RTD or ‘Ready-to-Drink’ beverages have earned the title ‘game changer’ in the drinks industry. The product’s convenience has made it a staple for every overnighter bag and the perfect companion for party-goers with a long commute ahead. As a relatively new concept to a lot of people, it has been on the receiving end of a lot of media attention, making it difficult to translate all of the scrambled messages surrounding RTDs.
So, where do we start?
The very first question that crosses a lot of minds is: ‘what makes RTDs different from a drink you can mix yourself or have made for you?’. To that question, there are 2 answers! Convenience and consistency. Convenience is a trend in the drinks industry that isn’t going anywhere, anytime soon. Their hassle-free nature makes it an attractive and cheaper alternative to going out to a bar and ordering a drink from a mixologist. And their consistent nature takes the fear out of trusting yourself or someone else to make the drink you like – perfectly.
Now, it’s important to note that RTDs are not a completely new concept. In fact, they’ve been around for decades. The household name, Campari, were the first to introduce the world to pre-batched, carbonated cocktails with their 1932 ‘CampariSoda’. The product’s iconic bottle remains almost identical to this day.
From a business standpoint, they are a great addition to any drinks range you might offer. The ISWR states that the category has grown exponentially in the last few years and by volume, the category stands at about ⅓ of both the global spirits category and the global wine category. As they are produced in bulk, they are incredibly cost-effective for businesses looking to break into the mixed drinks sector. Accompanied by a long shelf-life, and subsequently, the reduced risk of waste, these further contribute to their appeal to businesses.
The American market has been at the forefront of RTDs success for years and this doesn’t appear to be changing anytime in the near future. The concept of ‘convenience food and shops’ was born in the United States, so it only makes sense that convenience drinks dominate the market there too. The hectic lifestyle that many Americans have, means that many consumers are looking for products that are quick and easy to consume.
Japan is another market at the epicenter of RTDs success. RTD drinks are synonymous with innovation and creativity, two things that Japan is also known for. The Japanese market takes the crown for the most ‘out there’ RTD drinks, with varieties ranging from sweet to sour and everything in between. Additionally, RTD drinks can offer benefits to the health-conscious demographics in these markets, such as reduced sugar or calories and added vitamins, that ‘crafted from scratch’ drinks can’t.
While the Irish market is nowhere near the size of its Japanese and American counterparts, this doesn’t mean that there isn’t great growth potential in Irish markets. RTDs took Ireland by storm during the Covid-19 pandemic with volumes of sales up by 14% in 2021 and 26% in 2020. However, although the demand is there, Irish brands to supply this demand are not. Drinks Ireland reports that the majority of Irish sales for RTDs were from imported goods rather than Irish brands.
Ultimately, RTDs are consumer centric, not product centric which is the biggest contributing factor to their success. Increased competition in the drinks industry has made it incredibly difficult to stand out. RTDs have flipped the switch completely and rather than going to customers and pushing the product onto them, they let customers come to them. The specific taste profiles, alcohol content and packaging all contribute to appealing various demographics towards their products.
Although there has been exponential growth in this market, we’re still a long way away from market saturation, especially in immature markets like Ireland and other EU countries.