RTD Alcohol: How It’s Changed The Beverage Industry

The alcoholic beverage industry has experienced a massive shift in recent years. Although canned beer has been around since the early- to mid-20th century,¹ other alcoholic beverages didn’t follow suit until much more recently. Now, new canned product offerings have emerged, taking the alcohol sector by storm. 

We’re talking about ready-to-drink (RTD) alcoholic beverages. 

But what is RTD alcohol? And what factors have contributed to its meteoric rise to success and increased consumer demand? 

Let’s crack a can and dive in. 

What Is RTD Alcohol? 

As the name suggests, ready-to-drink alcoholic beverages are premixed drinks that are ready to be consumed immediately and typically have a lower alcoholic content compared to traditional liquors and spirits, and even some beers.

With RTD cocktails, there’s no mixing necessary. Consumers simply pop them open and enjoy. As such, these on-the-go alternatives to traditional spirits have become incredibly popular, as evidenced by the industry’s rapid growth. 

Currently, the global RTD market size is valued at $32.94 billion. Experts predict that it will reach $85.5 billion by 2030, recording a compound annual growth rate (CAGR) of 11.2%.² While that encompasses the total market, it’s helpful to break it down into categories for a better understanding of the RTD industry.

Hard Seltzers

The crowning jewel of the United States RTD market, hard seltzers have rapidly become America’s favorite light alternative to beer. The majority of seltzers—though not all—are made using a malt-based blend of carbonated water and alcohol.

The Rise of Whiteclaws

In 2016, White Claws and Trulys were introduced to the world. But it wasn’t until 2018 that they seemingly exploded onto the scene, immediately cutting into craft beers’ market share. 

This overnight sensation was propelled, in part, by people posting about White Claw on social media. The #clawlife went viral. According to Business Insider:³ 

“Sales of seltzer skyrocketed, and White Claw sales alone quadrupled, from $154.8 million in 2018 to $627.2 million in 2019. The seltzer craze had officially swept the nation, luring everyone from fraternity bros to the gluten-free.”    

In the span of a year, consumer behavior shifted on a dime. This caught the eye of both major beverage brands and smaller players, demonstrating that the market was primed for disruption and that consumers were clamoring for something different. 

The COVID pandemic only added fuel to the fire, causing RTD beverage sales to increase by 43%. From March of 2020 to May of 2021, the alcoholic seltzers industry saw $4.5 billion in sales,⁴ with Whiteclaw and Truly accounting for approximately 75% of the total market share.  

Analysts believe this was the market peak for RTD seltzers, seeing as sales dropped in 2021 and many vendors plan to shift focus to other types of RTDs. But even if the craze of 2019 to 2021 can’t be matched again, seltzers will likely remain a mainstream staple going forward.  

Cocktails 

With oversaturation in the hard seltzer category and only a few clear-cut winners, many brands have begun to instead divert production to ready-to-drink cocktails. This can include a range of spirits and mixed beverages, including traditional cocktail recipes and new blends. Drizly—the wildly popular drink delivery app—reports that it’s best selling RTD sub-categories are:

• Whiskey Old Fashions
• Margaritas 
• Mai Tais
• Gin and Tonics
• Vodka Sodas/Vodka-based seltzers

The ready–to–drink cocktails market existed previously, but largely consisted of cheap “cocktails” characterized by artificial ingredients, additives, and color. To stand out, brands quickly realized they needed to move towards a premium drink model. As a result, the market quickly evolved into something better than its previous offering. 

According to IWSR’s Drinks Market Analysis, the RTD cocktail market benefited from craft brands focusing on producing high-quality beverages:⁶ 

“Craft distilleries are launching spirit-based RTDs made with their own signature gin or vodka, often with the addition of localized ingredients or botanicals, creating more herbaceous and complex pre-mixed options. These releases tap into a wider trend of twists on classic serves with unusual or exotic ingredients.”

Today, there are various cocktail options that use natural flavors, premium spirits, and come in both full-strength and lower-ABV options. Jack Daniels, Smirnoff, Bacardi, and other global brands have unveiled their own lines of RTD drinks. Because of such factors, analysts project that it will soon be a billion–dollar industry, growing by $584.19 million over the next four years at an impressive 12.10% CAGR.⁷ 

Canned Wine 

The final major player within the RTD industry is canned wine. This is a sub-category that’s unique in that the wine industry has historically been more resistant to change than beer or liquor. 

Naturally, there are century-old conventions and traditions associated with the practice of wine-making and consumption. And changing that takes time. But the emergence of RTD canned wine has helped redefine what wine drinking can feel and look like. It has added an element of playfulness and accessibility that was previously missing. And as winemakers have begun to perfect the craft, the consumer response has been resoundingly positive. 

Like other RTDs, this market has boomed, growing from a $10 million sector in 2014 to a current market value of $220 million just eight years later. Analysts predict that it will be a half a billion–dollar industry by 2028.⁸

Advantages of RTD Alcohol 

It’s clear from the numbers that consumers and brands alike love RTDs. But why is that? There are a few factors that stand out:

• Convenience – On the surface, this is one of the most obvious benefits of RTDs—they make drinking easy. Whether it’s a canned cocktail or wine, there’s no need for additional accessories or complicated mixing processes. The moment a consumer wants to drink, all that they need to do is crack the can.
• Portability – Similarly, RTD alcoholic beverages are much easier to pack or carry, especially compared to a wine bottle or a handle of liquor. They stack easily in a fridge or cooler, making them an easy beverage choice for practically any occasion.
• Price point – While there are high-end options in every RTD category, most drinks are priced at a competitive point that is often lower than their bottled counterparts. 
• Sustainability – Aluminum cans, and especially recycled aluminum, are often considered better for the environment than glass bottles.⁹ This appeals to eco-conscious consumers who prefer brands that practice green living. Aluminum cans are 100% recyclable, can be used and reused countless times, and are lighter and more conveniently stackable than glass, therefore easier to ship. Cans enable brands to reduce their carbon footprint and save money on transport and storage costs.
• Branding – For brands, cans tend to be far more marketable than other bottling options. Wraparound labels provide more space for distinct, eye-catching visuals without excess associated costs. The opportunity for cohesive branding and aesthetic labels is important from a marketing standpoint, and improves the chances of going viral on a platform like Instagram or TikTok.

What’s Fueling RTD Growth? 

Since 2018, the popularity of RTDs has grown at a faster rate than any other major drinks category, including spirits, wine, and beer.¹⁰ 

The steady growth of the RTD industry clearly signals a major shift in consumer interest across all demographics. But what are the primary factors fueling the RTD boom? 

• Americans – The RTD craze is especially prominent in the U.S., as they’ve grown increasingly popular year over year. As it stands, the U.S. accounts for 44% of global RTD sales and the vast majority of the seltzer sub-category.¹¹ 
• Nine other core markets – Aside from the U.S., nine other markets account for 85% of the RTD global market: Australia, Brazil, Canada, China, Japan, Mexico, Spain, South Africa, and the U.K. Unlike America, these countries’ consumers are more interested in spirit-based products rather than seltzers.⁸
• A younger demographic – The largest buyer of RTD drinks are Millenials, followed by Gen Z.⁵ This age group is more adventurous when it comes to sampling new types of alcoholic drinks. Not to mention, they consume more alcohol than other categories. Millennials may be more likely to purchase premium RTD cocktails, Gen Z is instantly priced out of many high-quality liquors and wines. As such, they prefer cheaper, more convenient, more photographable alcoholic alternatives.  
• Direct to consumer – The COVID pandemic energized a trend already occurring within the RTD alcoholic beverage market—direct–to–consumer sales. With people stuck at home, brands leaned into their eCommerce engine. Online sales of alcohol hit $6 billion, more than doubling sales over the previous two years.¹² Going forward, eCommerce is expected to be the primary driver of industry growth over the next decade. 

Wildpack—Your RTD Packing Partner

The future is bright for the RTD alcoholic beverages market. Brands that wish to capitalize on the craze should do so now or risk being left behind. 

Are you looking for a canning partner? Do you need help with label design, packing, beverage carriers, and more? 

You’re in the right place. Wildpack is a full-service co-packer capable of handling all of your sleeving, canning, and packing requirements. 

Contact us today to learn more about our state-of-the-art facilities and processes to help your RTD beverages claim their share of the market.

 

Sources: 

1. Smithsonian Magazine. The First Canned Beer Went on Sale 78 Years Ago Today. https://www.smithsonianmag.com/smart-news/the-first-canned-beer-went-on-sale-78-years-ago-today-5911003/
2. PR Newswire. Global Ready-to-Drinks (RTDs) Alcohol Market worth $85.5 billion by 2030. https://www.prnewswire.com/news-releases/global-ready-to-drinks-rtds-alcohol-market-worth-85-5-billion-by-2030—exclusive-report-by-insightace-analytic-301463792.html
3. Business Insider. Brands like White Claw and Truly changed the way Americans drink. https://www.businessinsider.com/hard-seltzer-craze-timeline-white-claw-truly-bud-light-seltzer-2021-10
4. Business Insider. Hard-seltzer sales are surging. Here are the 3 most popular brands and 2 newcomers hoping to chip away at their dominance. https://www.businessinsider.com/white-claw-truly-bud-light-most-popular-hard-seltzers-and-newer-brands-2021-6
5. Bev Alc Insights. 2022 RTD Cocktail Forecast. https://bevalcinsights.com/bevalc-insights-2022-rtd-cocktail-forecast/.
6. IWSR. How Is the RTD Market Evolving. https://www.theiwsr.com/news-and-comment-radius-trend-rtd-evolution/
7. PR Newswire. Global Ready to Drink (RTD) Cocktails Market Outlook, 2025 – Growing Demand for Low-Alcoholic Flavored Drinks. https://www.prnewswire.com/news-releases/global-ready-to-drink-rtd-cocktails-market-outlook-2025—growing-demand-for-low-alcoholic-flavored-drinks-301465654.html
8. Grand View Research. Canned Wines Market Size, Share & Trends Analysis Report By Product.  https://www.grandviewresearch.com/industry-analysis/canned-wines-market.
9. The Conversation. Ranked: the environmental impact of five different soft drink containers. https://theconversation.com/ranked-the-environmental-impact-of-five-different-soft-drink-containers-149642 
10. Beverage Daily. RTD alcohol volume share set to double over next five years. https://www.beveragedaily.com/Article/2021/10/19/RTD-alcohol-volume-share-set-to-double-over-next-five-years 
11. Drinks International. The continued rise of RTDs.  https://drinksint.com/news/fullstory.php/aid/9756/The_continued_rise_of_RTDs.html.
12. Cision PR Newswire. Rabobank: Alcohol E-Commerce Sales Surpass $6 Billion in 2021, Will Continue to Grow.https://www.prnewswire.com/news-releases/rabobank-alcohol-e-commerce-sales-surpass-6-billion-in-2021-will-continue-to-grow-301457700.html