Ready to Drink Cocktails Market

The Global Ready to Drink Cocktails Market is valued at USD 0.8 Billion in 2022 and is projected to reach a value of USD 2.3 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 14.3% between 2023 and 2030.

Premium Insights

According to Drizly, RTDs have surged in popularity over the past year, accounting for a 2.8% share of total sales, up significantly from 1.9% in the previous year and a mere 1.1% in 2020. Intriguingly, the hard seltzer category registered a slightly lower share at 2.7% in the same 12-month period, compared to 3.4% in 2022 and 3.6% in 2020. Moreover, the unprecedented circumstances of 2020-2021, characterized by COVID-19-induced lockdowns, coincided with a substantial 42% increase in revenue for Premixed, Spirits-Based RTD suppliers. This data underscores the profound impact of evolving consumer behaviors and preferences and the role of RTD cocktails in satisfying the demand for innovative, convenient, and enjoyable alcoholic beverages during challenging times.

Furthermore, as per sources, off-premise dollar sales saw a remarkable 156% increase year-over-year for spirits-based hard seltzers during the 52 weeks concluding in October 2021. Concurrently, sales of RTD cocktails demonstrated an impressive growth of 126% within the same timeframe. This trend persisted as the dollar growth of spirits-based hard seltzers surged by another 73% by mid-2022, and separately tracked RTD cocktails continued their ascent with a notable 61% growth. This robust expansion underscores the strong demand for ready-to-drink beverages attributed to convenience, diverse flavors, and shifting lifestyle preferences.

Moreover, technological advancements in the RTD cocktail market have significantly enhanced product quality, variety, convenience, and accessibility. These developments have broadened the consumer base and revolutionized how people enjoy cocktails, making them a popular choice for those looking for a quick and easy drinking experience. For instance, in the United States, Diageo Plc introduced a line of flavored, low-calorie RTD cocktails under the Ketel One brand. The product has vodka, botanicals, natural fruits, and sparkling water. It has three strong flavors: Peach & Orange Blossom, Cucumber & Mint, and Grapefruit & Rose. Likewise, the Coca-Cola Company and Constellation Brands Inc. announced a brand authorization agreement to introduce FRESCA Mixed, full-flavored, spirit-based RTD cocktails in the United States. To bridge the gap between refreshing hard seltzers and full-flavored bar cocktails, the FRESCA brands aim to appeal to consumers wanting fuller-flavored experiences and higher-quality RTD beverages.

Key Highlights

• North America accounted for the most significant growth, with a revenue share of 35.3% in 2022.
• The Asia Pacific region is projected to control the market during the projection period.
• Based on Alcohol Base, the Spirit-based segment accounted for the most considerable market growth and contributed more than 42.1% of the total revenue share in 2022.
• Based on Flavour, the Flavoured segment revealed the most significant market growth and contributed more than 62.6% of the total revenue share in 2022.
• Based on Packaging, the Bottles segment accounted for the potential market growth with more than 54.3% of the total revenue share in 2022.
• Based on the Distribution Channel, the Hypermarkets/Supermarkets segment accounted for the potential market growth with more than 53.7% of the total revenue share in 2022.

Top Market Trends

1. RTD cocktails are gaining popularity due to their convenience and the growing trend of at-home consumption. Consumers are looking for well-crafted cocktails that can be enjoyed without the hassle of mixing ingredients.
2. The RTD cocktail market is shifting towards premium and high-quality products. Brands use high-quality spirits and mixers to deliver consumers a premium taste and experience.
3. Consumers are increasingly interested in craft and artisanal products, and the RTD cocktail market is no exception. Brands incorporate craft techniques and premium ingredients to create unique offerings that stand out from mass-produced alternatives.
4. The RTD cocktail market has an increasing demand for healthier and lower-calorie choices. Brands are responding by offering low-sugar, low-calorie, and organic alternatives to cater to health-conscious consumers.

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Economic Insights

Economic issues such as changes in disposable income and consumer shopping habits can impact the RTD cocktail industry. During periods of economic downturn, consumers may opt for more affordable drinks or reduce their alcohol consumption. On the other hand, during economic growth, consumers may have higher disposable income and be more willing to spend on premium or higher-priced RTD cocktails. In addition, the supply chain for RTD cocktails involves various stages, from sourcing raw materials to manufacturing, packaging, and distribution. Key stakeholders frequently work with suppliers and manufacturers to ensure a consistent supply of quality ingredients. Packaging and distribution logistics are crucial for maintaining RTD cocktails' shelf life and quality, as they need to reach consumers in a ready-to-consume state.

Market Segmentation

The Global Ready to Drink Cocktails Market can be categorized in:

The global Ready to Drink Cocktails market can be categorized into Alcohol Base, Packaging, Distribution Channel, Flavour, Region. The Ready to Drink Cocktails market can be categorized into Malt-based, Spirit-based, Wine-based based on Alcohol Base. The Ready to Drink Cocktails market can be categorized into Bottles, Cans based on Packaging. The Ready to Drink Cocktails market can be categorized into Hypermarkets/Supermarkets, On-trade/Food Service, Online, Liquor Stores based on Distribution Channel. The Ready to Drink Cocktails market can be categorized into Natural/Unflavored, Flavored based on Flavour. The Ready to Drink Cocktails market can be categorized into North America, Europe, Asia Pacific, Latin America, Middle East & Africa based on Region.

Based on Alcohol Base

Spirit-based Dominates the Market Owing to the Increased Prevalence of Social Gatherings

The Spirit-based segment has experienced remarkable growth within the Ready to Drink Cocktails market in 2022. This expansion can be linked to rising desire for convenience, the popularity of specialty cocktails, the appeal of distinctive flavors, and the increased incidence of social gatherings. In addition, the COVID-19 pandemic has also significantly impacted the growth of the spirit-based segment in the RTD cocktails market. With the closure of bars and restaurants in many countries during lockdowns, consumers turned to at-home entertainment and sought alternatives to their favorite cocktails. This increased demand for RTD cocktails, including the spirit-based variants, as consumers sought convenient ways to enjoy their favorite alcoholic beverages at home.

Based on Flavour

Flavored to Witness Significant Growth Owing to the Changing Consumer Preferences and the Influence of Millennials

The Flavored segment is anticipated to have substantial market growth in 2022, owing to changing consumer preferences, the influence of millennials, expanding product offerings, health-conscious trends, convenience factors, and improved availability and accessibility. In addition, Flavored RTD cocktails are increasingly becoming available in various retail channels, including grocery stores, liquor stores, convenience stores, and online platforms. These products' comprehensive distribution network and availability have made them more accessible to consumers, allowing them to try different flavors and brands quickly.

Based on Packaging

Bottles to Dominate the Market Growth Owing to the Perception of Higher Quality

The bottles segment accounted for the most significant growth of the market in 2022. This growth is driven by convenience, taste, and the consumer demand for innovative and ready-to-consume alcoholic beverages. In addition, bottles offer a longer shelf life than other packaging formats, such as cans or pouches. This is particularly important for consumers who may not consume the entire RTD cocktail in one sitting. Bottles allow consumers to reseal the product and store it for later consumption, ensuring freshness and reducing wastage.

Based on the Distribution Channel

Hypermarkets/Supermarkets to Dominate the Market Growth Owing to the Changing Consumer Behaviour and Preferences

The Hypermarkets/Supermarkets segment had the most significant market growth in 2022. This expansion can be ascribed to shifting consumer convenience desires, increased variety and creativity in RTD drink offerings, appealing packaging alternatives, and the COVID-19 epidemic. Furthermore, the hypermarkets/supermarkets serve as ideal distribution channels for RTD cocktails due to their expansive shelf space and existing customer base. These stores can stock a wide range of RTD cocktail brands and flavors, providing consumers with ample choices. In addition, the affordability of RTD cocktails compared to purchasing individual spirits and mixers separately makes them an attractive option for many consumers.

Based on Region

North America Holds a Prominent Market Share Owing to the Increasing Popularity of Cocktail Culture

In 2022, North America held a sizable market share in the worldwide Ready to Drink Cocktails market. This expansion can be linked to various factors, including shifting customer choices and behaviors, increased convenience, and the growing popularity of cocktail culture. In addition, the rise of cocktail culture has also contributed to the growth of the RTD cocktails market in North America. Cocktails have become more than just a drink but a form of art and social experience. This has increased interest in cocktails and mixology, with consumers seeking unique, high-quality beverages. RTD cocktails have capitalized on this trend by offering various flavors and combinations catering to consumer preferences. They provide an easy and accessible way for consumers to enjoy a well-crafted cocktail without visiting a bar or investing in expensive ingredients.

Competitive Landscape

Players help the market grow and expand by offering new and innovative items, employing efficient marketing tactics, and targeting certain consumer segments. Ready to Drink (RTD) cocktail manufacturers continuously invest in research and development to create new and exciting flavors, ingredients, and packaging formats. By launching innovative products, players attract consumers looking for convenience, variety, and taste in their cocktails.

The key players in the Global Ready to Drink Cocktails market are – The Absolut Company (Sweden), House of Delola LLC (Spain), Diageo PLC (UK), Brown-Forman (U.S.), Bacardi Limited (Cuba), Asahi Group Holdings Ltd. (Japan), Pernod Ricard (France), Halewood Wines & Spirits (UK), SHANGHAI Bacchus Liquor Co. Ltd. (China), Suntory Holdings Limited (Japan), Manchester Drinks Company Ltd. (UK), Anheuser-Busch InBev (Belgium), to note a few.

Recent Market Developments

• In April 2023, Absolut launched three flavors of RTD cocktails. These flavors include coffee, strawberry, and passion fruit. The new product range has only 5% ABV and was launched in the UK in May 2023.
• In April 2023, American singer and actress Jennifer Lopez launched ‘The House of Delola’ a premium range of spirit based and organic RTD cocktails. Launched in three flavors, namely Bella Berry Spritz (10.5% ABV), L’Orange Spritz (10.5% ABV), and Paloma Rosa Spritz (11.5% ABV), the cocktails are enhanced with fruit flavors and have fewer calories.
• In January 2022, The Coca-Cola Company signed a brand authorization agreement with Constellation Brands Inc. to launch FRESCA Mixed, full-flavored, spirit-based RTD cocktails in the U.S. The FRESCA brands aim to appeal to consumers seeking fuller-flavored experiences and higher-quality RTD cocktails to bridge between refreshing hard seltzers and full-flavored bar cocktails.

Segmentation of the Global Ready to Drink Cocktails Market