RTD: A THIRST FOR CONVIENCE

A thirst for convenience

As the weather starts to heat up, Molly Nicholas explores which trends will drive the RTD category this summer and the ways in which retailers can capitalise on its success.

In the last five years, the RTD category has experienced significant growth and now represents a large chunk of alcohol sales in Australia. As consumers increasingly seek convenience, RTDs have captured the attention of global giants and independent producers, catering to a wide array of consumer preferences and making them a go-to choice for many.

“The RTD category continues to grow, fuelled by an ever-increasing range of both known and new brands offering a convenient drink, for the most part in a 330ml can, at around four per cent ABV,” said Tom Dusseldorp, Chief Marketing Officer at Australian Vintage Limited (AVL).

“The category spans spirits, cocktails, and more recently wine-based drinks, loved for their delivery of refreshment, convenience and taste.”

Matt Sanger, Founder and Managing Director of independent canned cocktail maker Curatif, has been in the market for four years and watched the category go from strength to strength.

“Current research shows that Australians’ consumption of alcohol has been on the rise in general. RTDs are a big part of that spike, with significant growth over the last few years, to the point we’re now experiencing record highs in the category.

“A sign that RTD is having its moment is that big name players in beverage like Asahi and Beam Suntory are re-investing big in the game.”

Sipping on success

As the category continues to evolve, producers are uncovering endless possibilities when it comes to new formats and flavours. Having sold more than 4.5 million cans worth more than $19 million, Hard Fizz is Australia’s highest-ranked independently-owned alcoholic seltzer by value, and a frontrunner in the RTD space. CEO Wade Tiller spoke about the everchanging landscape of the RTD category.

“The RTD market is thriving on diversity. On one end, there’s a focus on health and wellness with low-calorie, no sugar options. On the other, consumers are looking for bold flavours and higher ABV.”

-Vanessa Wilton, Co-founder and Creative Director, Manly Spirits

“There is a lot of growth and excitement in the RTD category in a lot of different ways. Making up the RTD category you have seltzers for the third summer, which has consolidated and has strong brands which are travelling well.

“You have your high ABV light RTDs through big brands like Suntory, which has really revitalised and brought a lot of innovation to that space. You then have brands like Billson’s, which has released nostalgic flavours and injected a heap more excitement and growth.”

As customer needs evolve, Australian and international brands compete to bring new innovations to market and diversify the RTD offering. Vanessa Wilton, CoFounder and Creative Director at Manly Spirits, spoke about the vast spectrum of consumer demands.

“The RTD market is thriving on diversity. On one end, there’s a focus on health and wellness with low-calorie, no sugar options. On the other, consumers are looking for bold flavours and higher ABV. Sustainability is a key consideration in packaging choices, and flavours with unique twists, possibly borrowed from non-alcoholic categories, are gaining traction.”

Ampersand Projects, best known for Vodka Soda &, exploded into the category in 2018 and has since built its reputation as a consumer-inspired innovator. Alex Bottomley, Director of Ampersand Projects, explained how staying ahead of trends offers a competitive edge.

“We have been lucky to establish ourselves over the last five years as a brand that people recognise, off the back of our iconic ‘&’ symbol and trust due to our track record of bringing innovative products to market.

“This brand strength has made it easier for us to branch out into other categories, such as gin, tequila, ginger beer, and fullstrength spirits. The latest foray into whisky is one of the most exciting new product launches we have ever had, because the dark spirit RTD category is huge and full of big global competitors.

“We are excited to be challenging the status quo and bringing out products that are low in sugar and calories, but easy drinking and big on refreshment, all from a locally owned Australian company punching above its weight.

Merchandising RTDs in a mini-fridge near the cash register makes them a grab-and-go product just like a chocolate bar at the supermarket.

-Matt Sanger, Founder and Managing Director, Curatif

“We will be supporting retailers with plenty of free merch and sales driving tools such as GWP’s to help create excitement within their stores, as well as bringing unique and innovative products to market that drive foot traffic within stores.”

Another Australian brand pushing boundaries is Four Pillars, whose latest release of Navy Strength Gin and Ginger aims to strike a chord with cocktail fans. Modelled on the Ginger Mule cocktail, a gin-based adaptation of the popular Moscow Mule, Co-Founder and Distiller Cameron Mackenzie combined the award-winning Navy Strength Gin with a bespoke ginger beer to produce the new gin in a tin at 6.5 per cent.

“Australia has always been a really strong RTD market, and it absolutely remains in growth,” says Mackenzie. “Gin RTDs are behind the overall category, but within this Four Pillars are the number one growth driver and we hope to keep pushing it forward.

“Navy Strength Gin and Ginger was actually the very first RTD we made, even though it is the fourth one we’ve released. […] Because Navy Strength Gin is higher in alcohol, it holds more flavour which makes it the perfect gin for an RTD that requires a decent amount of mixer and can dilute the flavour of the spirit.

“The interest in higher ABV drinks has increased massively over the last few years, so this summer seemed like the perfect time to release this drink.”

In a trend that has emerged over the last two years RTDs are now experiencing greater diversity of alcohol content, as opposed to the more traditional range of three to five per cent, with higher ABV products currently driving sales across the category.

“While the better for you movement is an important driver of choice for RTDs, we’re noticing a move towards the desire for more intensity of flavour and a fuller mouthfeel,” said Dusseldorp. “Some producers are increasing ABV to around six per cent to deliver greater flavour intensity, but with Tempus One, our new wine spritzer range, we are naturally big on taste while maintaining one standard drink.”

Tiller added: “I think retailers should be conscious of that lighter style, higher ABV RTD as that’s really what the consumer wants, and it’s up to retailers to make sure they have the right offerings.”

Cocktail in a can

The RTD cocktail category has existed for many years, but the emergence of new independent brands has sparked a shift towards high quality cocktail RTDs. Contemporary RTD styles are appealing to newer and curious shoppers, with RTD cocktails appearing in a spectrum of formats, from single serve cans to larger bottles.

Striking a balance between convenience and quality, award-winning distillery Ester Spirits recreates classic cocktails of old with a flavourful twist, reinventing the at-home experience. With an RTD range that totals three cocktails, in addition to Ester’s two core gins, Co-founder and Creative Director Corinna Kovner explained why the RTD cocktail segment appeals to a wide cross-section of drinkers.

“There’s been a definite uptake in the RTD cocktail space, and we’ve seen this steadily increasing since 2020. With the advent of Covid, home consumers were looking for a bar quality experience at home, and this opened the door for brands like Ester Spirits.

We will be supporting retailers with plenty of free merch and sales driving tools such as GWP’s to help create excitement within their stores, as well as bringing unique and innovative products to market that drive foot traffic within stores.

-Alex Bottomley, Director, Ampersand Projects

“Obviously the growth of seltzer style drinks is huge, especially among younger consumers, but we have seen a really strong uptake of our pre-made spirit-based cocktails such as Bees Knees, Mandarin Gimlet and Negroni, modern interpretations of the classic gin cocktails we love.

“We personally noticed when we first launched a huge dichotomy between a drinker who is at ease making a martini, vs a gin drinker who is too terrified to venture beyond making a G&T.

“RTD cocktails give a more discerning customer the thrill and excitement of being able to have a more elevated experience than the standard seltzer. Consumers are looking for an elevated experience, but familiarity is still key. The classics reimagined with whimsical and exotic ingredients, that tell a story of its origin, offer something unique but allow consumers to feel at ease with the drinks they know and recognise.”

As craft distillers begin to navigate the RTD space, Sanger explained how the rise in independents releasing premixed products to complement their core ranges has uncovered a sense of sophistication in the category.

“Craft spirits makers, including local labels are helping everyone to drink better […] and this has helped savvy customers and neat spirits aficionados to realise that RTD no longer has to mean cheap spirit plus sugary soft drink mixer.

“You can finally find real, recognisable ingredients inside them. You can have an authentically frothy Sour or Espresso Martini and an expertly balanced Negroni in an instant. The category has undergone its premiumisation phase, consumers have now accepted that ‘hey, this cocktail in a can is actually pretty bloody tasty, crack me open another’, and thank the libation gods for that.”

Gee Up backs independent retailers

With the surge of celebrity and influencerbacked products dominating the liquor industry in recent years, independent retailers can often be overlooked. In a commitment to supporting small business over corporate conglomerates, influencers Troy Candy and Adrian Portelli have joined forces to make waves in independent stores across the country.

With a market strategy that focuses on independent bottle shops, Gee Up is an Australian-made fruity RTD backed by the team at 80 Proof, who are known for their viral fame with the West Kitty & Sour Puss range in 2020.

Carefully curating an Australian launch tour, the Gee Up team witnessed an overwhelming response with hundreds of punters flooding bottle shops to get their hands on a slab of Gee Up, selling the product out in minutes.

“You might wonder what sets this brand apart from other influencer-backed products,” said Shane Barrington, Director, 80 Proof. “Well, quite a lot. Gee Up offers a better-for-you vodka RTD that challenges the traditional notion that colourful drinks are only for a female audience.

“Troy, who openly admits to being a beer hater, coined the term ‘fruit beers’ in 2018 to encourage Australian men to explore more friendly and tastier drink options. Despite the effort, Troy still faced challenges in his campaign to switch the cynicism of colourful drinks to a male audience. That’s when he and his billionaire friend Adrian Portelli decided to create Australia’s first male-leaning fruit RTD, Gee Up.”

As Gee Up continues to fly off the shelves in independent stores across the country, the boy’s credit much of the product’s early success to their unique audience engagement. Candy and Portelli plan to remain actively involved, showing up at indies and events throughout the country to keep the momentum going.

“This refreshing outlook on influencer-backed alcohol products in 2023 promises to make a lasting impact on the independent industry,” said Barrington.

Beach to backyard

RTDs have filled a crucial gap in the market, providing a convenient option for consumers to enjoy on the go and making them especially marketable in the summer months. In a season that is synonymous with outdoor gatherings and barbecues, retailers can capitalise on consumer desire for a light, convenient refreshment by having seasonal flavour combinations well-chilled and readily available.

“By their very nature, RTDs are the ultimate carefree summer drink due to their utter convenience,” said Sanger. “Within the category, some RTDs are tailored for summer more than others. Smaller format cans are quicker to chill, which means they’re an easy sell.

“Merchandising RTDs in a mini-fridge near the cash register makes them a graband-go product just like a chocolate bar at the supermarket.”

With so many new trends steering the market, summer provides the perfect opportunity for experimenting and trying new products. At this time of year fruity flavours are especially favourable.

As Wilton explains: “Summer’s calling for RTDs with flavours that scream sunshine. Citrus zing, tropical tang and refreshing herbs are the order of the day. Seasonal flavours and limited editions, especially those from local brands, are anticipated to be in high demand.

“Keep an eye on the rapid evolution of flavour preferences – it’s akin to the pace of fast fashion. The rise of Aperol, particularly in spritzes, is a noteworthy trend pulling the fun spritz segment. Light, refreshing spritz are predicted to be the stars of the summer. Local brands like Manly Spirits are bringing the heat with our new Limoncello Zesty Spritz that will be a major rival for some of the big boys.”

Retailers’ dilemma

In a category that is so diverse, many retailers are facing the difficulty of choosing which products to stock with limited shelf space. While high profile product lines from the likes of Hard Fizz and Wild Turkey are guaranteed to sell, fresh products and innovations are also attracting attention and recruiting a broader demographic of consumers.

“The challenge facing a lot of retailers, is ‘which RTDs do I put in?’,” said Tiller. “There’s a lot of noise, a lot of innovation, and I don’t think that’s going to slow down. Trends move fast, so I think retailers need to expect continued innovation, it will probably feel overwhelming but growth in the category is coming more than ever from things that didn’t exist two or three years ago.

“While the better for you movement is an important driver of choice for RTDs, we’re noticing a move towards the desire for more intensity of flavour and a fuller mouthfeel.”

-Tom Dusseldorp, Chief Marketing Officer, Australian Vintage Limited

“It provides a challenge for anyone operating in a retail environment, because there is only so much space. Seasonally adjusting your range is something to think about, rationalising your range and considering how quickly you can move with the trends. It’s not easy for retailers, but it also presents the opportunity to seize the new and exciting brands that are going to exist this summer.”

While Wilton agrees that shelf space is restrictive and often imposes on the freedom to experiment with new brands, having some variety in your stock is the best way to cater to a growing audience.

“It’s all about balance. From sweet and trendy for the newbies, to bold and adventurous for the daredevils, and timeless classics for the traditionalists. Pack it all – cans, bottles, pouches – to suit every occasion.

“Premium or classic? Educate about the differences, from ingredients to production methods, and let them pick. Segmentation on the shelf, distinguishing between premium and classic RTDs, can help consumers find products that align with their preferences and budget.

“Special promotions and bundles are the secret sauce to getting those RTDs flying off the shelves. Coolers and fridges are the stage for RTD stardom – keep ‘em chilled and ready for action.”

With a large slice of the market looking for experimental flavours and variety, retailers can benefit from the growing popularity of the pack format. Multipacks not only allow retailers to consolidate your offering and save shelf space, but they also offer consumers variety.

“Mixed variety 10-packs are something we have ramped up production and support on,” said Tiller. “The consumer wants more variety than ever, across just about every category, and that mixed-10 shoppable format takes only one space but allows the consumer to taste across the flavours, we’re rationalising that for retailers and helping them with space.”

Wilton added: “The pack format is your playground – no set rules, just opportunities. Packs of four, six, 10, 12, 24... take your pick.”

The soaring popularity of Australia’s RTD category presents both challenges and opportunities for retailers as we approach the summer months. While the desire for convenience prevails, retailers who embrace the fluctuating trends and keep their shelves stocked with seasonal variations will make the most of this flourishing market.