Produced with spirits, wines, ciders, and a multitude of other ingredients, a new wave of high-quality ready-to-drink cocktails (RTDs) is entering the beverage alcohol segment and propelling growth. “The ease and convenience of RTD products make them a natural fit for social gatherings and allows consumers—especially millennials—to put the focus on their friends, family, and memories in the making,” says Tim Holden, chairman of the Pennsylvania Liquor Control Board (PLCB).
While many RTD offerings are packaged in sleek 355-ml. aluminum cans, some can be found in packages as small as 50-ml. cans and as large as 1.75-liter bottles. As the category gains ground in the off-premise, thanks in part to its modern packaging options, some wine and spirits retailers are now dedicating cooler sections with special racking, counter space by registers, and shelving to RTDs. “Customers are looking for convenience, portability, portion control,” says Paige Flori, owner of Boutique Wines, Spirits & Cider in Fishkill, New York. “And they also often want a cocktail after a hard day at work, without having to craft it themselves.”
Spirits-based pre-mixed cocktails—not including wine, cider, or other bases—grew 7.5% to $351 million in the U.S. last year, according to the Distilled Spirits Council of the United States. The growth rate was stronger in Pennsylvania, where sales jumped 19.5% to approximately $19.2 million last year. Boutique Wine & Spirits alone saw RTD sales double from 2018 to 2019.
Retailers are expanding RTD offerings as more products enter the market and piqué consumer interest. The PLCB increased the number of RTD SKUs it carries this year by 53, to a total of 118. Boutique Wine, Spirits & Cider carries 32 RTD SKUs, up from 19 last year, and the majority of these offerings are 375-ml. or smaller.
The hard seltzer phenomenon is helping fuel the RTD segment as spirits producers have taken note of consumers experimenting and expanding their palates. “A few malt-beverage-based seltzers have exploded on the beverage scene, and liquor companies have reacted quickly with spirits-based seltzers,” Holden says. “Almost all of our growth in the RTD category is coming from these products.”
At Boutique, the bestselling RTD is the 8% abv Cocktail Club Vodka Soda ($5 a 355-ml. can) from Albany Distilling Co. in Albany, New York. “Customers like it because it’s a more sophisticated version of malt-based hard seltzers,” Flori says. “They choose Cocktail Club because it’s local, tastes good, is made with ingredients they understand, has no sugar, carbs, or gluten, and comes in very portable 355-ml. cans.” The store carries the brand’s Cucumber Melon, Black Cherry, and Raspberry Lime versions.
The other top RTD sellers at Boutique include Cafe Agave ($5 a 187-ml. can), an agave wine-based coffee cocktail, and King’s Highway Singapore Sling ($5 a 355-ml. can), a cider-based cocktail made locally in Dutchess County. “Customers want their RTD to taste as though it were just made, which is a difficult flavor to capture and keep,” Flori says. “Manufactures that can provide that freshness will do well.”
At Delaware’s Kreston Wine & Spirits, RTD products range in price from $2.49 for a 12-ounce can of Canteen to $25 for a 750-ml of Market Spirits‘ Negroni Cocktail. Top performers are the 1800 Tequila Ultimate Margarita ($19 a 1.75-ml.) and the Jose Cuervo Authentic Margaritas ($17 a 1.75-ml). “We have over 300 different RTDs,” says owner Bob Kreston. “The biggest change has been additional flavors of the brands we have carried in addition to the multiple 4-pack cans introduced over the past two years.”
The PLCB’s three top selling RTDs are, respectively, Montebello Long Island Iced Tea Prepared Cocktail 42 Proof ($13 a 1.75-liter), Twisted Shotz Party Pack 40 Proof ($17 a 15-pack of 25-ml. containers), and Jose Cuervo Lime Margarita Prepared Cocktail 20 Proof ($17 a 1.75-liter). “RTD shots are relatively new to Pennsylvania, having been introduced in early- to mid-2018,” Holden says. “Since then, they’ve become some of Fine Wine & Good Spirits’ top-selling items in any category.”
Fine Wine & Good Spirits stores are now embracing premium RTD offerings made by Pennsylvania distillers. “Notable call outs for these products are the Boyd and Blair Iced Tea and Lemonade ($25 a 1-liter), Boyd and Blair Lemon and Lavender Cocktail ($25), Tall Pines Moonshine Ma’rita ($22), and U-Freeze Subzero Sangria and Glacial Grape wine slushes ($11 a 750-ml.), all of which are available in select markets within Pennsylvania,” Holden says. “We’re already looking to expand the selection of these local products and the number of stores where they’re sold.”
Holden anticipates the popularity of RTDs to continue. “We’re seeing recent innovation in new flavors of Margarita RTDs, all of which have taken off quite well,” he says. “Spirit-based seltzer items show no signs of slowing down, and there will undoubtedly be new flavor releases and trial pack options to come soon.”