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Description

Description

"At a time when consumers report reducing alcohol consumption, and alcohol sales are leveling off, the historically small ready-to-drink (RTD) alcohol space is thriving. RTDs posted the only gains in alcohol consumption from 2018-19, and volume sales of the two largest segments (flavored malt beverages [FMBs] and prepared spirits-based cocktails) are projected to climb ahead. Growth is driven by hard seltzers, which appeal for refreshment and, to some extent, health. Large alcohol brands are playing catch-up after a wait-and-see period, bringing hard seltzers to market. This innovation and marketing power should help sustain the bubble for a few more years."
- Beth Bloom, Associate Director - Food & Drink

This report looks at the following areas:

  • Consumers are drinking less alcohol
  • Desire for customization and sugar reduction challenge RTDs
  • RTDs underperform other alcohol types on quality

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Top takeaways
          • The issues
            • Consumers are drinking less alcohol
              • Figure 1: Alcohol consumption, September 2019
            • Desire for customization and sugar reduction challenge RTDs
              • Figure 2: Consumption barriers, September 2019
            • RTDs underperform other alcohol types on quality
              • Figure 3: Perception of flavored alcoholic beverages verses wine and spirits, January 2017-November 3, 2019
            • The opportunities
              • RTDs have solid retention and still have room for growth, especially among 35-44s
                • Figure 4: Interest in RTD alcoholic beverages: “I have not tried and am interested in trying,” September 2019
              • Preference for drinking at home benefits RTDs; on prem is a growth opp
                • Figure 5: beverage consumption in the past three months, by location, July 2019
              • Hard seltzers appeal similarly to men and women
                • Figure 6: Share of RTD alcoholic beverage consumption – any frequency, by gender, September 2019
            • The Market – What You Need to Know

              • FMB sales continue to climb
                • Prepared spirits-based cocktails post gains, wine coolers could follow
                  • One in five drinkers has reduced alcohol consumption in the past year
                    • RTDs pose the most direct challenge to beer
                      • Preference for drinking at home benefits RTDs; on prem is a growth opp
                      • Market Size and Forecast

                        • FMBs continue to climb
                          • Figure 7: Total US volume sales and forecast of flavored malt beverages, 2014-22
                          • Figure 8: Total US volume sales and forecast of flavored malt beverages, 2014-22
                        • Prepared spirits-based cocktails climb out of slump
                          • Figure 9: Total US volume sales and forecast of spirits-based prepared cocktails, 2014-22
                          • Figure 10: Total US volume sales and forecast of spirits-based prepared cocktails, 2014-22
                        • Wine cooler sales small and shrinking; it doesn’t have to be this way
                          • Figure 11: Total US volume sales and forecast of wine coolers, 2014-22
                          • Figure 12: Total US volume sales and forecast of wine coolers, 2014-22
                        • Growth segments innovate with new products
                          • Figure 13: RTD alcoholic beverages, by launch type, 2017-19*
                      • Market Breakdown

                        • Preference for drinking at home benefits RTDs; on prem is a growth opp
                          • Figure 14: beverage consumption in the past three months, by location, July 2019
                          • Figure 15: RTD alcoholic beverages purchase location, September 2019
                        • Room for on-premise branding exists
                          • Figure 16: Opinions toward hard seltzer - vessel, by hard seltzer consumption, September 2019
                      • Market Perspective

                        • Beer maintains market dominance, spirits sales to overtake wine
                          • Figure 17: Share of US sales of alcoholic beverages, by type of alcoholic beverage, 2014-19 (est)
                        • RTDs post consumption gains while other categories lag
                          • Figure 18: Alcohol consumption, September 2019
                          • Figure 19: Changes in alcohol consumption, September 2019
                        • RTDs pose the most direct challenge to beer
                          • Figure 20: Bon & Viv Spiked Seltzer – “No Lime Needed,” April 2019
                          • Figure 21: Alcohol consumption – any frequency, by RTD alcoholic beverage consumption, September 2019
                          • Figure 22: Changes in alcohol consumption, by age, September 2019
                        • Sparkling wine drinkers are strong targets for RTDs
                          • Figure 23: RTD alcoholic beverage consumption – any frequency, by alcohol consumption – any frequency, September 2019
                        • RTDs outperform other alcohol on flavor, refreshment, and excitement; underperform on natural
                          • Figure 24: Perception of flavored alcoholic beverages verses beer, January 2017-November 3, 2019
                        • Wine losing out on excitement, but outperforming RTDs on quality and value
                          • Figure 25: Perception of flavored alcoholic beverages verses wine, January 2017-November 3, 2019
                          • Figure 26: Perception of flavored alcoholic beverages verses spirits, January 2017-November 3, 2019
                      • Market Factors

                        • One in five drinkers has reduced their consumption in the past year
                          • Figure 27: Change in alcohol consumption, July 2019
                        • Flavor is the leading driver of drink choice
                          • Figure 28: Alcohol statements – choice – Net: any agree, September 2019
                          • Figure 29: Alcohol statements – choice – Net: any agree, by RTD alcoholic beverage consumption (Net*), September 2019
                        • RTD drinkers are more likely than average to look at drink nutrition
                          • Figure 30: Alcohol statements – health – Net: any agree, September 2019
                          • Figure 31: Alcohol statements – health – Net: any agree, by RTD alcoholic beverage consumption (Net*), September 2019
                        • The majority of drinkers are making choices in the moment
                          • Figure 32: Alcohol statements – options – Net: any agree, September 2019
                      • Key Players – What You Need to Know

                        • Hard seltzers drive strong MULO gains for FMBs, led by White Claw
                          • RTDs missing out on low/no sugar claims
                            • Big guys play catch up
                              • From seltzer to spritzer
                              • What’s Working

                                  • Hard seltzers drive strong MULO gains for FMBs, led by White Claw
                                    • Cape Line comes out strong in the premixed cocktail/coolers space
                                      • Small brands see the highest percentage of cocktail/cooler growth during the period
                                        • Tropical flavors continue to lead
                                          • Figure 33: RTD alcoholic beverages, by leading flavors, 2017-19*
                                        • Cans take the top spot
                                          • Figure 34: RTD alcoholic beverages, by pack type, 2017-19*
                                      • What’s Struggling

                                        • RTDs missing out on low/no-sugar claims
                                          • Figure 35: RTD alcoholic beverages, by leading claims, 2017-19*
                                        • Pernod Ricard’s Kahlúa and Malibu lines decline, could retain relevance
                                        • What to Watch

                                          • Big guys play catch up
                                            • Own an occasion to inspire trial
                                              • Get real
                                                • Figure 36: High Noon Sun Sips – “Things Just Got Real at the Tailgate,” August 2019
                                              • From seltzer to spritzer
                                              • The Consumer – What You Need to Know

                                                • Hard seltzers are driving the increase in RTD consumption
                                                  • Hard seltzers appeal similarly to men and women
                                                    • RTDs have solid retention and still have room for growth
                                                      • Flavor is a strength of hard seltzer, health is a struggle
                                                        • Desire for customization and sugar reduction challenge RTDs
                                                        • RTD Alcoholic Beverage Consumption

                                                          • Hard seltzers are driving the increase in RTD consumption
                                                            • Figure 37: RTD alcoholic beverage consumption – any frequency, September 2019
                                                          • Hard seltzers appeal similarly to men and women
                                                            • Figure 38: Share of RTD alcoholic beverage consumption – any frequency, by gender, September 2019
                                                          • 4 in 10 hard seltzer drinkers are age 25-34
                                                            • Figure 39: Share of RTD alcoholic beverage consumption – any frequency, by age, September 2019
                                                          • Hard seltzers need to diversify their audience
                                                            • Figure 40: Share of RTD alcoholic beverage consumption – any frequency, by race, September 2019
                                                          • Hard seltzers households skew slightly higher earning
                                                            • Figure 41: Share of RTD alcoholic beverage consumption – any frequency, by HH income, September 2019
                                                        • Interest in RTD Alcoholic Beverages

                                                          • RTDs have solid retention and still have room for growth
                                                            • Figure 42: Interest in flavored malt beverages, September 2019
                                                          • Premixed spirits-based cocktails show the strongest interest in trial
                                                            • Figure 43: Interest in premixed spirits-based cocktails, September 2019
                                                          • Hard seltzers have the highest retention, struggle the most with trial
                                                            • Figure 44: Interest in hard seltzers, September 2019
                                                          • RTD marketers could widen their lens to include slightly older consumers
                                                            • Figure 45: Interest in flavored malt beverages, by age, September 2019
                                                            • Figure 46: Interest in premixed spirits-based cocktails, by age, September 2019
                                                            • Figure 47: Interest in hard seltzers, by age, September 2019
                                                        • Opinions Toward Hard Seltzer

                                                          • Flavor is a strength of hard seltzer, health is a struggle
                                                            • Figure 48: Opinions toward hard seltzer, September 2019
                                                            • Figure 49: Opinions toward hard seltzer, by hard seltzer consumption, September 2019
                                                          • A third of women think hard seltzer is more refreshing than beer
                                                            • Figure 50: Opinions toward hard seltzer, by gender, September 2019
                                                          • 25-34s have high opinions of hard seltzers
                                                            • Figure 51: Opinions toward hard seltzer, by age, September 2019
                                                        • Consumption Barriers

                                                          • Desire for customization and sugar reduction challenge RTDs
                                                            • Figure 52: Consumption barriers, September 2019
                                                          • The youngest abstainers don’t feel like the drinks represent them
                                                            • Figure 53: Consumption barriers, by age, September 2019
                                                        • Appendix – Data Sources and Abbreviations

                                                          • Data sources
                                                            • Sales data
                                                              • Consumer survey data
                                                                • Abbreviations and terms
                                                                  • Abbreviations
                                                                  • Appendix – Key Players

                                                                      • Figure 54: Multi-outlet sales of domestic beer/ale, by leading companies and brands, rolling 52 weeks 2018 and 2019
                                                                      • Figure 55: Multi-outlet sales of premixed cocktails/coolers, by leading companies and brands, rolling 52 weeks 2018 and 2019

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