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RTD Alcoholic Beverages - US - December 2015

"RTD (ready-to-drink) alcoholic beverages are in a time of transition, and, as such, are seeing both ups and downs. FMBs (flavored malt beverages) experienced strong volume sales growth of 57% from 2010-15, due to a Millennial consumer base with a bit of a sweet tooth, as well as to innovation that’s matched the demographic’s interest in product trial. At the same time, prepared spirits-based cocktails and wine coolers continue to see declines, suffering from a focus on convenience over quality, flavor nuance, and, ultimately, health. A move toward premiumization in the category overall should slow declines."

- Beth Bloom, Food & Drink Analyst

This report covers the following issues; 

  • A third of consumers are drinking less RTD alcoholic beverages
  • RTD alcoholic beverages appear pigeonholed when it comes to consumption occasions
  • Boosting perception of products in the category is in order

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • A third of consumers are drinking less RTD alcoholic beverages
            • Figure 1: Statements related to RTD alcoholic beverages – Change in consumption, September 2015
          • RTD alcoholic beverages appear pigeonholed when it comes to consumption occasions
            • Figure 2: RTD alcoholic beverage occasions, September 2015
          • Boosting perception of products in the category is in order
            • Figure 3: Correspondence analysis – Opinions toward alcoholic beverages, September 2015
          • The opportunities
            • Premiumization can enhance permissibility
              • Figure 4: Statements related to RTD alcoholic beverages – Innovation, September 2015
            • RTD alcoholic beverage formulations could stand to lighten up
              • Figure 5: RTD alcoholic beverage formats – Light/low-calorie, by generation, September 2015
            • Opportunity exists to expand chilled varieties
              • Figure 6: RTD alcoholic beverage formats – Format, by generation, September 2015
            • What it means
            • The Market – What You Need to Know

              • FMBs see strong gains, while prepared spirits-based cocktails and wine cooler declines continue
                • RTD alcoholic beverages are losing out to other alcohol types for share of stomach
                  • The category has failed to transform alongside an increasingly savvy drinking public
                    • Less than a quarter of respondents say products in the category are appropriate for drinking on-premise
                    • Market Size and Forecast

                        • Volume sales of FMBs grow 57% 2010-15
                          • Figure 7: US volume sales and forecast of flavored malt beverages, 2010-20
                          • Figure 8: US volume sales and forecast of flavored malt beverages, 2010-20
                        • Prepared spirits-based cocktail decline slows
                          • Figure 9: US volume sales and forecast of prepared spirits-based cocktails, 2010-20
                          • Figure 10: US volume sales and forecast of prepared spirits-based cocktails, 2010-20
                        • Wine coolers continue to struggle
                          • Figure 11: US volume sales and forecast of wine coolers, 2010-20
                          • Figure 12: US volume sales and forecast of wine coolers, 2010-20
                      • Market Perspective

                        • RTD alcoholic beverages are losing out to other alcohol types for share of stomach
                          • Figure 13: Alcoholic beverage consumption, September 2015
                          • Figure 14: Alcoholic beverage consumption, by generation, September 2015
                        • Category could grow appeal by capitalizing on traits of other alcohol types
                          • RTD appears as a limitation among consumers interested in customization
                              • Figure 15: Preferences for mixing own drinks versus using RTD products, by generation, September 2015
                            • Less than a quarter of respondents say products in the category are appropriate for drinking on-premise
                            • Market Factors

                              • Alcohol sales continue to rise; patterns favor on-premise consumption
                                • Figure 16: Alcoholic beverages, total expenditures, 2000-13
                              • Pop culture and on-premise trends can inform category innovation
                                • Interest in health drives call for natural, less sugar
                                  • Millennials and Hispanics influence taste preferences
                                    • Figure 17: Population by generation, 2015
                                    • Figure 18: Population growth by race and Hispanic origin, 2010-20
                                • Key Players – What You Need to Know

                                  • Party brands make way for a bit of sophistication
                                    • Premium claims are on the rise
                                      • Fruity flavors and familiar cocktail varieties wane
                                        • A focus on health is taking shape
                                        • What’s Working?

                                          • Spirits- and wine-based cocktails see strong new product launch activity
                                            • Figure 19: Share of prepared spirits-based cocktail launches, by launch type, 2010-15
                                            • Figure 20: Share of wine-based cocktail launches, by launch type, 2011-15
                                          • Premium claims on the rise
                                            • Figure 21: Share of FMB launches, by top six claims, 2011 and 2015
                                            • Figure 22: Share of prepared spirits-based cocktail launches, by top five claims, 2011 and 2015
                                            • Figure 23: Share of wine cooler launches, by top six claims, 2012 and 2015
                                        • What’s Struggling?

                                          • Fruity flavors and familiar cocktail varieties are on the decline
                                            • Figure 24: Share of prepared spirits-based cocktail launches, by top five flavors, 2011 and 2015
                                          • Packing a different kind of punch
                                            • Party brands make way for a bit of sophistication
                                              • Figure 25: Share of prepared spirits-based cocktail launches, by top 10 brands, 2011 and 2015
                                              • Figure 26: Share of FMB launches, by top nine brands, 2011 and 2015
                                              • Figure 27: Share of wine cooler launches, by top 10 brands, 2011 and 2015
                                          • What’s Next?

                                            • Premiumization may boost permissibility
                                              • Figure 28: Alcoholic beverage consumption, by consumption occasion, September 2015
                                            • Brand cache
                                              • Clean label
                                                • Imported quality
                                                  • Sophisticated format
                                                    • Bringing health to an indulgence category
                                                      • Low alcohol
                                                        • Promoting produce, not parties
                                                          • Being both RTD and customizable
                                                            • Choice may be one form of customizability
                                                              • Recipes on pack
                                                                • Shots for trial, not over-indulgence
                                                                  • Spirits selection to match larger drink trends
                                                                  • The Consumer – What You Need to Know

                                                                    • 39% of consumers aged 22+ drink RTD alcoholic beverages
                                                                      • A third of respondents say they are drinking less products in the category than they were in the past
                                                                        • Boosting perception is needed, particularly among Millennials and men
                                                                          • Premiumization leads category innovation of interest
                                                                          • RTD Alcoholic Beverage Consumption

                                                                            • 39% of respondents drink RTDs; FMBs lead
                                                                              • Figure 29: RTD alcoholic beverage consumption, September 2015
                                                                            • Men are more likely to participate in the category
                                                                              • Figure 30: RTD alcoholic beverage consumption, by gender, September 2015
                                                                            • Millennials are the prime audience
                                                                              • Figure 31: RTD alcoholic beverage consumption, by generation, September 2015
                                                                            • More than half of Hispanics drink RTDs
                                                                              • Figure 32: RTD alcoholic beverage consumption, by Hispanic origin, September 2015
                                                                            • High-income earner and foodie-centric consumer base suggests room for premiumization
                                                                              • Figure 33: RTD alcoholic beverage consumption, by household income, September 2015
                                                                              • Figure 34: RTD alcoholic beverage consumption, by interest in food, September 2015
                                                                            • A closer look at some key targets
                                                                                • Figure 35: Wine cooler consumption – CHAID – Tree output, September 2015
                                                                                • Figure 36: Alcoholic beverage consumption – CHAID – Table output, September 2015
                                                                            • RTD Alcoholic Beverage Formats

                                                                              • Bottles lead over cans
                                                                                • Figure 37: RTD alcoholic beverage formats, September 2015
                                                                              • Container
                                                                                • Millennials open to less-traditional formats
                                                                                  • Figure 38: RTD alcoholic beverage formats – Package type, by generation, September 2015
                                                                                • Cans appeal to men; women and Hispanics open to pouches
                                                                                  • Figure 39: RTD alcoholic beverage formats – Package type, by gender, September 2015
                                                                                  • Figure 40: RTD alcoholic beverage formats – Package type, by Hispanic origin, September 2015
                                                                                • Format
                                                                                  • Women and Millennials exhibit interest in multiserving varieties
                                                                                    • Figure 41: RTD alcoholic beverage formats – Container, by gender, September 2015
                                                                                    • Figure 42: RTD alcoholic beverage formats – Container, by generation, September 2015
                                                                                  • Variety represents value
                                                                                    • Figure 43: RTD alcoholic beverage formats – Container, by household income, September 2015
                                                                                  • Storage
                                                                                    • Opportunity exists to expand chilled varieties
                                                                                      • Figure 44: RTD Alcoholic beverage formats – Format, by generation, September 2015
                                                                                      • Figure 45: RTD Alcoholic beverage formats – Format, by gender, September 2015
                                                                                      • Figure 46: RTD alcoholic beverage formats – Format, by Hispanic origin, September 2015
                                                                                    • Light/low-calorie
                                                                                      • Light/low-calorie varieties find greater appeal among Millennials and Hispanics
                                                                                        • Figure 47: RTD alcoholic beverage formats – Light/low-calorie, by generation, September 2015
                                                                                        • Figure 48: RTD Alcoholic beverage formats – Light/low-calorie, by Hispanic origin, September 2015
                                                                                    • Change in Consumption

                                                                                      • A third of consumers are drinking less RTD alcoholic beverages
                                                                                        • Figure 49: Statements related to RTD alcoholic beverages – Change in consumption, September 2015
                                                                                      • Prepared spirits-based cocktail drinkers exhibit greatest increase in consumption
                                                                                        • Figure 50: Statements related to RTD alcoholic beverages – Change in consumption, by segment, September 2015
                                                                                      • Expanding flavor varieties grows consumption among category participants
                                                                                        • Figure 51: Statements related to RTD alcoholic beverages – Change in prepared spirits-based cocktail consumption, September 2015
                                                                                        • Figure 52: Statements related to RTD alcoholic beverages – Change in prepared spirits-based cocktail consumption, September 2015
                                                                                        • Figure 53: Statements related to RTD alcoholic beverages – Change in wine cooler consumption, September 2015
                                                                                    • Consumption Occasions

                                                                                      • Outdoor events lead for RTD alcoholic beverages
                                                                                          • Figure 54: RTD alcoholic beverage occasions, September 2015
                                                                                        • FMBs appear slightly more casual among category participants
                                                                                          • Figure 55: RTD alcoholic beverage occasions, by consumption, September 2015
                                                                                        • Millennials and Hispanics are open to a wide range of consumption occasions
                                                                                          • Figure 56: RTD alcoholic beverage occasions, by generation, September 2015
                                                                                          • Figure 57: RTD alcoholic beverage occasions, by Hispanic origin, September 2015
                                                                                      • Opinions toward RTD Alcoholic Beverages

                                                                                        • RTD alcoholic beverages segments experience similar limitation
                                                                                            • Figure 58: Correspondence analysis – Opinions toward alcoholic beverages, September 2015
                                                                                            • Figure 59: Opinions toward alcoholic beverages, September 2015
                                                                                          • FMBs lead for flavor among women; prepared spirits-based cocktails are convenient
                                                                                              • Figure 60: Opinions toward alcoholic beverages – Women, September 2015
                                                                                            • A third of men say they’d be embarrassed to drink RTD alcoholic beverages in public
                                                                                                • Figure 61: Embarrassment related to drinking RTD alcoholic beverages, by gender, September 2015
                                                                                                • Figure 62: Opinions toward alcoholic beverages – Men, September 2015
                                                                                              • Boosting perception among Millennials is in order
                                                                                                • Figure 63: Embarrassment related to drinking RTD alcoholic beverages, by generation, September 2015
                                                                                                • Figure 64: Opinions toward RTD alcoholic beverages – Millennials, September 2015
                                                                                              • Negatives may outweigh the positives for Hispanics and prepared spirits-based cocktails
                                                                                                • Figure 65: Opinions toward alcoholic beverages – Hispanics, September 2015
                                                                                                • Figure 66: Embarrassment related to drinking RTD alcoholic beverages, by Hispanic origin, September 2015
                                                                                              • Non-drinkers say products lack in taste, quality
                                                                                                • Figure 67: Opinions toward wine coolers, by wine cooler consumption, September 2015
                                                                                                • Figure 68: Opinions toward prepared spirits-based cocktails, by prepared spirits-based cocktail consumption, September 2015
                                                                                                • Figure 69: Opinions toward FMBs, by FMB consumption, September 2015
                                                                                            • Purchase Drivers

                                                                                              • Flavor leads purchase drivers, followed by brand
                                                                                                • Figure 70: RTD alcoholic beverage purchase drivers, September 2015
                                                                                              • Women are particularly driven by flavor
                                                                                                • Figure 71: RTD alcoholic beverage purchase drivers, by gender, September 2015
                                                                                              • Millennials less brand/flavor loyal, exhibit interest in health
                                                                                                • Figure 72: RTD alcoholic beverage purchase drivers, by generation, September 2015
                                                                                              • Higher alcohol content finds appeal among Hispanics
                                                                                                • Figure 73: RTD alcoholic beverage purchase drivers, by Hispanic origin, September 2015
                                                                                            • Innovation of Interest

                                                                                              • Nearly half of consumers interested in RTDs made with premium brands
                                                                                                • Figure 74: Statements related to RTD alcoholic beverages – Innovation, September 2015
                                                                                              • RTD innovation may find particular appeal among men
                                                                                                • Figure 75: Statements related to RTD alcoholic beverages – Innovation, by gender, September 2015
                                                                                              • Innovation is key to appealing to Millennials and Hispanics
                                                                                                • Figure 76: Statements related to RTD alcoholic beverages – Innovation, by generation, September 2015
                                                                                                • Figure 77: Statements related to RTD alcoholic beverages – Innovation, by Hispanic origin, September 2015
                                                                                              • Category participants want more
                                                                                                • Figure 78: Statements related to RTD alcoholic beverages – Innovation, by consumption, September 2015
                                                                                            • Appendix – Data Sources and Abbreviations

                                                                                              • Data sources
                                                                                                • Sales data
                                                                                                  • Fan chart forecast
                                                                                                    • Consumer survey data
                                                                                                      • Consumer qualitative research
                                                                                                        • Correspondence map methodology
                                                                                                          • CHAID methodology
                                                                                                            • Abbreviations and terms
                                                                                                              • Abbreviations
                                                                                                              • Appendix – The Market

                                                                                                                  • Figure 79: US volume consumption of beer by category, 2010-14
                                                                                                                  • Figure 80: US volume consumption of distilled spirits by category, 2013-14
                                                                                                                  • Figure 81: US volume consumption of wine by category, 2013-14
                                                                                                              • Appendix – Key Players

                                                                                                                  • Figure 82: Share of prepared spirits-based cocktail launches, by launch type, 2010-15
                                                                                                                  • Figure 83: Share of FMB launches, by top six claims, 2010-15
                                                                                                                  • Figure 84: Share of prepared spirits-based cocktail launches, by top five claims, 2010-15
                                                                                                                  • Figure 85: Share of wine cooler launches, by top six claims, 2012 and 2015
                                                                                                                  • Figure 86: Share of consumption by month, by segment, 2014
                                                                                                                  • Figure 87: Share of prepared spirits-based cocktail launches, by top five flavors, 2011-15
                                                                                                                  • Figure 88: Share of FMB launches, by top nine brands, 2011-15
                                                                                                                  • Figure 89: Share of FMB launches, by top nine brands, 2011-15
                                                                                                                  • Figure 90: Share of wine cooler launches, by top 10 brands, 2011 and 2015

                                                                                                              Companies Covered

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                                                                                                              RTD Alcoholic Beverages - US - December 2015

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