Ripe for a makeover

16 November, 2007

RTDs are evolving as fruit flavours gain popularity. Laura Clark reports

When Diageo rolled out Quinn's early last year, it


it the first in a new category of

RTDs made from fermented fruit juice rather than with a spirits base. Backed by an £8.5 million marketing budget that included

TV and cinema advertising, Quinn's was widely praised for reviving a



But, just a year after

launch, Diageo announced it was ditching Quinn's in a portfolio shake-up that also resulted in Archers Vea and Slate 20 being dropped in the UK. Liz Finn, head of innovation at Diageo GB, attributed the decision to Quinn's failure to make the grade in sales. "We're disappointed because we did have high hopes for it, but it hasn't worked ."

Diageo's unexpected decision to pull the plug on its three core RTD brands signalled to retailers that the

market was on the brink of collapse. Already put off by under-age drinking concerns,

some off-licences abandoned RTDs

in favour of

the likes of Californian blush wines and over-ice ciders to attract the


who had favoured the sweeter taste of RTDs.


out of all th is

has emerged a band of entrepreneurs

determined to change the

negative connotations of RTDs.

Carl Evans is director of Dorset-based Krush, the company behind the UK's first

vodka smoothie. Made from 100 per cent

fruit and five-times distilled grain vodka, Vuju comes in

raspberry and mango flavours. Evans sees his product as a premium drink, rather than labelling it

an alcopop. "It's not carbonated so it can't be called pop, and it shouldn't be tarred with the brush of bright bold colourings and preservatives," he says.

But if a producer with as much marketing muscle as Diageo had to withdraw its fruit-flavoured RTD because it

wasn't making enough money, how can a company like Krush expect to succeed? Vuju is a "different offering" to Quinn's,


Evans. "It's a smoothie without that bitter aftertaste," he says. "Diageo was expecting sales to go through the roof immediately

- we're building growth slowly . You need to raise awareness slowly, you can't expect quick returns ."

Start-up company Tapio Ventures has launched a pre-mixed rum cocktail in an attempt to turn around the categor y's faltering fortunes. "Consumers have moved on from overly sweet and sickly pre-mixed drinks that are high in artificial additives and low in quality ingredients," says marketing director Simon Hughes.

Tapio has an abv of 4.7 per cent and

is targeted at drinkers aged over 21 rather than what the company calls "the traditional RTD market".

Spurred on by the influx of cocktail bars in the UK's city centres, Henry Debenham,

co-founder of London-based Muddler Drinks, has created a range of ready-mixed fruit cocktails.


their 6.4 per cent abv, Muddler Cocktails are not RTDs,

says Debenham. "It's a premium real fruit cocktail in a bottle

that has been created to appeal to the more mature and sophisticated palates of at-home drinkers," he said.

Debenham is undeterred by Diageo's decision to axe Quinn's. "We're not trying to disguise the taste of the alcohol. The cocktail taste [of Quinn's] was still quite familiar and similar to other RTDs

and that's where our differences lie. We're not trying to hide the alcohol, we're complementing it and we don't want an artificial sweet taste," he says.

The drive to resurrect

RTD s has even been evident on reality TV, with Elizabeth Hackford chancing her luck

with fruit-flavoured RTD

V-Tox on ITV's

Tycoon .

Another entrepreneur keen to energise the

market is Lorraine Griffiths, a businesswoman

who claims to have created the UK's first sugar-free RTD. Griffiths, who came up with the idea while working in the bar and club industry,

invented Baby Blue and Baby Pink

as an alternative to mainstream RTDs . "More and more women were asking about the amount of sugar in drinks so it seemed only logical to find them an alternative," she says.


set up Sunderland-based Alcohol Brands to market and sell the range in the on and off-trades.

Beverage Brands, the company behind male-orient ed WKD, has also identified a gap in the market for an RTD aimed at calorie-counting


and launch ed Caledonian Cooler - a fruit-flavour ed vodka and sparkling water-based RTD containing 87 calories per bottle. "Caledonian Cooler is aimed at women who are health-conscious, but not obsessive . They like the fruit flavour of RTDs, but they normally reject the category on the basis of calorie content," says brand controller Debs Carter.

One thing all these producers share is


belief that the

sector can be resurrected by extending it beyond what people think of as a classic RTD .

And it's a belief

shared by Diageo, which isn't about to turn its back on the concept of RTDs. "We remain passionately committed to delivering genuine innovation into the British trade," says Julie Bramham, marketing manager for Smirnoff Ice. "There are always risks

with launching

brands, especially

new types of products like Quinn's. However, innovation remains a hugely profitable area and we will continue to look at opportunities to increase this further, including through ready-to-serve products."

The overall RTD sector might still be in 9 per cent decline (Nielsen MAT to Oct 6), but with new product development invigorating the market and offering the potential to broaden RTDs' traditional consumer base, now is certainly not the time for retailers to abandon them altogether.

Why should retailers stock RTDs?

Steve Perez, managing director, Global Brands

" A few years ago premium packaged lagers were in decline, now they are enjoying growth. RTDs are an established part of many people's drinking repertoires. We appreciate this is a tough market but proactive brands seem to be having a better time."

Julie Bramham, marketing manager , Smirnoff Ice

"RTD remains a hugely important category , worth £711 million

- almost double the size of rum and

more than twice the size of imported whiskey. The RTD category offers consumers a convenient way to enjoy spirits, and the trend toward convenience is only going to continue."

Debs Carter, brand controller, Beverage Brands

"Retailers tend to be category focused and take a view based on the performance of the category as a whole. But consumers don't just buy into an RTD category - they buy into brands within the category that are relevant to them and fit in with their lifestyle and it's important that retailers understand how important these brands are to these consumers.


Richard Clark, marketing controller, Halewood International

"Consumers continue to demand the convenience and flavours RTDs offer. RTDs will continue to be particularly

popular with 18

to 24 -year-olds and if retailers want to retain the

business of this loyal customer base then RTDs

will help them to achieve this goal."

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