11 minute read
RTD: READY TO DRINK, ALL YEAR ROUND
Ready to drink, all year round
Autumn is here but the RTD category is not cooling down, with a diversity of flavours now offering retailers a compelling proposition for winter drinkers, writes Seamus May.
While we might naturally associate the pick-up-andgo nature of RTDs with the summer occasions of picnics and pool parties, the category still connects very strongly with consumers in the winter months.
As Hannah Jukes, Insights Manager at market research organisation Shopper Intelligence, said: “The purchase frequency of RTDs is higher within the span of every few days to every week, in winter sitting at 40 per cent, compared to full year [frequency] of 31 per cent.
“RTD sales in the fridge and cool room have increased since 2019, aligning with the increase in consumption within a few hours of buying the product. Shoppers are looking to fulfil their immediate consumption needs.”
This mode of purchases and consumption has also been noted by Billson’s Brewery, which produces a wide range of popular vodka RTD flavours.
A spokesperson for the brand said: “As an impulsive category, it’s important to provide innovation and disrupt shoppers in-store to drive unplanned purchases, which will be especially important throughout the cooler months.”
However, Jukes also states that customer decisions are becoming increasingly planned, and retailers should respond accordingly, especially as the weather cools.
“Seventy-seven per cent of shoppers [are] entering the store knowing they will purchase the RTD category and less making the decision once they are in-store,” Jukes said.
“RTDs are more planned during the winter season, so suppliers and retailers ought to shift some additional focus to pre-store communication activities to reflect that and capture the shopper at the moment they’re making their drinks decision.”
Embrace the darkness
Dark spirit RTDs are likely to have a strong attraction for drinkers in the winter, and thankfully for retailers there is plenty of choice here.
Emily Nget, Brown-Forman’s Brand Manager for Jack Daniel’s RTDs, says: “There has been an explosion of NPD in the past 12 months in the light spirit space, with vodka based RTDs and a range of seltzer brands launching in market, however, bourbon/ North American whiskey still makes up 52.5 per cent of the total RTD category value and is still driving the majority of value growth + 9.1 per cent.”
This popularity is reflected in the ongoing success of Jack Daniel’s RTDs, with the brand boasting a 22.5 per cent value share in Australia, according to Nget.
“We are continuing to see strong growth across the portfolio, particularly with Double Jack (+22.5 per cent), American Serve (+20.8 per cent) and Jack No Sugar Cola 4.8 per cent ABV (+21.6 per cent),” Nget continues.
Australian brands are also seeking to tap into this popularity, as illustrated by Scott Fitzsimons, Industry Engagement & Experience Manager for Top Shelf International.
“We’ll soon be launching the new-look NED Green Sash & Cola eight per cent, a premium SKU in our RTD portfolio that utilises our new NED Green Sash Reserve premium 700ml expression,” he said.
“We’re taking a bolder, richer whisky and matching that with our cola syrup recipe to create a heightened drinking experience.”
The strength of strong serves
Long-term trends are likely to take on heightened importance as the temperatures dip, including the increasing popularity of stronger options.
“We do traditionally see a boost in our whisky ranges, particularly the higher ABV expressions. We find the cold lends itself to ‘drink less, drink better’ when it comes to RTDs and we’re already fielding calls from retailers about greater ranging for our eight per cent and 12 per cent NED options,” Fitzsimons said.
Paul Weaving, Director of Business Development for Drink Craft, strikes a similar tone.
“Wild Boar continues to be a quiet powerhouse in our portfolio… When you get out into independent retailers, you can see the presence it can command in-store. Full flavour, home pour blends have been particularly strong, with Wild Boar 15 per cent Bourbon & Cola a standout performer,” Weaving said.
Light spirit RTDs are also tapping into the stronger trend, as a recent new range from Vodka Cruiser demonstrate.
“Perhaps most exciting is the launch of Vodka Cruiser Double,” a spokesperson for Carlton & United Breweries said.
“Vodka Cruiser Double is a twist on our cult classic core offering. The new drink contains approximately two standard drinks with 6.8 per cent ABV.”
Alex Bottomley, Ampersand Projects Director and Co-founder, concurs with his fellow producers, tipping stronger products to be a key trend over the rest of 2023.
“Higher ABV offerings will deliver innovation and drive further growth in the RTD category,” he said.
Weaving predicts the popularity of strongly flavoured dark RTDs to continue throughout the winter and beyond.
“We see very little downturn in winter. Over the last couple of years, the story has been more one of growth, a winter plateau followed by further growth,” Weaving said.
“This could be partly driven by the momentum of the Wild Boar brand but more generally, our experience is that dark spirit RTDs hold up much better over the winter months.
“We expect to see this trend continue with the fuller flavour bourbon, whiskey and rum blends across the Wild Boar premium spirit range over-indexing and gaining share over the next 12 months as dark spirit RTD consumers increasingly seek out flavour and value.”
Flavour matters here too, with Billson’s Brewery offering an array of interesting ‘seasonal edition’ flavours that are natural fits for the cooler season – such as Pumpkin Spice, Gingerbread and Candy Cane.
“We like to utilise current seasonal events, like Christmas, to inspire our flavour development,” a spokesperson for the brand commented.
“We also utilise 150 year old recipes to fuse old world charm with a contemporary touch, and like to continue to engage and excite our consumers with new and different flavours.”
Leveraging the sporting occasion
Major sporting events are a hallmark of the Australian winter, with the AFL, NRL and State of Origin returning to our stadiums and screens this season. Several producers identified connecting RTDs with these events as a key means of capitalising on sales potential.
“Casual get togethers and watching sport are two of the biggest occasions for dark RTD. The NRL/AFL season being across the cooler months gives consumers a great reason to get together and enjoy a Jack RTD,” Nget says.
RTDs with light spirits bases are also looking to engage these occasions, with CUB’s Good Tides one such brand.
“Good Tides will be showing up in moments that matter and tapping into consumer passion points as the Official Seltzer of the AFL,” a CUB spokesperson said.
The prevalence of RTDs during sportswatching occasions aligns with what Shopper Intelligence has observed in its data.
“In winter, RTDs over-index significantly compared to all other drinks departments for consumption at a party/special occasion, or when socialising at a friend’s house. These are two key opportunities for RTDs during this season,” Jukes said.
The CUB spokesperson believes that this ongoing winter success is a part of the wider appeal of light RTDs.
“RTDs provide a light and refreshing option to consumers all year round… Vodka Cruiser is just as prominent in 2023 as it was at its inception in the early 2000s,” they said.
Better, whatever the weather
The big ticket sporting events will always draw attention, but Wade Tiller, Co-founder of Hard Fizz, says his brand sees success further down the sporting pyramid with everyday Aussies.
“Sporting culture is so incredibly strong in the winter months around the country and Hard Fizz has had exceptional success working with grassroot sports from netball, to AFL and AFLW and the rugby codes in local clubs wanting something ‘better for you’ in their arsenal,” Tiller said.
For these types of sporting club people, Tiller believes lighter RTDs are a natural fit.
“The reality is, the people playing local sports are more social in the winter and when they’re training hard, lower calorie drinks and lower sugar options are perfect,” he said.
Faye White, Creative Director & Marketing Manager of Wayward Brewing Co. (producer of W Seltzer), offers a tip for retailers looking to provide their customers with a creative means of using seltzer RTDs in the winter – that can also connect with the sporting occasion.
She said: “Seltzers are actually a great cocktail mixer, get experimental and create your own ultimate winter warmer. Great for apres ski if you’re heading out to the mountains!”
And like Tiller, White thinks those participating in sport this winter are more inclined to reach for seltzers and light RTDs.
“We find consumers are still looking for low calorie sessionable options whatever the weather, and seltzer is the perfect option for that,” she said.
Bottomley agrees, adding: “I believe that RTDs are now a year-round proposition due to the strength of the health and wellbeing trend and the continual need for convenience.”
This position is shared by Andy Skora, Co-founder and Director at Fellr.
“I think with RTD, especially with the seltzer category, the ‘better for you’ aspects – that doesn’t switch off after the summer, so people are looking for that option year round,” he said.
Skora does believe, however, that retailers should still be aware of a change in consumer attitude and occasion heading into the cooler season.
“When you shift from summer to winter, it’s more about that night time occasion, retailers can appeal to that, instead of just that sundown or a day-drinking session. You kind of have to switch the mindset of how the consumption happens,” he added.
Consolidation on the horizon?
Producers across the board were largely upbeat about the prospects of the RTD category across the seasons, but some did sound a note of caution about a possible consolidation coming for RTDs.
“Naturally a consolidation (much like the craft beer boom) is occurring, as there was such a proliferation of new brands entering the market,” Bottomley says.
Ampersand Projects believes that brands that are able to continually provide exciting products will be the ones to survive, and this is an important feature of its strategy.
“Innovation is our key strategic pillar and delivering new products to the market with speed (quicker than our competitors) allows us to compete against our global competitors,” Bottomley said.
White suspects that after years of experimentation, consumers may start to look towards safe bets.
“It’s hard to predict what will happen in the current climate, but generally economic uncertainties see consumers turning to their favourite brands,” she said.
“There’s been lots of opportunity for product trial over the last couple of summers, but we could see more people settling into brands that are tried and true.”
With this air of caution possibly on the horizon, Tiller advises retailers to streamline their portfolio to avoid repetition.
“RTD is still a high growth category but retailers will need to consolidate to ensure limited replication across key flavours and formats. Brands will need to differentiate to win in future markets,” Tiller said.
On the other hand, Weaving provides an overwhelmingly positive outlook - particularly for homegrown Australian products.
“We expect the RTD category to remain strong. We don’t anticipate a reduction in space at retail for the RTD category as a whole,” Weaving says.
“Bars and pubs are full again but people haven’t lost their taste for RTDs and I think that’s because we are really good at them in Australia.”
