Here are ten of the top trends and developments for suppliers and operators to watch.
1 Big growth for RTDs in 2023
Although still in its infancy, the RTD category generated significant growth in 2023. While increases by value were modest in beer (+0.9%) and wine (+1.2%), and spirits sales fell (-3.3%), RTDs soared 28.9%. State-by-state analysis highlights even steeper rises in places including Colorado (+60.3%) and Illinois (+48.0%). There is sizeable headroom for more growth across the US in 2024.
2 On Premise is evolving in RTD’s favor
NIQ’s TDLinx service shows the number of restaurants, bars and nightclubs rose by 1.9% between January 2023 and January 2024, with casual dining restaurants and neighbourhood bars achieving even steeper climbs. Lodging and recreation have been other standout segments—and the portable nature of RTDs means they can excel here.
3 Experiential and airport bars among the hotspots
Research for CGA by NIQ’s Channel Strategy Report found that nearly a quarter (24%) of consumers would drink RTDs in experiential bars—making them the top channel ahead of outlets like airport bars (22%), nightclubs (20%), golf clubs (19%) and music and art festivals (17%). The convenience of RTDs is particularly appealing in these sub-channels.
4 Drinkers are active, affluent and experimental
Who is the RTD drinker? CGA’s On Premise User Survey from the Fall indicates an even split in gender and a skewing towards younger drinkers, with 40% of them aged under 34. They are relatively affluent, spending an average of $212 in the On Premise per month—much more than the $160 average among all consumers. They are ready to try new drinks too, with an average of 22 brands in their drinks repertoires—double the US average of 11.
5 There’s a knowledge gap to be filled
While interest in this category is growing, results from OPUS indicate that many consumers are still unaware of the alcoholic base of their RTD and hard seltzer drinks. Brands that can successfully educate consumers about their choices can get an advantage in their purchasing decisions.
6 Assortment and recommendations drive spending
Good value for money influences just over a third (35%) of consumers to drink RTDs, making it the top factor. But they choose this category for many more reasons, including the range of available flavors (28%) and recommendations from friends (27%). The time of day, venue type and special offers are among the other leading factors. Optimising range and building advocacy are vital.
7 Opportunities in group serves
Group occasions offer some of the highest potential for RTDs. Nearly half (48%) of RTD drinks consume the category when catching up with friends, and 38% do so for celebrations. Positioning bulk RTD purchases as an option for groups can be a good way to generate trial and loyalty.
8 Bartenders recognize the value
CGA by NIQ’s Global Bartender Report highlights the value of the category to teams on the frontline of sales. More than a third (35%) of bartenders at premium venues have seen an increase in serves over the last year, with consumer demand, convenience and consistency the three top reasons for stocking. However, bartenders are also clear that RTDs are an additional option rather than a substitute for hand-crafted cocktails.
9 ABV is important
Consumers’ focus on alcohol moderation and value is making the ABV of RTDs an attractive factor. Two thirds (65%) of bartenders say it’s important or very important to RTD selection.
10 Bartenders need education too
As well as educating consumers, suppliers need to help bartenders increase their knowledge of RTDs. While more than nine in ten (93%) told the Global Bartender Report that they rate themselves as experts or very knowledgeable on cocktails, only a third (34%) do so on RTDs. More than one in five are interested in learning more, so there is a great opportunity for brands to deliver ambassador activities.
CGA by NIQ’s market-leading suite of research in the US provides much more expert analysis of the RTD category through the key lenses of sales, consumers’ preferences and bartenders’ attitudes. It delivers actionable insights that can help suppliers capture new sales and share in 2024. To learn more, contact Drew Hummel at andrew.hummel@nielseniq.com
