What Retailers Can Learn From Drizly’s 20 Top-Selling RTD Cocktails
High Noon dominates, but the category continues to grow and diversify
Sales of ready-to-drink (RTD) cocktails soared in 2020. According to Nielsen, year-over-year off-premise dollar sales growth was 57 percent for the 52-week period ending August 8, 2020, and RTD sales were up 131 percent in September and October of last year.
As we approach the summer months when consumers socialize outdoors and pandemic gathering restrictions relax as vaccinations rise, retailers should prepare for RTDs to become even hotter commodities. In 2020, the RTD share of the liquor category on Drizly tripled from 1 percent of share in Q1 to 3 percent of share in Q2.
“Retailers should expect RTD sales to rise as the weather warms, similarly if not more significantly than last year, and should stock their shelves accordingly,” says Liz Paquette, Drizly’s head of consumer insights. “With the vaccine rollout in motion and Covid-19 cases falling, we expect to see even more outdoor socializing as we did last late spring and summer.”
To help guide retailers in their RTD purchasing decisions, we analyzed Drizly data from the past 12 months to discover the brands, flavors, pricing, and packaging styles that are likely to drive the category through 2021.
Drizly’s 20 Top-Selling RTDs, February 2020 through February 2021
- High Noon Variety Pack (single-serve)
- Skinnygirl Margarita (multi-serve)
- High Noon Pineapple (single-serve)
- High Noon Watermelon (single-serve)
- High Noon Peach (single-serve)
- High Noon Grapefruit (single-serve)
- Cutwater Tequila Margarita (single-serve)
- High Noon Black Cherry (single-serve)
- Jose Cuervo Authentic Lime Margarita (multi-serve)
- High Noon Lime (single-serve)
- Jose Cuervo Golden Margarita (multi-serve)
- 1800 Ultimate Margarita (multi-serve)
- Fishers Island Lemonade (single-serve)
- On The Rocks Effen Cosmopolitan Cocktail (single-serve)
- Cutwater Vodka Mule (single-serve)
- Cayman Jack Margarita (single-serve)
- Cutwater Tiki Rum Mai Tai (single-serve)
- On The Rocks Hornitos Margarita Cocktail (single-serve)
- Ranch Rider Ranch Water (single-serve)
- On The Rocks Jalapeno Pineapple Margarita Cocktail (single-serve)
High Noon Reigns—But Consumers Are Diversifying Preferences
High Noon’s domination of the RTD category is undeniable. According to Britt West, the vice president and general manager of spirits at E. & J. Gallo Winery, High Noon sales grew 300 percent in 2020. Not only did the High Noon variety pack become the top-selling RTD on Drizly over the past 12 months, besting longtime favorite Skinnygirl Margarita, but High Noon products currently comprise seven of the top 10 best-selling RTD SKUs.
Paquette attributes some of High Noon’s success to the fact that it’s able to position itself as both RTD and hard seltzer—in fact, the vodka-based brand refers to itself as a hard seltzer. “In liquor stores, canned RTDs like High Noon can often be found in fridges and shelves right next to their hard seltzer counterparts,” says Paquette. “Despite distribution challenges last summer, the High Noon has proven to be a consumer favorite and a great sales driver for retailers who can keep it in stock, especially as spring and summer roll around.”
Despite High Noon’s dominance, consumers are increasingly diversifying their RTD selections and reaching for newcomers, especially craft brands. In the top 20 list, alongside well-known, multi-serve RTDs like Skinnygirl and Jose Cuervo are Cutwater and Ranch Rider Ranch Water. Beyond the 20 top-selling SKUs, the fastest-growing RTD brands year-over-year in 2021 are The Long Drink Company, Crafthouse, On the Rocks, Austin Cocktails, and Two Chicks.
New Flavors Come to Play
Over the past 12 months, Drizly has seen new flavors gain share among the top-selling RTDs. Margaritas remain a consumer favorite, accounting for eight of the top 20 SKUs, but cocktails like Mai Tais and Cosmopolitans were new entrants to the list. As a result, other flavors dropped out of the top 20, including Egg Nog and Long Island Iced Tea, which accounted for four of the top 20 from early 2019 to early 2020.
“Flavor is driving the category, which includes twists on hard seltzers and seltzer-like products, like vodka sodas, as well as more cocktail flavors and types,” says Brandy Rand, COO of the Americas at IWSR Drinks Market Analysis. “We’re seeing greater diversity. There’s an RTD for every type of drinker which is driving the category’s inclusivity across all demographics.”
An Appeal to Health-Minded Consumers
The better-for-you cocktail trend shows that many customers are thinking about their health when making alcohol purchases. Many RTD brands are attuned to this consumer mindset, highlighting terms like “pure ingredients,” “organic,” and “natural” on their packaging. Rand says that in addition to portability and convenience, another big factor in the RTD category’s success is the “transparency of the exact number of calories, carbs, and other nutritional information on each package.”
High Noon is a shining example of this. “Their ingredients are very simply spelled out as ‘real vodka, real juice, and sparkling water,’ offering clarity for more health-conscious consumers,” says Paquette.
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The Shift to Single-Serve
There’s been a clear shift in the RTD category from multi-serve products like Skinnygirl and Jose Cuervo to single-serve, a more convenient and portable option. In the past 12 months, 80 percent of Drizly’s top-selling RTD SKUs were single-serve compared to 50 percent (10 out of 20) in the 12 months prior to that. Single-serve brands like On The Rocks, Cutwater, and High Noon all gained share and moved up the list.
“The pandemic spurred further growth for the RTD category,” says Paquette. “With social distancing protocols in place and many on-premise drinking venues closed or operating on tight restrictions, consumers looked for ways to safely socialize. The outdoor and distanced drinking trend took off in the late spring and early summer months, causing consumers to turn to safe and portable drink options, for which single-serve RTDs made a great option.”
Younger Consumers Have Entered the Fold
Younger consumers have caught on to the fact that RTDs share many of the same benefits of hard seltzer, especially when it comes to convenience and portability. That could explain why in the past 12 months, ready-to-drink consumers have significantly shifted to a younger demographic than the 12 months prior. The 21 to 27 (15.7 percent), 28 to 34 (29.5 percent), and 35 to 41 (25.6 percent) age groups have all gained share of RTD sales.
“With the shift towards single-serve RTDs and flavor innovation, the last 12 months has seen many new consumers enter the category,” says Paquette, “many of whom are also hard seltzer consumers, which also tend to skew younger.”
Consumers Are Spending More on RTDs
Premiumization has taken hold throughout the spirits category on Drizly, and that’s naturally trickled down to RTDs as well. On Drizly, the average unit price of RTDs has increased six percent year-over-year in the past 12 months compared to 12 months prior.
“I think there has begun to be a perception shift around the quality of RTDs and their ingredients, which has made consumers willing to pay more for these products,” says Paquette, noting that the average High Noon variety pack unit price is 12 percent higher than the average unit price for top hard seltzer brands.
Consumers don’t seem to mind, as High Noon is vodka-based and spirits generally cost more than beer. West says that the brand “has seen that the consumer is willing to pay a premium over malt-based alternatives.”
Rand adds that as higher-priced RTDs enter the market, there is still clear value for consumers. “Spirits drinkers are used to paying more for a bottle of spirits, or even a cocktail at a bar or restaurant, so a canned gin and tonic four-pack for $12 to $15 is akin to four drinks,” she says. “From that perspective, the cost-benefit is high.”