The RTD Revolution: From Niche to Mainstream

Ready-To-Drink (RTD) beverages have transitioned from being mere options in the spirits and beverage industry to front-runners. Their ascent is driven by global market trends, consumer preferences, and shifts that have elevated RTDs to premium beverages.

Market Growth Insights
Technavio highlights that RTD cocktails are set to experience an 11.43% year-on-year growth in 2023. Moreover, from 2022-2027, the category is expected to achieve a 12.42% CAGR, adding a significant US$748.7 million in value. Historically, in 2017, the RTD market was valued at US$583.82 million, with North America leading the share at US$209.77 million.

RTD Market Dynamics
Key growth drivers identified by Technavio include:

1) Increasing Demand for Low-Alcoholic Flavored Drinks: Consumers are opting for beverages with reduced alcohol content without sacrificing flavor.
2) Health Awareness: The shift towards well-being and health has consumers preferring healthier drink alternatives.
3) Preference for Convenience: The fast-paced modern lifestyle fuels the demand for RTD products.

However, challenges include diverse taxations for RTD cocktails, rising anti-alcohol campaigns on digital platforms, and the availability of alternative products.

Consumer Shifts
RTDs witnessed a 40% global consumption growth in 2020, and it’s predicted to further grow by 22% by 2024. American consumers have been central to this trend. Modern RTDs align with the premiumization trend, focusing on high-quality, natural ingredients. Especially during the Covid-19 pandemic, with closures of many establishments, canned beverages emerged as the popular choice, especially among younger demographics.

The Appeal of Packaging
Canned beverages, emphasizing convenience, are resonating with a vast audience. Not only are RTDs thriving, but beverages like iced coffees and teas are also joining the trend. These drinks are now staples in regions like the US and Japan. Additionally, with a saturated hard seltzer market, producers are exploring opportunities within the RTD beverage category.