What 2021 holds for RTD alcoholic beverages
While the pandemic may have dented 2020 sales in some places, any setback should be temporary. RTD beverages will continue to gain market share, drawing in consumers who typically buy beer or wine. U.S. sales will reach $146 billion by 2030, an increase of about 20% annually, according to a recent study by FactMR.
Looking ahead, RTD brands will meet consumer demand by featuring more sophisticated flavors, healthier ingredients, and various alcohols. The brands that succeed will have upped their marketing and design game as well. Here are the six key trends that will shape the RTD alcoholic beverage market in 2021.
RTD beverages have become lighter, lower in carbs, and lower in alcohol content in recent years, which has helped them attract health-conscious consumers looking for wine or beer alternatives. As the wellness trend keeps rolling, consumers will be seeking drinks with organic ingredients and free of artificial colors and flavors, as well as lower-calories and lower-sugar options.
Tequila Takes Off
Tequila is the fastest-growing spirit on the market, keeping pace with the RTD alcoholic beverage sector’s growth. E-commerce liquor store Drizly reported that sales have more than doubled over the last five years. Across the globe, tequila sales increased by 5.5% in 2019 and 8.5% in the U.S. alone. Those strong tequila sales have continued into 2020. Going forward, new varieties of tequila will continue to emerge, such as barrel-aged dark tequila and smoked tequila.
As food culture continues to evolve, consumers will be looking for more exciting drinks than the same-old glass of rose or chardonnay. Their more sophisticated palettes will seek complex serves, even from convenient options. Expect more RTD beverages to showcase unexpected pairings of flavor, twists on classic cocktails, and ingredients such as botanicals. While lower-alcohol seltzers have driven RTD sales the past few years, several alternatives with higher-than-average alcohol have recently entered the market. Variety is key.
Alternative Alcohol Bases
In response to consumers looking for wheat-free and gluten-free foods and drinks, beverage companies are investigating alternative alcohol sources, and in some cases, moving away from malt entirely. While fermented cane sugar is most often used as a gluten-free base, brands will be looking further afield for the base alcohols used in RTD beverages.
Bold New Designs
At-home cocktail culture is flourishing through the pandemic. Consumers are adding their own flair to recipes, from unique garnishes to ingredients from their gardens, and posting their creations on social media. The RTD category will see elevated design as brands compete for Instagram-worthiness. Visuals will be increasingly important, with RTD brands designing color palettes, logos, and typography that appeal to their target customers.
Millennials and Gen Z consumers, in particular, prefer buying from brands that reflect authenticity and that recognize their own values and lifestyles. RTD brands that take off as competition heats up will connect to customers through the transparency and directness of their messaging. RTD brands will rely on storytelling to differentiate their products and turn to influencer marketing to spread the word on social media. Top sellers will appeal to consumers’ desire for personalized products by creating content around food-pairings, recipes, and lifestyle tips.
About the author: Ryan Close is the founder and CEO of Bartesian, the creator of the intelligent cocktail maker using capsuled flavors for on-demand, premium artisanal cocktails. Since the company’s inception in 2014, Ryan and his team of product designers, engineers, food scientists and mixologists, have worked on the single-serve cocktail machine and a lineup of expertly crafted beverage pods.
Ryan tended bar and studied finance as an exchange student at Nanyang Technological University in Singapore in college. He earned his bachelor’s degree, with honors, from Western University in London, Ontario.