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RTD Alcoholic Beverages - US - December 2016

"RTD (ready-to-drink) alcoholic beverages make up a small share of alcohol sales. Fortunately, declines among prepared spirits-based cocktails and wine coolers may be slowing. The category delivers on convenience, with the highest percentage of participants turning to RTDs over other alcohol types because they don’t require preparation. Addressing consumption barriers, including the lack of customizability and concerns over sugar/calorie/artificial ingredient totals will be necessary to retain interest."
- Beth Bloom, Senior Food & Drink Analyst

This report discusses the following key topics:

  • FMBs continue to lead the market, but a slowdown can be seen
  • Prepared spirits-based cocktails have struggled, but are poised for a boost
  • The category is limited by lack of customization, high sugar content

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • FMBs continue to lead the market, but a slowdown can be seen
            • Figure 1: US volume sales of flavored malt beverages, 2011-21
          • Prepared spirits-based cocktails have struggled, but are poised for a boost
            • Figure 2: US volume sales of spirits-based prepared cocktails, 2011-21
          • The category is limited by lack of customization, high sugar content
            • Figure 3: Consumption barriers, September 2016
          • The opportunities
            • Ease of use leads reason for consumption of RTD alcoholic beverages
              • Figure 4: Reasons for consumption of RTD alcoholic beverages, September 2016
            • Consumers are adopting a wider range of format sizes
              • Figure 5: RTD alcoholic beverage format – Size, September 2015 and 2016
            • Leading drink types on-premise can inform CPG innovation
              • Figure 6: Leading cocktail mentions on menu, Q3 2016
            • What it means
            • The Market – What You Need to Know

              • FMBs continue to lead the market, but growth slows
                • Prepared spirits-based cocktails are poised for a boost
                  • Wine coolers continue downward trajectory
                    • Beer leads alcohol consumption
                    • Market Breakdown

                      • FMBs continue to lead market, but growth slows
                        • Figure 7: US volume sales of flavored malt beverages, 2011-21
                      • Henry’s Hard Soda allows for a double splurge
                        • Figure 8: “Live Hard-ish: Hard Orange | Henry's Hard Soda,” February 2016
                      • Prepared spirits-based cocktails are poised for a boost
                        • Figure 9: US volume sales of spirits-based prepared cocktails, 2011-21
                      • Smirnoff Sourced offers perception of quality, customizability
                        • Wine coolers continue downward trajectory
                          • Figure 10: US volume sales of wine coolers, 2011-21
                        • Barefoot launches wine spritzers
                        • Market Perspective

                          • Beer leads alcohol consumption
                            • Figure 11: Alcohol consumption – Any drink*, October 2015
                            • Figure 12: Correspondence Analysis – Perceptions of alcoholic drink types, October 2015
                            • Figure 13: Perceptions of types of alcoholic drinks, October 2015
                        • Key Players – What You Need to Know

                          • Bottles dominate launches
                            • Premium claims are up in most segments
                              • Standard FMB flavors are on the decline
                                • Leading drink types on-premise can inform CPG innovation
                                • What’s Working?

                                  • Bottles dominate launches
                                    • Figure 14: FMB launches, by pack type, 2012-16*
                                    • Figure 15: Prepared spirits-based cocktail launches, by pack type, 2012-16*
                                  • Premium claims are up in most segments
                                    • Figure 16: FMB launches, by leading claims, 2012-16*
                                    • Figure 17: Prepared spirits-based cocktail launches, by leading claims, 2012-16*
                                    • Figure 18: Wine cooler launches, by leading claims, 2012-16*
                                • What’s Struggling?

                                  • Standard FMB flavors are on the decline
                                    • Figure 19: FMB launches, by leading flavors, 2012-16*
                                    • Figure 20: Prepared spirits-based cocktail launches, by leading flavors, 2012-16*
                                    • Figure 21: Wine cooler launches, by leading flavors, 2012-16*
                                • What’s Next?

                                  • On-premise inspired innovation
                                    • Figure 22: Leading cocktail mentions on menu, Q3 2016
                                  • Craft focus can stretch into RTD
                                    • RTDs lighten up
                                    • The Consumer – What You Need to Know

                                      • Slightly over a third of respondents consume drinks in each of the measured segments
                                        • Consumers are adopting a wider range of format sizes
                                          • Supermarkets lead as RTD alcoholic beverage purchase location
                                            • Ease of use leads reason for consumption of RTD alcoholic beverages
                                              • The category is limited by a lack of customization, sugar content
                                                • Standard liquor-based drinks find appeal among younger drinkers
                                                • RTD Alcoholic Beverage Consumption

                                                  • Slightly over a third of respondents consume drinks in each of the measured segments
                                                    • Figure 23: RTD alcoholic beverage consumption – Any consumption, September 2016
                                                  • Men make up a larger share of RTD alcoholic beverage consumers
                                                    • Figure 24: Share of RTD alcoholic beverage consumption – Any consumption, by gender, September 2016
                                                  • Millennials make up the vast majority of RTD alcoholic beverage drinkers
                                                    • Figure 25: Share of RTD alcoholic beverage consumption – Any consumption, by generation, September 2016
                                                  • Millennials earning $75K+ are most likely to be high-volume consumers
                                                    • Figure 26: Consumption – CHAID – Tree output, September 2016
                                                    • Figure 27: Consumption – CHAID – Table output, September 2016
                                                    • Figure 28: RTD alcoholic beverage consumption – Any consumption, by age and income, September 2016
                                                  • Mean consumption of flavored alcoholic beverages is on the decline
                                                    • Figure 29: Mean # flavored alcoholic beverages consumed, 2012-16
                                                • RTD Alcoholic Beverage Format

                                                  • Package
                                                    • Bottles continue to lead RTD alcoholic beverage format, cans gain
                                                      • Figure 30: RTD alcoholic beverage format – Package, September 2015 and 2016
                                                    • Men are stronger targets for cans than are women
                                                      • Figure 31: RTD alcoholic beverage format – Package, by gender, September 2016
                                                    • A quarter of Millennial drinkers use pouch formats
                                                      • Figure 32: RTD alcoholic beverage format – Package, by generation, September 2016
                                                    • Size
                                                      • Consumers are adopting a wider range of format sizes
                                                        • Figure 33: RTD alcoholic beverage format – Size, September 2015 and 2016
                                                      • Men are the strongest targets for individually portioned shots
                                                        • Figure 34: RTD alcoholic beverage format – Gender, September 2015 and 2016
                                                      • Small sizes and variety appeal to Millennials
                                                        • Figure 35: RTD alcoholic beverage format – Generation, September 2015 and 2016
                                                      • Storage
                                                        • Frozen usage stalls
                                                          • Figure 36: RTD alcoholic beverage format – Storage, September 2015 and 2016
                                                        • Frozen formats have the potential to resonate with younger consumers
                                                          • Figure 37: RTD alcoholic beverage format – Storage, by generation, September 2015 and 2016
                                                        • Light/low-calorie
                                                          • Use of light/low-calorie versions increase
                                                            • Figure 38: RTD alcoholic beverage format – Light/low-calorie, September 2015 and 2016
                                                          • Nearly one quarter of men drink light/low-calorie versions
                                                            • Figure 39: RTD alcoholic beverage format – Light/low-calorie, by gender, September 2015 and 2016
                                                          • Light versions may also appeal to Millennials
                                                            • Figure 40: RTD alcoholic beverage format – Light/low-calorie, by generation, September 2015 and 2016
                                                          • Flavors
                                                            • Tropical drink options lead consumption
                                                              • Figure 41: Alcoholic cooler flavors consumed, 2012-16
                                                          • Purchase Location

                                                            • Supermarkets lead as RTD alcoholic beverage purchase location
                                                              • Figure 42: RTD alcoholic purchase location, September 2016
                                                            • Men are a stronger audience for online, on-premise sales
                                                              • Figure 43: RTD alcoholic purchase location, by gender, September 2016
                                                            • Millennials are open to a range of purchase channels
                                                              • Figure 44: RTD alcoholic purchase location, by gender, September 2016
                                                          • Perception of RTD Alcoholic Beverages

                                                              • Strongest association with pre-mixed spirts-based cocktails is positive
                                                                • Figure 45: Prepared spirits-based cocktail terms, October 2016
                                                              • FMBs are strongly associated with convenience
                                                                • Figure 46: Flavored malt beverages terms, October 2016
                                                              • Wine cooler perception mixed, associated with low alcohol/young drinkers
                                                                • Figure 47: Wine cooler terms, October 2016
                                                            • Reasons for Consumption

                                                              • Ease of use leads reason for consumption of RTD alcoholic beverages
                                                                • Figure 48: Reasons for consumption of RTD alcoholic beverages, September 2016
                                                              • Ease of use is an especially strong driver for women
                                                                  • Figure 49: Reasons for consumption of RTD alcoholic beverages, by gender, September 2016
                                                                • Promotion of convenience may help drinks appeal to older consumers
                                                                  • Figure 50: Reasons for consumption of RTD alcoholic beverages, by generation, September 2016
                                                              • Barriers to Consumption

                                                                • Category limited by lack of customization, sugar content
                                                                  • Figure 51: Consumption barriers, September 2016
                                                                • Health is the strongest barrier for women, men are aware of perception
                                                                    • Figure 52: Consumption barriers, by gender, September 2016
                                                                  • Barriers vary across generations
                                                                      • Figure 53: Consumption barriers, by generation, September 2016
                                                                  • Ideal RTD Alcoholic Beverages

                                                                      • Standard liquor-based drinks find appeal among younger drinkers
                                                                        • Pushing flavor boundaries can attract savvy explorers
                                                                        • Beverage Classification

                                                                          • Consumers don’t have a strong ability to discern between RTD alcoholic beverage types
                                                                              • Figure 54: Correspondence analysis – Beverage classification, September 2016
                                                                              • Figure 55: Beverage classification, September 2016
                                                                          • Appendix – Data Sources and Abbreviations

                                                                            • Data sources
                                                                              • Sales data
                                                                                • Consumer survey data
                                                                                  • Consumer qualitative research
                                                                                    • CHAID methodology
                                                                                      • Correspondence analysis methodology
                                                                                        • Abbreviations and terms
                                                                                          • Abbreviations
                                                                                          • Appendix – Market

                                                                                              • Figure 56: US volume sales of flavored malt beverages, 2011-21
                                                                                              • Figure 57: US volume sales of spirits-based prepared cocktails, 2011-21
                                                                                              • Figure 58: US volume sales of wine coolers, 2011-21
                                                                                              • Figure 59: US volume consumption of beer, by category, 2014-15
                                                                                              • Figure 60: US volume consumption of distilled spirits by category, 2014-15
                                                                                              • Figure 61: US volume consumption of wine by category, 2014-15
                                                                                          • Appendix – Key Players

                                                                                              • Figure 62: FMB launches, by leading claims, 2012-16*
                                                                                              • Figure 63: Prepared spirits-based cocktail launches, by leading claims, 2012-16*
                                                                                              • Figure 64: Wine cooler launches, by leading claims, 2012-16*
                                                                                              • Figure 65: FMB launches, by leading flavors, 2012-16*
                                                                                              • Figure 66: Prepared spirits-based cocktail launches, by leading flavors, 2012-16*
                                                                                              • Figure 67: Wine cooler launches, by leading flavors, 2012-16*
                                                                                              • Figure 68: FMB launches, by pack type, 2012-16*
                                                                                              • Figure 69: Prepared spirits-based cocktail launches, by pack type, 2012-16*
                                                                                              • Figure 70: Wine cooler launches, by pack type, 2012-16*
                                                                                              • Figure 71: FMB launches, by packaging material, 2012-16*
                                                                                              • Figure 72: Prepared spirits-based cocktail launches, by packaging material, 2012-16*
                                                                                              • Figure 73: Wine cooler launches, by packaging material, 2012-16*
                                                                                              • Figure 74: FMB launches, by launch type, 2012-16*
                                                                                              • Figure 75: Prepared spirits-based cocktail launches, by launch type, 2012-16*
                                                                                              • Figure 76: Wine cooler launches, by launch type, 2012-16*
                                                                                              • Figure 77: Leading cocktail mentions on menu, Q3 2016
                                                                                          • Appendix – Consumer

                                                                                              • Figure 78: Mean # flavored alcoholic beverages consumed, 2012-16
                                                                                              • Figure 79: Alcoholic cooler flavors consumed, 2012-16

                                                                                          Companies Covered

                                                                                          • Walmart Stores (USA)

                                                                                          RTD Alcoholic Beverages - US - December 2016

                                                                                          £3,239.54 (Excl.Tax)