Guest article

Why there’s a retail resurgence in RTDs

By Jen Draper, marketing director, Global Brands

- Last updated on GMT

Why there's a resurgence in RTD alcohol

Related tags: RTD, Alcohol, Social media

Sales of alcohol-based ready-to-drink (RTD) formats are on the rise. Jen Draper, marketing director at independent drinks company Global Brands, outlines three key reasons why retailers are experiencing strong demand for RTDs.

Recent Nielsen data shows the alcohol-based RTD category is growing faster in the off-trade than beer, still wine, cider and spirits. RTDs are generating around £280m in sales for retailers and growing at 16.3% (52 weeks ending 1st​ Dec 2018).

Other market reports indicate ongoing growth for RTDs over the next six to seven years, while in its recent half-year results, spirits producer Diageo reported double-digit growth in RTDs across Europe.

Indeed, closer to home, one of Global Brands’ new product launches in 2018, premium canned cocktail All Shook Up, proved a top-seller in Tesco and was one of the best-performing the supermarket has seen in the category.  

From a party favourite to a premium product

Premiumisation​ is the first factor that’s driving RTD growth.

Premium is not often a characteristic associated with the category, which is more typically known for its affordability.

However, we’re seeing an emergence of pre-mixed cans featuring both premium quality spirits and mixers. These recreate authentic tasting serves of popular drinks such as gin and tonics, while meeting consumer demand for convenience – a hallmark of RTDs.

The canned formats add to the premium look and feel of the RTDs and they’re a hit among shoppers because there’s no compromise. By simply opening a can, consumers are able to appreciate the flavours of artisan spirits and hiqh-quality tonics made using natural ingredients.

Retailers can expect sales of these drinks to increase further during the spring and summer months. They’re an ideal choice for outdoor events like BBQs, garden parties and festivals.

NPD

Closely linked to premiumisation, innovation​ is the second key reason RTDs are seeing such growth. While the category is renowned for consumer loyalty, this has seen some brands take a reserved approach to New Product Development (NPD).

"Forward-thinking retailers and manufacturers are viewing the RTD category as a sleeping giant"

It’s meant that, by large, the category has often been viewed as being all about bottles of blue sugary liquid. This is changing though, with forward-thinking retailers and manufacturers viewing the category as a bit of a sleeping giant. They know that new products are more likely to stand-out and generate consumer interest. 

Being innovative was behind the success of the recent vodka-based VK range extension. As part of the NPD process, we decided to involve the most important people – VK consumers – from the start. We asked them to vote for the flavour they’d most like to see as the eighth in the range. The crowdsourcing saw tens of thousands of people vote for watermelon.

This means we’re launching a new drink that has both an on-trend colour and flavour profile (pictured above). It’ll instantly appeal to shoppers, as it’s exactly what they want.  

Social media success

All Shook Up
2018 launch All Shook Up

The third factor driving RTD sales growth is social media shareability​.

Sharing photos of food and drinks is as much a part of social media as posts about cute kittens, fashion and holidays.

RTDs work well for consumer generated social media content, because their convenient format fits those lifestyle moments people want to snap and share on the likes of Instagram.

For example, people snap themselves enjoying an RTD whilst at a festival, having a picnic, sat enjoying the sun in the garden or simply having a night-in with friends.

Shareability was key to the sales success of premium canned cocktail All Shook Up. Launched exclusively in Tesco, the range brought the taste of bar-quality cocktails to the supermarket’s shelves. There was nothing else like the range in the shops and its natural ingredients, combined with sleek and stylish cans, instantly appealed to consumers.

The drinks were shared by influencers on social media, generating mass brand exposure and leading to stocks across the country rapidly selling-out.  

Long term potential 

Jen Draper 2 - Global Brands

The combination of all three of these factors – premiumisation, innovation and shareability - is attracting new audiences to the RTD category.

And it is exactly this that’s really helping grow sales. New RTD consumers mean existing sales in the category aren’t being cannibalised as new products hit the shelves. This creates an ideal environment for long-term sales growth. 

About Global Brands: ​In the UK off trade, Global Brands’ drinks are stocked by the majority of the country’s major multiple grocery retailers, convenience stores, premium retailers, and cash and carries. The company is also a leading supplier of drinks to the UK on trade, with drinks sold in many major high street bar chains, hotel operators, late night venues and large regional brewers.  

Beyond the UK, Global Brands sells its products in 58 countries. The company prides itself on market-leading innovation. In 2015, it launched a range of premium quality tonics, mixers and soft drinks, Franklin & Sons. These are now sold in 35 countries globally. In 2017, the company evolved the RTD category to create a new offer of alcoholic soda, the Crooked Beverage Co, which is made using real fruit juice and no artificial sweeteners or flavours to provide consumers with an alternative to fruit ciders and craft beers.

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