Spirits-Based RTDs Drive Category Acceleration

Coming off a tremendous growth in 2023, pre-mixed cocktails show strong momentum in the new year.

At the Mendez Fuel convenience store chain in Miami, popular spirits-based RTD brands include Two Chicks, SunnyD, High Noon, Miami Cocktail Co., and Sabé (pictured).
At the Mendez Fuel convenience store chain in Miami, popular spirits-based RTD brands include Two Chicks, SunnyD, High Noon, Miami Cocktail Co., and Sabé (pictured).

Pre-mixed spirits-based cocktails spearheaded overall spirits category growth last year and are off to a fast start in 2024. Led by High Noon, nationwide spirits-based RTD sales increased 26.8% to $2.8 billion in 2023, according to the Distilled Spirits Council. E. & J. Gallo launched the High Noon Snowbird variety pack ($20 an eight-pack of 12-ounce cans), which features the existing Peach and Lemon variants alongside new flavors Raspberry and Plum, and it’s doing well. 

“We got the product at the beginning of January and re-ordered it before the end of the first week,” says Mark O’Callaghan, owner of Exit 9 Wine & Liquor Warehouse in Clifton Park, New York. “People want to try the new flavors. It’s still rolling. We have a couple-hundred-case display. It’s our only RTD display. Everything else gets sold off the shelf.”

Significant trends impacting the RTD segment at the retail tier include year-round growth traction, intensifying market share competition, and brand over-proliferation squeezing shelf space. “Snowbird is a smart attempt to change the mindset that RTDs are only a summer drink,” O’Callaghan says. “Everybody is still coming out with RTDs. We say ‘no’ to over half that come in because the salesmen don’t even have time to present them all.”

At the three-unit convenience store chain Mendez Fuel in Miami, High Noon Snowbird ($24 an eight-pack) is off to a fast start with momentum anticipated to continue. “High Noon, no matter what, will keep going,” says vice president of operations Andrew Mendez. 

Other top selling spirits-based RTD brands at Mendez Fuel are Two Chicks ($16 a four-pack of 12-ounce cans), Miami Cocktails ($16), Cutwater ($11.79), Sabé ($18.49), and SunnyD Vodka Seltzer ($16). “I saw the movement on RTDs, but now I am not expanding so much to different brands,” Mendez says. “I’m focusing on High Noon and brands that keep moving. When I bring in new brands, people are reluctant. People are beginning to stick with products they know.”

Mendez Fuel’s key marketing strategies include social media platforms like Facebook, Twitter, Instagram, and TikTok. “We have built a large following by regularly posting and talking to customers on these apps,” Mendez says. “We schedule social media posts a month ahead to keep them consistent across our accounts. We’re also ready to share new real-time deliveries on Instagram stories the day they arrive.

Jack Daniel’s & Coca-Cola is among the top five best-selling spirits-based RTDs at the Pennsylvania Liquor Control Board’s stores (display pictured).
Jack Daniel’s & Coca-Cola is among the top five best-selling spirits-based RTDs at the Pennsylvania Liquor Control Board’s stores (display pictured).

Spirits-based RTDs face intensifying competition from malt-based hard seltzers, teas, and lemonades with new product launches from recognized brands and the growing popularity of larger cans. “One of my cooler doors is dedicated to 19- and 24-ounce cans,” Mendez says. “I eliminated some regular package beers and added two more shelves for big cans.”

Mendez recently began selling New Belgium Brewing’s Voodoo Ranger Hardcharged Tea Lemon and Peach varieties in 24-ounce cans ($4). “I was shocked. Both of them have an ABV of 7%,” Mendez says. “It has been moving. I have a whole row of hard teas, including Arizona Hard Green, Lemon, and Peach ($4 a 24-ounce can).”

Mendez notes big cans create the best profit margins. “People would rather spend on the big can than six-packs,” he says. “Nineteen-ounce cans are killing the six-pack. Customers will buy two or three different big cans. What good is this six-pack sitting for months compared to getting cash flow and keeping things moving. You adapt or you die.”

In Pennsylvania, Stateside vodka’s Surfside RTDs ($10 a four-pack of 355-ml. cans) show strong trends during warmer months. “Philadelphia-based Stateside Surfside vodka iced tea and lemonade products exploded into our market in 2023,” says Tim Holden, chairman of the Pennsylvania Liquor Control Board (PLCB). “Their standard vodka and iced tea four-pack became the top choice for retail customers in the second- and third-quarters of 2023, outpacing the High Noon variety pack in unit sales for several weeks. That encourages us to expand our selections.”

Meanwhile, High-Noon Snowbird variety eight-pack pack ($20) has so far experienced strong sales. “As of February 7, we sold 14,175 units for almost $300,000,” Holden says. “This is a tremendous success for a historically slow season for spirits sales.” 

The five top-selling spirits-based RTD brands in Pennsylvania are Surfside, High Noon, White Claw Vodka + Soda ($11 a four-pack of 355-ml. cans), On the Rocks ($13 a 375-ml. bottle), and Jack Daniel’s and Coca-Cola ($13 a four-pack of 355-ml. cans). The PLCB is also selling the recently launched Absolut Ocean Spray RTDs ($10.39 a four-pack of 355-ml. cans). “Almost all price tiers reported double- and triple-digit growth year over year,” Holden says. “Only the value category declined. This year we intend to focus on well-known spirit-based items with larger size options.”

Sales of pre-mixed spirits-based cocktails in the 14 control states handling the segment increased 22.4% to 293.86 million on a 19.4% volume gain to approximately 3.39 million cases in 2023, according to the National Alcohol Beverage Control Association (NABCA). “High Noon has just over 50% share of canned cocktail sales in the control states with sales across all demographics,” says David Jackson, COO of trade relations for the NABCA.

Spirits-based RTDs are on their way to another prosperous year. “We expect continued growth in spirits-based, low-calorie hard seltzers as some customers consider them an upgrade over malt-based beverages,” the PLCB’s Holden says. “We believe limited-time and seasonal variety packs will continue appealing to customers.”