How RTD Cocktails are Bubbling Up Refreshing Success with Consumers
Ready-to-drink (RTD) alcoholic cocktails, including flavored malt beverages (FMBs), have quickly gained favor (and market share) because they provide a solution that converges on several consumer needs. They are:
- Convenient, initially for on-the-go occasions and now as in-home drinks that help people relax and unwind.
- Better-for-you alternatives to traditional alcohols, with lower-calorie and reduced ABV (alcohol by volume).
- Flavorful, a leading growth driver for alcoholic beverages, according to IWSR.
This month’s FlavorSum Insights examines the market, consumer, and flavor dynamics of RTD Cocktails to inspire your next beverage creation.
Market Spotlight: RTD Cocktails
The global RTD spirit-based cocktail market reached almost $785 million in 2020 and has a robust forecast of 12 percent compound annual growth through 2028. About one-third of sales, or $259 million, happen in North America, with the U.S. the largest region. Add more than $4 billion of FMBs to the mix, and these convenient, BFY, flavorful drinks capture almost 3 percent of alcoholic beverage sales.
- RTD cocktail volume jumped 62 percent last year in the U.S., driven by hard seltzer consumption, which increased by triple digits across North America.
- IWSR reports that seltzers represent about 56 percent of the RTD market, followed by flavored alcoholic beverages with 26 percent and pre-mixed spirit-based cocktails at 7 percent.
The versatility of neutral alcoholic bases, creativity in flavor development, and evolving consumer needs are key factors fueling innovation.
Category in Focus: RTDs’ Mixology, Functionality, and Higher ABVs Attracting More Consumers
While early RTD alcoholic beverage entrants targeted younger consumers with light taste profiles, the category is getting a wider audience by offering:
- Premium spirit bases such as gin, rum, tequila, and whiskey. Consumers are becoming more discerning and asking questions about where and how the brand is made.
- Innovation Tip: History and heritage credentials can boost credibility for RTDs.
- Higher ABV with recent launches bumping alcohol levels from the average 4-5 percent up to 9, 14, or even 38 percent!
- Innovation Tip: RTDs made with a spirit face a higher tax rate than seltzers or flavored alcoholic beverages and have narrower distribution channels (usually wine or liquor stores).
- More complexity through craft twists on the classics or local ingredients like blending honey and lemonade with a whiskey base or canning signature drinks like Canada’s Bloody Caesar.
- Innovation Tip: Conduct a ‘market sweep’ to learn about craft cocktails in your region and invest in online research to see which cocktail recipes are bubbling up with consumers.
- Health & wellness functionality through characteristics such as organic ingredients, natural flavors, sugar alternatives, blends with probiotic-rich kombucha, and infusions of botanicals or CBD.
- Innovation Tip: Functional ingredients can add complexity and ‘off’ notes to RTD alcoholic beverages, so work with an expert flavor solutions provider to get the right balance.
- Hard versions of popular beverages like coffee, tea, and lemonades.
- Innovation Tip: Nitrogenating adds a ‘softer’ fizz than carbonation which can help deliver a smoother flavor experience.
- Flavors that are popular and intriguing. North American retail data from Mintel’s Global New Products Database (GNPD) shows 15 single flavors accounted for 42 percent of flavored alcoholic beverage launches in the last 3 years. Grapefruit, Lime, and Mango are the top 3 single flavors. But flavor blends represented 50 percent of new RTD alcoholic beverages.
- Innovation Tip: Explore flavor blends that combine a familiar taste with something less known like Strawberry-Guava or Ginger-Pomelo.
RTD cocktails still surface at the beach, but now they’re popping up after 18-holes, sipped over ice during movie night, or served at an evening get-together.
For more information and insights to support your RTD Cocktail launch, download our e-book: How to Master Formulation Challenges in the Wild West of RTD Cocktails.
This e-book will help you:
- Choose an RTD cocktail base
- Determine the right amount of carbonation
- Find the right flavor profile
- Meet regulatory requirements
- Decide whether to include functional ingredients
And contact the FlavorSum team for the solutions, expertise, and responsiveness you need to accelerate your success. We’ll help you meet launch deadlines and delight customers with delicious RTD cocktails.
Whittle & Mutch Joins the FlavorSum Platform
Whittle & Mutch, a U.S.-based formulator of flavors primarily for refreshing beverages, brings an extensive portfolio of flavors for carbonated and still beverages to FlavorSum.
Founded in 1892, the family-owned-and-operated company brings new capabilities to FlavorSum:
- An expanded portfolio of beverage flavors and concentrates, emulsions, and hydro-alcoholic extraction.
- Deep expertise in an evolving and growing category
- More manufacturing space with a 35,000 sq ft facility in Mt. Laurel, NJ
Celebrating our Growing Team
In addition to welcoming the 20-member Whittle & Mutch group, we’re pleased to have new team members at our Kalamazoo facility:
R&D: Blake L
Production: Coery S
In the September issue of FlavorSum Insights:
Meeting Consumer Needs for Functional Foods & Beverages
Connect with FlavorSum Discover for Daily Flavor News
And for daily flavor news, connect with us through LinkedIn.