Did the pandemic put paid to hard seltzers’ potential? Are people really sharing large bottles of premixed cocktails at home? Or are we all just happy with gin in a tin? Lucy Britner investigates the ever-evolving world of the RTD
By now, we’re all familiar with the proliferation and segmentation of RTDs – the spirit/mixers, the high-abv cocktails, the 100-calories-a-can, the hard seltzer…the cast has been assembled and after some jostling, IWSR Drinks Market Analysis can reveal who’s up for the lead roles.
“RTDs grew strongly in the UK in 2021, by 20%, increasing their share of total beverage alcohol to 2%,” says IWSR market analyst Patrick Fisher. The category is “dominated by flavoured alcoholic beverages (FABs)”, he says, and has a traditional bias towards the off-trade, which meant it received a boost from on-trade closures during the pandemic.
Growth in 2021 came from FABs, cocktails/long drinks and hard seltzers – though Fisher notes it hasn’t all been plain sailing for hard seltzers. And the sub-category is perhaps set to take a supporting role, rather than the lead.
Fisher explains that hard seltzers have had a “muted response” in the UK, “but are expected to make progress on the back of the scale of investment behind them”. However, he adds: “They are not expected to reach the same level of penetration as in the US.
“Hard seltzer launches peaked in 2020 as brands speculated on US growth being replicated in the UK,” he says. “The drop in the number of launches in 2021 and H1 2022 is a reflection of the consumer response and market saturation.”
Kopparberg’s customer marketing manager Elise Hockridge, says the hard seltzers segment has found its level in terms of shelf space, “with one or two brands, and this is now commonplace across the multiple retailers”.
Kopparberg has stopped production of its hard seltzers as it looks to concentrate on its cocktails and spirit/mixers range and Hockridge says the shelf space initially allocated to hard seltzers has now largely been taken over by pre-mixed cocktails “which resonate more with the shopper”.
She says the presence of both recognised brands and/or recognised cocktails is important when it comes to selling more RTDs. And Jonathan Price, RTD buyer at the Co-op, emphasises the home cocktails movement. He expects to see the popularity of ready-to-drink cocktails grow in 2023, “driven in part by consumers looking to enjoy their go-to and much-loved cocktails at home”.
He adds: “In response, we have introduced a Co-op own-label offer ahead of the summer months, where we anticipate seeing the biggest spike in demand. The two ‘tinnies’, a Mojito and Passion Fruit Martini, will be available across our convenience stores from this month.”
Price goes on to explain that, for Co-op customers, hard seltzers are still a “relatively new concept”, with the retailer offering a small range across selected stores.
At Stirchley Wines & Spirits in Birmingham, owner Krishan Rajput says hard seltzer sales “petered out” after initial curiosity died down. However, he may look to stock local brand Berczy in the summer “but because it’s a local brand, rather than because it’s a hard seltzer”.
He says: “I think hard seltzers are summer drinks with a limited market. I don’t think they will be the game-changer some of the larger companies thought they would be.”
However, Rajput does highlight the potential in the low/no space for seltzers, minus the hard element.
“We will get some of these back for the summer – we have a strong space for alcoholfree soft drinks and there is room for options that don’t contain too much sugar,” he says.
Elsewhere, Rajput champions the importance of the spirit/mixer, and he’s also excited about pre-mixed cocktails.
“We stock cocktails in cans, such as the Pocket Negroni from Whitebox,” he says. “They are a slightly diff erent proposition. The abv and price point are higher.”
Rajput sells the 21.8% abv Pocket Negroni around the £5.50 mark. “It gives consumers the opportunity to buy something diff erent,” he says.
“The cans are eye-catching and some people buy the brand or the drink because they have heard of it, whereas others need a bit of information about why it’s more expensive than a spirit/mixer can.” And, while he’s a fan of single serves, Rajput says he “won’t touch pre-mixed cocktails in sharing bottles”.
“I think people could buy all the ingredients and probably be more satisfi ed by the end result,” he says.
Looking forward, Jo Taylorson, head of marketing & product management at Kingsland Drinks, says that, although hard seltzers haven’t taken off in the same way as they did in the US, there is defi nite demand for lower-calorie, lower-abv options.
“These target the low-tempo consumers who may want a drink at home after work, whereas bar-strength options will be more for the higher-tempo social occasions,” she explains.
Speaking of occasions, Tim Dunlop, brand director at Buzzballz distributor Hammonds, adds that the key drinking occasions for retailers to tap into are big nights in, movie and sports viewings, parties, barbecues and summer gatherings in the garden. “Ultimately, RTDs offer convenience and consistency which suits many contemporary lifestyles,” he adds.
And data from Master of Malt shows that the cost of living crisis is also influencing RTD sales. Compared to this time last year, the online retailer has seen a 60% lift in direct-to-consumer RTD sales, as drinkers look to save money by imbibing at home.
More demand will also lead to more innovation, and Kingsland’s Taylorson expects flavours to evolve, in a similar way to what we’ve just seen in the spirits category.
“The growth of RTDs was predominantly driven by gin and vodka products,” she says. “These are still the bedrock of the category, but we are seeing growth in rum-based products as well as innovative flavours. We have NPD that we will be launching in 2023 that taps into these two growth areas.”
For Chris Forbes, sales director at The Fladgate Partnership, RTDs also offer a greater variety of choice, particularly for those looking for low or no-alcohol options and people with health intolerances, such as gluten-free options.
“When you then couple these opportunities with the recyclable packaging, sustainability messages and super convenience, these drinks are perfectly positioned for the contemporary age and younger consumer,” he says.
The stage looks set for a sell-out show this summer.