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NEW CATEGORY IS SKYROCKETING factors such as lower excise taxes and wider
The ready-to-drink (RTD) alcohol category, points of channel distribution across the US.
which includes hard seltzers, flavoured alcohol However, 2021 will see the rise of spirit based
beverages, and pre-mixed cocktails, is RTDs as the next iteration of premium RTD of-
under rapid transformation across lea- ferings.
ding markets, with volume growth out- Brand owners will look to extend
-pacing that of other beverage alcohol the reach of their products to attract
categories globally. consumers interested in flavour and
The RTD category is the fastest convenient cocktail options. IWSR
growing beverage alcohol category data shows that nearly 50% of con-
in the US market, and its trajectory is sumers in the US place importance
looking strong for the years to come. on alcohol base when selecting an
By the end of 2020, IWSR expects the RTD. Innovation in premium ingre-
category to double its 2019 volume, dients, alcohol base and new interes-
driven largely by the buoyant hard ting flavours will drive the RTD mar-
seltzer segment. This growth will ket in the US.
make volume consumption of the Brands are rapidly pivoting to meet
RTD category in the US larger than this consumer need. IWSR data shows
that of the entire spirits category. that vodka is by far the most com-
While there are distinct differen- mon spirit base with Tequila/mezcal,
ces across all countries, it’s clear that whiskey, gin, and rum following be-
hard seltzers or seltzer-like products are hind. Wine remains the least explo-
growing in popularity as consumers look for red alcohol base among RTDs, though, when
sessionable, lower-ABV options. The portabi- it occurs, such innovation predominantly
lity and single-serve nature of RTDs has pro- comes in the form of spritzes, mimosas, belli-
ven a key factor of growth, especially during nis, and sangrias.
Covid-19. Convenience is a key tenet of go- “Winners will differentiate their proposition
-to-market & channel distribution strategies, to consumers in order to stand out among the
especially in countries such as Japan, the US, masses,” says Brandy Rand. “Premiumisation
Mexico, and Brazil. through alcohol base, unique flavours, functio-
RTD brands that are seeking cross-border nal benefits and purpose marketing strategies
development will need to pay close attenti- are among the angles that could yield greater
on to taxation rules for varying alcohol bases, consumer appeal and demand.”
which differ between countries.
Due to the prevalence of malt and fermen- POLITICAL IMPACT TO THE BEVERAGE
ted sugar bases, most newly launched RTDs in ALCOHOL MARKET
the US fall into the 4.1% to 5.0% ABV range and Changes in leadership, diplomatic relation-
as such align with the ‘better for you’ ethos. ships and legislation come into focus.
However, with the rise in spirit and wine ba- t /FX MFBEFSTIJQ JO UIF 64 CSJOHT GPSNFS QP-
sed RTDs, the US market has seen an increase licies of protectionism into focus, and is raising
in products that exceed 10.1% ABV. These ex- key questions, such as whether the new admi-
pressions tend to be versions of full-strength nistration will review beverage alcohol import
cocktails. Conversely, there is also an equal rise duties, or how tariffs imposed by the US may
in lower (less than 4.0% ABV) products. differ between the UK and the EU.
Malt-based RTDs have been the preferred t $IBOHFT JO HMPCBM SFMBUJPOTIJQT XJUI $IJOB
choice of many RTD producers, driven by and shifts in trade policies, such as those on
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