktails.
Adding Carbonation
The amount of carbonation in your RTD cocktail will impact the beverage base, your targeted taste experience, and your brand image.
Fermentation does add some carbonation into RTD cocktails. To enhance the multi-sensory experience and depth of taste we get from the fizz of a carbonated beverage, many brewers and distillers infuse bubbles with forced CO2 bottles or pressurized carbonation systems. Applications testing is essential for achieving the right balance of sweetness, acidity, flavor, alcohol, and carbonation.
Considerations for carbonation:
- C02 solubility increases in alcohol, meaning you’ll need more g/L of carbon dioxide to produce a tingle comparable to water-based beverages.
- Sugar clings to C02, so more carbonation results in a less sweet taste experience.
- A general starting point for carbonating seltzers is approximately 3 volumes or 6 g /L. For context, sparkling waters contain 5-7 g/L, sparkling wines have as much as 9 g/L, and champagne features 12 or more g/L. Carbonating RTD cocktails could start with as little as 3 g/L and go up to 8 g/L with 10 g/L as an upper limit.
Finding the Right Flavor Profile
Flavor is a primary contributor to the appeal of RTD cocktails and a key way to boost consumer interest. Retail data from North America shows fifteen flavors accounted for 42% of flavored alcoholic beverage launches in the last three years (Mintel):
- Grapefruit
- Lime
- Mango
- Black cherry
- Lemon & Lime
- Pineapple
- Lemon
- Peach
- Strawberry
- Watermelon
- Cranberry
- Raspberry
- Wildberry/ wild fruit
- Lemonade
- Blood orange
Flavor combinations emerged as a way for manufacturers to innovate. Pineapple-coconut and strawberry-guava represented 50% of new flavored alcohols in 2020.
Flavors often align with the specific RTD cocktail bases and bring out the nuances in malt-based or spirit-based beverages. Here are the top three flavors (by % of launches) for wine and spirit-based RTD cocktails
Wine-Based
- Wine (no added flavor)
- Grapefruit
- Lemon/Lemonade
Vodka-Based
- Grapefruit
- Lime
- Mango
Tequila-Based
- Lime
- Grapefruit
- Citrus
Rum-Based
- Pineapple/coconut
- Watermelon
- Cola/root beer
Gin-Based
- Gin tonic
- Gin lime
- Cucumber
Mapping Your Trail to Success
Before forging ahead with formulation, it’s essential to discuss what kind of RTD cocktail will fit within the current company strategy. Then, you can begin mapping out a strategy to guide your beverage through the stages of development and onto retail shelves.
Partnering with a beverage developer who understands formulation and regulatory challenges can help you navigate the rocky hills and valleys of the RTD cocktail landscape.
Download our free e-book for even more in-depth formulation tips and additional guidance on adding functionality and meeting regulatory requirements.
Until then, if you need support with your RTD alcoholic beverage, connect with the FlavorSum team. We’ll share our formulation expertise, flavor creativity, and regulatory knowledge to help you blaze a trail to success.
