A recent study from IWSR Drinks Market Analysis confirms what beverage industry experts and financial analysts have been saying for months. Ready-to-drink (RTD) beverages are not a dying fad. In fact, the category is projected to double its volume shares from 4% to 8% of total beverage alcohol between now and 2025.

RTD beverages such as hard seltzers and canned cocktails have dominated the market for the past several years. The category’s success was propelled by a change in consumer drinking habits brought on by the pandemic. In 2020 RTDs became the unofficial beverages of quarantine and by the early months of this summer the industry was already preparing for another sizzling seltzer season.

In July the flourishing category almost saw its reign interrupted after the Boston Beer Company (NYSE: SAM) reported falling short of its Q2 top and bottom line as a result of the underperformance of the alcohol beverage company’s hard seltzer brand, Truly. SAM missed its revenue goals by almost $50 million and is currently facing a class action lawsuit filed by shareholders who suffered significant losses.

After Boston Beer’s misstep, major media outlets announced that hard seltzer’s fifteen minutes of fame had come to an end and, for a brief moment, the future of the bubbly beverages seemed uncertain. Experts and analysts were quick to come to the defense of RTD beverages, pointing to an evolution in consumer habits caused by the over-saturation of the category and the shift to on-premise drinking as the pandemic neared its end.

New data from the IWSR, “the global benchmark for beverage alcohol data and intelligence,” echoes the positive sentiments. “RTDs are still growing at higher rates than spirits, wine, and beer, signaling a major shift in consumer interest in this category across all demographics,” stated Brandy Rand, Chief Operating Officer of the Americas for IWSR Drinks Market Analysis. “But it’s important to note that RTDs aren’t only stealing share from beer, they’re also attracting spirits consumers in markets such as Australia and the UK, and cider drinkers in South Africa.”

RTD beverages have already made a name for themselves in the United States with the hard seltzer subgenre hurdling the overall category into popularity. But the global category is still very much in its infancy.

“Hard seltzer volumes outside the US are small, but awareness is also low. As that awareness grows, we’re seeing that people are increasingly willing to consider trying these products,” Rand continued. “It’s important to remember that it took a few years for hard seltzers to catch on in America, and we’re still in early days in this category outside the US.”

According to IWSR data, hard seltzers will continue to gain global traction. By 2025 half of the worldwide RTD volumes will be comprised of hard seltzers.

“We’re seeing a significant premiumization trend in RTDs as more and more new brands enter the space,” explained Rand. Canned cocktails and hard seltzers featuring spirits instead of malt liquor, real juices and bar-quality ingredients are stepping up the game. Many brands are even partnering with acclaimed mixologists to ensure their canned recipes are just as balanced and flavorful as a made-to-order cocktail.

“It’s not just consumers who benefit from interesting and innovative RTD products, so too do global drinks companies. More than any other category, RTDs have truly captured and leveraged the trend of convergence in the beverage industry,” insisted Rand.

“Many well-known brands, from water to energy drinks to coffee, have recently crossed over into alcoholic RTDs, leading to several strategic partnerships between soft drinks, beer, and spirits companies to successfully leverage distribution across multiple outlets.”

The IWSR’s research highlights the countless opportunities the dynamic RTD category has to expand into the global market and beyond. The data is further proof that RTD beverages are just beginning to sparkle.

Shirani Jayasuriya
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