It’s no surprise that the closure of the hospitality sector & the on-trade during lockdown resulted in a reported +19.4% increase in off trade booze sales, with a whopping £2.6b added to the value of the sector. Perhaps more surprising though, is that RTD products outperformed the total market with a sales uplift of +28.6%, indicating that RTD’s appeal as a convenient on-the-go solution is not the only string that the sector has to its bow!
Sales of light, easy to carry, recyclable RTD cans for the OTG occasion are likely to pick up again now that consumers are ready to socialise with friends & visit events this summer, but indications are that there is still an opportunity for further growth of RTD products that are targeted towards ‘in home’ consumption. The influx of new, high-end, letterbox pre-mixed cocktails that hit the online market during 2020 are likely to have boosted the image of RTD products & sparked the imaginations of consumers!
‘Trade up while trading down’
Premium spirits & RTD’s have an opportunity to do well in retail in 2021 despite the income squeeze, by pushing a ‘trade up while trading down’ message. Here’s why:
- RTD mixers & pre-mixed cocktails have long been regarded as low abv, mid-market drinks that service the OTG convenience need state. Yet premium pre-mixed alcoholic drinks bought from a store are seen as a good alternative to cocktails/mixed drinks bought at a pub/bar by 33% of adults. Seemingly, consumers are ready for brands to raise the bar!
- Bar-quality cocktails with indulgent ingredients & authentic provenance are what is needed to meet the more discerning consumer need. Savvy brands are responding to consumer interest in high quality, shop bought RTD’s by catering for a more sophisticated palate.
- Following the pandemic, 36% of white spirit / RTD consumers report that they are now more concerned about the healthiness of alcoholic drinks than they were before, rising to 47% amongst 18-34 yr olds. So premium RTD brands should consider the breadth of their range and look to low alcohol, low calorie (see hard seltzer!) or no artificial ingredients products, to ensure they are well positioned to cater for this group.
- A focus on how white spirits and RTDs can enhance at-home special occasions should play well in 2021 amid the income squeeze and the ever-changing rules on large-scale social mingling. Innovative flavours & sharing size formats are an opportunity to appeal to new consumers who are looking to impress their guests!
- It’s a good idea to give consumers a nudge when it comes to ‘trading up’. Promotions are essential in converting consumer interest into purchase: 37% of shoppers reportedly to buy their alcohol on deal versus the 23% grocery average.
The RTD mixer & pre-mixed cocktails sector has clearly come a long way in the last few years, but there are signs of opportunity for growth at the premium end of the market for brands that get their positioning right!
Source : Mintel White Spirits & RTD’s Match 2021 | Kantar 52 w/e 4 Oct 2020
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