Buster’s Liquors & Wines in Memphis made the decision a while back to reduce some of the overwhelming influx of new products by no longer accepting any new wine-based ready-to-drink cocktails or seltzers. “They just aren’t as good as the spirits-based cocktails in a can, and quite frankly just did not sell in our store,” says Buster’s co-owner Josh Hammond.
However, Hammond is enthused about the spirits-based brands driving the RTD sector these days. “[Spirits-based] RTDs are one of the fastest growing categories in the store,” he says, noting that High Noon and Cutwater lead the pack, but Topo Chico and Long Drink are also resonating with his customers. “The attraction is the enormous variety of drinks to be had and in a single serve format,” he adds. New spirits-based RTDs are welcome, he says, although “admittedly, it’s difficult to manage with the inundation of so many new products.”
Jim Shpall, CEO of Colorado’s Applejack Wine & Spirits, faces a similar dilemma. “The category is saturated,” he says, noting that High Noon and Cutwater are also his store’s biggest sellers. “But we are always on the look-out for new brands, new flavors, and line extensions. We want to be on the leading or cutting edge of innovation for the consumer.”
The retailers aren’t overstating the popularity or the abundance of brands in the spirits-based RTD sector. Half of the top-20 brands didn’t exist five years ago, and many have registered double- or even triple-digit gains in recent years as the overall category expands dramatically. Those growth numbers make producers take notice and new brands are plentiful.
Heather Boyd, managing director of U.S. RTDs for Suntory Global Spirits, notes the competition but says the category is in transition. “I believe that the rising tide raises all boats,” she says. “There’s been a huge job being done in the segment to bring ready-to-serve and ready-to-drink options in line with the expectations of consumers today—being transparent with the ingredients and [offering] better-for-you, higher quality experiences that meet the expectations of drinkers today. This category is about immediate gratification. We’ve always had the immediacy—convenience has always been there—but in terms of gratification, the bar is being set at a higher level.”
It’s certainly true that the leading brand rankings have shuffled a bit as new products upended some established brands. The biggest brands in the spirits-based RTD space currently come not from the country’s distilled spirits powerhouses, but from companies with wine and beer as their core businesses. High Noon Sun Sips Seltzer, from Gallo’s Spirit of Gallo spirits division, upset the rankings shortly after its launch in 2019. By 2020 it was the second largest spirits-based RTD, after Jose Cuervo Margaritas, and the growth only escalated in subsequent years. Now, High Noon is by far the largest RTD brand in the U.S. at 21.9 million cases in 2023, a 33.5% increase, according to Impact Databank, making up more than a third of total volume for the segment.
While its growth hasn’t been quite as dramatic, Cutwater, from Anheuser-Busch InBev (A-B InBev)-owned Cutwater Spirits, has also resonated with consumers, pushing into the No. 2 spot in 2023 with volume at 3.04 million cases, a 14.5% gain. Portfoliomate Nütrl, from A-B InBev’s Beyond Beer unit, broke the top five last year with volume reaching 2.03 million cases just two years after its launch in 2021. According to A-B InBev’s group vice president of marketing for the Beyond Beer unit Monica Mody, this has happened through focused work. “For both Cutwater and Nütrl, we’ve remained focused and diligent to deliver consistent growth—going market-by-market and creating world-class marketing plans that drive consideration and ultimately purchase intent,” she says.
Rounding out the top five spirits-based RTDs in the market, Monaco ranked third with volume of 2.97 million cases, a 16.3% gain. The only declining brand in the top ten was fourth-ranked Jose Cuervo Margaritas, which slumped 6.5% to 2.57 million cases.
Craft Creators
Retailers’ openness to new products and expressions, combined with the burgeoning growth of the spirits-based RTD sector, has resulted in an abundance of brands hitting the market in the past half-decade. Line extensions from major spirits brands compete head-to-head with start-up brands, and a handful of independent players have hit big in recent years too, giving confidence to myriad other nascent brands that they too can carve out a slice of this growing RTD pie.
Take Mom Water, for example. Founders Jill and Bryce Morrison had no connection to the beverage alcohol industry. Jill simply enjoyed infusing her drinking water with fruit, and sometimes added a shot of vodka, Bryce Morrison explains. She labeled them “mom water” so their children wouldn’t accidentally grab the wrong drink. Enthusiasm spread among their friend group, and the couple decided to produce on a larger scale. “Within the first three months we sold more than we thought we would sell probably in a lifetime,” Morrison says. A short time later, Morrison and his wife quit their jobs, took on a third partner, and threw themselves into developing the brand.
Mom Water is non-carbonated, fruit-infused water with vodka registering at 4.5% abv. Demand has been strong, Morrison says, prompting the launch of Dad Water, a Tequila-based version with 5.25% abv, to expand the offering. Both carry a suggested retail price of $20 for an 8-pack variety pack of 12-ounce cans. After launching in 2021, Mom Water has grown to 740,000 cases in 2023, according to Impact Databank.
Carbliss has registered even bigger on the RTD radar. The line includes 16 cocktail or flavor options, nine of which are vodka-based, six Tequila-based, and one rum-based. The common thread? All are 5% abv, with zero carbs, zero sugar, zero gluten, and only 100 calories a serving.
Adam Kroener, president and cofounder of Carbliss, says his market research five years ago—interviewing about 300 bar-goers who were drinking malt- or wine-based seltzers— showed people who gravitated toward the light, low-alcohol offerings but weren’t impressed with the flavors. “We have this full flavor, ready-to-drink, bar-crafted cocktail, and we have the appealing nutrition panel that everybody was after with the seltzers,” Kroener says. That appears to be a winning formula. Carbliss nearly quadrupled its volume last year to 1.52 million cases and ranked seventh among spirits-based RTDs.
Tim Nicholls, CEO of The Restless Dreamers Beverage Co., is hoping to catch a bit of celebrity magic in this summer’s launch of Grill Dads RTDs in conjunction with Food Network culinary team Mark Anderson and Ryan Fey, known as The Grill Dads. “We’ve got Tequila Smoke, Whiskey Tea, and Vodka Thyme, two at 8% abv and one at 9% abv,” Nicholls says. “There’s an enormous amount of interest because there’s a reason to launch this brand in this space.” The Grill Dads will market the brand on their own television show and in various other appearances, as well as on social media. “They’ve got a branded RV, they’ll be doing cookouts in car parks,” Nicholls notes of the launch, which will initially focus on California. The Grill Dads will retail for $20 a 4-pack of 12-ounce cans.
Grill Dads and myriad other startup brands are hoping to capture some of the same enthusiasm generated by other previously unknown offerings in the RTD space. The Finnish Long Drink is one prime example. The brand hit a million cases in 2022 and grew again by 80% to reach 1.8 million cases in 2023. Co-founder and CEO Evan Burns says Long Drink resonates because of its taste, but also because of its story. “There’s always a moment of surprise and delight when people try it for the first time,” he says. “And once they learn that the Finnish government created the first long drinks to welcome global visitors to the 1952 Summer Olympics in Helsinki, it becomes not just a drink worth sharing but a story too. That authenticity can’t be replicated, and it’s a big part of why me and our Finnish co-founders wanted to share the drink and story with Americans the right way.”
Regarding the taste, Burns admits the gin base is somewhat unusual. “We focus on the taste, not the base,” he says. “Drinkers are always shocked when they hear it is gin, as it’s a spirit people have strong personal preferences about. Once they try it people fall in love with the taste, which is why our marketing efforts are focused on sampling and education around the long drink category.” The SRP for a 6-pack of 12-ounce cans ranges from $12-$13 depending on the market.
Another independent brand that cracked the top ten is BuzzBallz, created by Merrilee Kick as part of a master’s degree thesis project. Earlier this year, Sazerac acquired the Texas-based brand, which skyrocketed 72% last year to hit 1.43 million cases.
Big Name Presence
With BuzzBallz, Sazerac joins the growing number of beverage alcohol powerhouses who are investing heavily in the spirits-based RTD sector, including Suntory Global Spirits, Pernod Ricard, and Diageo. Suntory Global has hit big with On The Rocks, a brand that straddles the line between ready-to-serve and ready-to-drink cocktails. The range of cocktails is available in both 375-ml. and 750-ml. bottles that are meant to be served over ice, according to Boyd.
In addition to On The Rocks, Suntory is also tapping into the better-for-you segment with its RTDs. Its Delola brand, which is available in the same 375-ml. ($42 a 3-pack) and 750-ml. ($14) sizes as On The Rocks, boasts ingredients such as natural botanicals and has roughly 110 calories, but the abv is higher at 10.5%-11.5%. Newcomer to the U.S. -196—a Japanese RTD pronounced “minus one nine six”— also from Suntory Global, uses proprietary “freeze crush” technology that involves freezing fruit in liquid nitrogen, pulverizing it, and then steeping it in the distilled spirit. “It really captures the essence of the freshness of the fruit in a way that’s really unique and enables us to come out with a full flavor product that has a fraction of the calories and sugars of what you might find in other full flavored RTDs,” Boyd says. Launched in Japan in 2005, the brand—which is available in the more traditional can format ($18 a 12-pack of 12-ounce cans)—is receiving an accelerated global rollout this year ahead of its 20th anniversary.
Other major spirits companies have opted for line extensions of existing brands. The brands provide consumers a new way to enjoy their favorite spirit and also provide a new entryway for new consumers to a brand or category. “What we’re seeing in the spirits-based RTD category is that we are pulling new consumers largely from beer and wine,” says Brown-Forman RTD portfolio director Dallas Cheatham. “While there will undoubtedly be Jack Daniel’s Tennessee whiskey drinkers who will want to take a Jack & Coke RTD with them on the go, our main focus is to introduce the Jack Daniel’s brand to these new consumers.” Brown-Forman introduced the Jack Daniel’s & Coca-Cola RTD last year.
Pernod Ricard USA offers RTD cocktails made with three of its prominent brands: Malibu rum, Absolut vodka, and Jameson Irish whiskey. Natalie Accari, vice president of RTD and convenience for North America, says well-known brands resonate in the RTD space. “Our dedicated RTD Innovation team is committed to continually offering convenient ways for consumers to enjoy their favorite cocktails made with our premium spirits brands, ensuring they have options they can trust,” she says.
Diageo’s Smirnoff has long played in the RTD space with malt-based beverages, but it recently launched Smirnoff Smash Vodka Soda, the brand’s first-ever vodka-based ready-to-drink offering. Laura Merritt, CMO of Diageo Beer Co. and senior vice president of RTDs, says the launch is “a response to the huge demand from consumers for a vodka-based RTD. The brand’s expertise in canned beverages has organically led to this expansion into the spirits-based RTD space.”
Smirnoff Smash plays into the healthful drinks category by being gluten free and just 100 calories a can. The line is available in four flavors: Watermelon Lime, Pineapple Orange, Raspberry Peach, and Strawberry Dragon Fruit. The gluten free offerings are sold in variety packs with the suggested retail price of $18 a 12-pack of 12-ounce cans, or $9 a 6-pack.
Another brand entering the fray this year is Howler Head. In June, the banana-flavored Bourbon is launching Howler Head & Cola in four-packs of cans for a suggested retail price of $12.99. Howler Head chief marketing officer Ed Bello says the target audience is Howler Head drinkers, just at different occasions. “They move around, they are tailgating, going to parties, hosting parties…and for them, convenience and accessibility and portability are important, so we figured let’s make it more accessible to them wherever they want to have it and whenever they want to drink it,” he says.
Flavor Evolution
For some RTD brands, the flavor offering is fairly straightforward. The Finnish Long Drink, for example, isn’t focused on a broad range of flavors; the core range includes Traditional Citrus, Zero Sugar, and Strong (8.5% abv), although Cranberry and Peach are also on offer. “We always remind people that long drinks are not a flavor-focused category like seltzers,” says Burns.
Whiskey brands like Jack Daniel’s, Jameson, and Howler Head have thus far stuck to standard mixes like whiskey and cola or, in Jameson’s case, long drink flavors including Ginger & Lime, Lemonade, and Orange Spritz. Jack Daniel’s is branching out this year with a Jack and Ginger offering and a Jack Daniel’s Country Cocktails Hard Tea. And like Jack Daniel’s & Coca Cola, Absolut has a partnership with well-known consumer brand Ocean Spray. The range is available in four flavors: Vodka Cranberry, Cran-Pineapple, Cran-Grape, and Cran-Raspberry, at 4.5% abv ($18 an 8-pack of 12-ounce cans).
But other RTDs are fully invested in the cocktail experience. Cutwater, for example, offers cocktails like Tiki Rum Hurricane, Lime Margarita, Espresso Martini, and others. “There is so much opportunity when it comes to flavor innovation and variation, but we’re also remaining diligent and true to the DNA of each brand,” says Mody. “We’re not innovating just to innovate.”
On The Rocks dives even deeper, with a range that includes classic cocktails like Aviation, Manhattan, and Old Fashioned. Core cocktails drive the brand, Boyd says, supplemented by unique offerings. “We know that consumers and our drinkers are always looking for variety,” she says. “We’ve found success in introducing limited-time additions during our peak summer months as well as peak holiday months.” A Blue Hawaiian is the limited-time offer this summer.
The On-Premise Hurdle
Even as spirits-based RTD sales soar, the on-premise sales channel has been elusive for most brands. It’s not surprising, given that many bars and restaurants prefer to create their own cocktails on site. Despite that glaring obstacle, some marketers see opportunities.
“As adoption of RTDs increases, we also recognize significant potential in the on-premise as consumer activity resumes, with people traveling, going to movies, and enjoying recreational activities,” says Pernod Ricard’s Accari. “Our brands have deep roots in the on-premise, and we appreciate how RTDs can introduce consumers to our portfolio through core cocktails and serves in retail channels, providing quick and portable service solutions.”
Mom Water is starting to resonate in bars and restaurants, Morrison says, particularly near college campuses. The brand has been embraced by the younger generation, he says, and bar professionals “saw that people drink these, they don’t get crazy, they’re hydrating.” Quick-serve bars or non-traditional venues such as sports stadiums or entertainment venues also do well, he adds.
Burns of The Finnish Long Drink is enthused about the on-premise. He says bars and restaurants are “often overlooked in the category,” but are a major volume driver, accounting for 35% or more of volume in the brand’s more mature markets.
No matter the channel, marketers say they’re bullish about the continuing growth and evolution of the spirits-based RTD sector. “I think the category will continue to innovate, but that pace will slow down a bit,” says Brown-Forman’s Cheatham. “Consumers will demand more premium offerings and new packaging options.”
A-B InBev’s Mody is also taking the consumer pulse. “The category has grown tremendously year over year,” she says. “As we learn more from the growing consumer base, we’ll be able to focus the category and innovation pipeline to deliver what our consumers want.