BevAlc Insights’ 2023 RTD Cocktail Forecast
Ready-to-drink cocktails continue to experience growth and surpass hard seltzer, driven by flavor innovation
Over the past three years, few categories have seen more stratospheric growth than ready-to-drink (RTD) cocktails, driven by consumers’ desire for high-quality, easy-to-enjoy, highly portable cocktails. And it doesn’t show any signs of slowing down. In fact, it has continued to grow. With even more brands and SKUs on the market, and as demand for hard seltzer levels off, RTDs are poised to have a bright future.
Inside the RTD Boom
In the past 12 months, RTDs accounted for a 2.8 percent share of total sales on Drizly. That’s up from 1.9 percent in 2021 and 1.1 percent in 2020. Comparatively, the hard seltzer category accounted for a 2.7 percent share of total sales in the past 12 months, compared to 3.4 percent in 2021 and 3.6 percent in 2020.
“Though it is difficult to say for sure, the correlation between the rise of ready-to-drink share with the declining share of hard seltzer in the past year is clear,” says Liz Paquette, Drizly’s head of consumer insights.
Across the U.S. alcohol market, RTD sales started to see rapid acceleration in the early pandemic years. According to NielsenIQ, year-over-year off-premise dollar sales from 2020 to 2021 increased 156 percent for spirits-based hard seltzers for the 52-week period ending October 2021, and sales for RTD cocktails grew 126 percent. By mid 2022, according to NielsenIQ, the dollar growth of spirits-based hard seltzers was another 73 percent year-over-year. RTD cocktails, tracked separately, also saw 61 percent growth.
“Canned cocktails are a convenient and quality solution for cocktail lovers,” says Earl Kight, the co-founder and chief sales and marketing officer for Cutwater Spirits. “No ingredients, no prep or clean-up. They offer controlled ABVs and consistently taste delicious.”
Today’s RTD cocktails have come a long way from decades-old predecessors like wine coolers and malt-based hard lemonades, and stand out from the fermented malt beverages and hard seltzers that also had a moment in the early pandemic years.
“The RTD category has grown from less expensive offerings made with artificial ingredients and neon colors to cocktails made with natural flavors and premium spirits,” says Kelly Gasink, the co-founder of Austin Cocktails.
While RTDs can range from full-strength cocktails to lower-ABV options that can compete with hard seltzers, premiumization has defined the trajectory across the board. The average unit price of RTDs on Drizly over the past 12 months is $13.80, up 9.5 percent from the $12.60 average sale price seen the previous 12 months. According to IWSR Drinks Market Analysis, this reflects both people who are trading up from hard seltzers and the preference for bar-quality cocktails that may come with higher ABVs. The market research group found that in 2022, the volume sold of premium RTDs rose 38 percent.
Though the overall share of sales on Drizly is relatively small, Drizly consumers are showing an affinity for RTDs. Within the spirits category, RTDs account for a 6.2 percent share of the spirits category in the past 12 months, making it the fourth-largest category after whiskey, vodka, and tequila. The RTD share of sales in the spirits category on Drizly is up from 5.6 percent in 2022, 4.2 percent in 2021, and 2.7 percent in 2020.
Which Brands and SKUs are Selling?
The increased number and variety of RTD options on the market has fueled the category’s growth, which has inspired even more brands to launch RTD products.
Despite the plethora of offerings, however, one brand, High Noon, continues to dominate the category. The brand has held the No. 1 position on Drizly’s list of top-selling RTD brands for three years running, and as of 2023 to date, it commands seven of the top 10 spots among the category’s top-selling SKUs.
“In addition to our liquid, our success is due to strategic partnerships with college sports, media, and lifestyle brands,” says Britt West, SVP and general manager of Spirit of Gallo, which owns High Noon. “These partnerships have allowed us to grow brand awareness and relevance among our target audience by showing up in the places and space that matter most to that audience.”
The top four RTD brands on Drizly have remained the same since 2021, showing strong brand resilience. Buzzballz rose from No. 8 to No. 5 and Tequila 1800 rose one spot to No. 5 from 2022 to 2023 to date. NÜTRL, Monaco, and Beatbox Beverages (Nos. 8, 9, and 10, respectively) are all new to the top-selling brands on Drizly in 2023 to date compared to 2022. Skinnygirl, Bacardi, and Crown Royal dropped out of the top 10 selling brands on Drizly in the same time period.
Drizly’s Top-Selling RTD Brands, 2023 to Date
- High Noon
- Cutwater Spirits
- On The Rocks
- Jose Cuervo
- 1800 Tequila
- The Long Drink Company
- Beatbox Beverages
Among the top-selling RTD SKUs on Drizly, High Noon commands the top three spots year-to-date, compared to the top five spots in 2022. SKUs from Cutwater and Effen Vodka are in the No. 4 and No. 5 spots, respectively, year-to-date. Still, with four other SKUs in the top 10, High Noon holds a dominant position among RTD sales on Drizly.
Drizly’s Top-Selling RTD SKUs, 2023 to Date
- High Noon Vodka Hard Seltzer Variety Pack 12x
- High Noon Vodka Hard Seltzer Variety Pack 8x
- High Noon Vodka Hard Seltzer Limited Edition Tropical Variety Pack 8x
- Cutwater Tequila Lime Margarita 4x
- On The Rocks Effen Vodka The Cosmopolitan Cocktail 375ml Bottle
- High Noon Peach Vodka Hard Seltzer 4x
- High Noon Tequila Seltzer Variety 8x
- High Noon Pineapple Vodka Hard Seltzer 4x
- On The Rocks Hornitos Tequila Margarita Cocktail 375ml Bottle
- High Noon Grapefruit Vodka Hard Seltzer 4x
In 2023 to date compared to the same period last year, the fastest-growing subcategories within RTD sales on Drizly are ready-to-drink Martinis, Daiquiris, and Punches. Tequila- and rum-based RTDs are most prevalent among the fastest-growing SKUs in 2023 to date, led by options from High Noon, Cruzan, Hornitos, Casa Zul, JuneShine, and Malibu.
When it comes to formats, cans have taken an even larger share of RTD sales on Drizly, with a 74 percent share in the past 12 months compared to a 68 percent share in 2021. It’s taken share from bottled RTDs (24 percent share in the past 12 months compared to 29 percent share in 2021), with pouch and box formats holding a one percent share each.
Drizly’s fastest-growing RTD brands are a mix of large, well-known producers—such as CIROC and Bulleit—and lesser-known names like Kin Euphorics and Encore Talkhouse.
“I think we will continue to see lots of innovation in the RTD category from both start-up brands as well as existing brands looking to find a niche in the increasingly crowded market,” says Paquette. “However, as we saw with hard seltzer and as we have already begun to see in the RTD category with High Noon, Cutwater, and On the Rocks, there will likely be three or four brands that dominate sales nationwide.”
Drizly’s Fastest-Growing RTD Brands, 2023 to Date
- Kin Euphorics
- Casa Azul
- Encore Talkhouse
- Faux Pas
- Day Chaser
Who is Buying RTDs and When?
“The younger generations have seen the most share growth in this category over the past few years as it has evolved from primarily multi-serve margaritas to a wide array of single-serve cocktail flavors,” says Paquette.
More women are purchasing RTDs on Drizly, with a 58 percent share despite holding a 52 percent share of overall sales on Drizly.
When it comes to seasonality, sales of this category remain strong and relatively stable throughout the full year. However it’s especially important for retailers to have their stock of RTDs ready going into the warmer months. Over the past 12 months, the top months for RTD sales on Drizly were July, June, and August.
Poised for Future Success
Despite representing a smaller share of overall sales on Drizly compared to leading liquor categories like whiskey or vodka, the RTD category is one for retailers to invest in. The RTD category not only has staying power, says Paquette, but its share will continue to increase. “It is small but growing piece of the total liquor category” she says, “and we believe there is still room for continued growth.”
A market analysis report from Grand View Research found that the RTD category will grow at a compound annual rate of 12.8 percent between 2022 and 2030. As more consumers turn to more premium options, the RTD category is poised to grow in both dollar amount and volume.
Paquette also predicts that consumer education will be a key driver for the RTD category. “Consumers will become savvier about what they are drinking,” she says, “from ingredients to attributes like organic and gluten-free.”
“RTDs have evolved from basic, low-ABV drinks to true, high-proof cocktails,” says Mollie Cook, the director of marketing for Molly’s Spirits in Denver. “In the past, all that was readily available was usually-too-sugary margarita mix. Now, we see a massive variety that encompasses everyone’s tastes.”