RTDs, Tequila, And Sauvignon Blanc Gain Ground At Retail This Summer

Retailers see growth amid brand proliferation, rising prices, and shrinking basket sizes.

Tequila remains strong at the Virginia ABC’s retail outlets (Nansemond Street location in Richmond pictured), where 19 new brands have hit the shelves this summer.
Tequila remains strong at the Virginia ABC’s retail outlets (Nansemond Street location in Richmond pictured), where 19 new brands have hit the shelves this summer.

So far this summer, off-premise winners include spirits-based RTDs, Tequila, and Sauvignon Blanc. In Minnesota, the 12-unit Haskell’s retail chain is experiencing strong overall sales with Tequila and Sauvignon Blanc leading growth. “We had a great week leading up to Fourth of July and a great week afterwards,” says Haskell’s president Ted Farrell. “Sales year-over-year were up.” RTD sales are stronger at the company’s downtown Minneapolis unit than at its suburban locations. “In our residential stores, people try them, but turnaround sales are not always there,” Farrell notes. “People are buying them for camping or because they are going out on a boat.”

Tequila has also experienced a steady stream of new brands over recent years. There are now at least a dozen Tequila brands launched by celebrities, including Dwayne Johnson’s Teremana ($32 a 750-ml. for the Blanco at Haskell’s), Michael Jordan’s Cincoro ($70 for the Blanco); and George Clooney’s Casamigos ($47 a 750-ml. for the Blanco), launched in 2013 and sold to Diageo for $700 million in 2017. “Tequilas are still driving sales,” Farrell says. “The hard part is everybody and their mother is coming out with a new Tequila. The market is getting saturated with the brands, and there are only about seven or eight that really sell well. Everyone knows Casamigos Cristalino ($52 a 750-ml.), Don Julio Blanco ($50 a 750-ml.), and Herradura ($42). The woes of a retailer is finding the right amount of brands to carry.”

While Chardonnay is on a solid comeback, Haskell’s customers gravitate toward Sauvignon Blanc in the summertime. “Whether it’s a white Bordeaux with a little Sémillon blended or a nice herbaceous Kiwi offering, consumers are enjoying Sauvignon Blanc,” Farrell says. Popular Sauvignon Blancs at Haskell’s include La Forge Estate ($15), Fog Mountain ($14), Vina Robles ($14 a 750ml.), and Silver Beach from New Zealand ($14). 

Rosé sales, however, are down as competition intensifies. “Consumers are still enjoying good rosés from Provence and other high-quality areas,” Farrell says. “It’s a shrinking category because two years ago everybody decided to make a rosé. People tried those and didn’t find them as approachable as the rosé from the guys who have been making them for hundreds of years.” Big sellers at Haskell’s include Mado en Provence ($18 a 750-ml.) and Fog Mountain rosé ($14 a 750-ml.).

Sauvignon Blanc sales have increased 5% at Gary’s Wine & Marketplace stores in New Jersey and Napa, California (Wayne, New Jersey display pictured)
Sauvignon Blanc sales have increased 5% at Gary’s Wine & Marketplace stores in New Jersey and Napa, California (Wayne, New Jersey display pictured)

Similar trends have taken hold at the four Gary’s Wine & Marketplace stores in New Jersey and Napa, California, where rosé sales are down 10% while Sauvignon Blanc sales are up 5%. “Overall sales in the three weeks leading up to the Fourth of July were just above flat relative to 2022,” says Mike Fisch, director of innovation at Gary’s. “We are seeing a lower basket size for online sales and a comparable basket size for in-store sales when comparing 2023 to 2022.” Leading Sauvignon Blancs come from labels like Fog Mountain ($13 a 750-ml.), Fisch ($23), Duckhorn North Coast ($24), and Cakebread ($33). 

It remains to be seen if consumer demand can absorb the tidal wave of new RTD and Tequila brands at Gary’s. “RTDs sales are up 10% year-over-year, and the number of category SKUs is up 25%,” Fisch says. “Despite the growing nature of this category, we still find there is more supply of RTD options than demand from customers.” Top-selling RTDs include Surfside Variety Pack  ($21 an eight-pack of 12-ounce cans), Sunny D Vodka Seltzer ($12 a four-pack of 12-ounce cans), and Fishers Island Lemonade ($17 a four-pack of 12-ounce cans). 

Meanwhile, Tequila and Bourbon sales are flat at Gary’s, but Tequila continues gaining overall spirits share. Top growing brands include Lalo Blanco Tequila ($44 a 750-ml.), Casamigos Blanco ($105 a 1.75-liter), Clase Azul Plata ($157 a 750-ml.), and Vizón Blanco ($26 a 750-ml.). “Bourbon is still the largest category in spirits, but Tequila is catching up, followed by vodka,” Fisch says. Cordials are the second fastest-growing spirits category at Gary’s behind RTDs, with leading brands Aperol ($25 a 750-ml.), Campari  ($32), and Cointreau ($37 a 750-ml.). 

Looking to educate customers and increase foot traffic, Gary’s stores are focused on curating in-store events, classes, tastings, and digital ads on Google, Bing, and Facebook. “We’re finding that the return on ad spend has increased significantly, as many retailers and third-party marketplaces have cut down ad spend, lowering the cost of digital ads and increasing the effectiveness,” Fisch notes.

In Virginia, 74 new products have been launched this quarter, including 19 Tequilas and 13 spirits-based RTDs. The Virginia ABC’s marketing plans feature a seasonal campaign with the tag-line “Pour Your Next Summer Adventure,” which encourages customers via advertising on television, radio, and digital platforms to try new things. 

“We will continue to focus on premiumization and seasonally appropriate products, recipes, and occasions such as tailgating, but always with a reminder to sip responsibly,” says John L. Shiffer, director of marketing and merchandising at the Virginia ABC. “We continue to keep a close eye on the impact that inflation may have on our customers’ purchasing activities.”