Ready-to-drink (RTD) cocktails and hard seltzers may not carry the same novelty that initially drove the success of the category, but they continue to see varied growth and should continue to do so in 2023.
IRI data shows spirits-based seltzers jumped astronomically in dollar sales over the last year at c-stores by 121.6% to $100 million. Although beer-based seltzers and flavored malt beverages (FMBs) continue to remain the top sellers in the category, neither saw growth as significant as spirits-based seltzers.
Mintel research pointed to similar trends in the category.
“RTD success continues as both FMBs and spirits-based cocktails saw another year of double-digit growth,” said Sydney Olson, senior food and drink analyst, Mintel, in her recent summary of Mintel’s RTD alcoholic beverage report.
In the future, she expects only a slight decrease in growth, as consumers are moving toward light, flavorful and fun alcoholic beverages.
“Continuous innovation in flavor and style has enabled the flavored malt beverage segment to sustain steady growth, while spirits-based RTDs are once again shaking up the alcohol landscape and offering an affordable alternative for the cocktail experience,” she continued.
Wine-based cocktails, she noted, remain a category pain point. Olson said success for this subcategory in 2023 means looking into options with fruit flavors, sparkling wine and better-for-you concepts.
Wine-centric seltzers have dramatically dropped in dollar sales over the last year by 45.3%, per IRI.
Six in 10 U.S. adults purchase RTDs, Olson noted, with men now becoming more engaged with the category, as well as parents and multi-cultural consumers.
In spite of the growth, however, the category is becoming crowded, and “fading novelty and inflationary pressures (are) intensifying competition,” said Olson, so brands should look to differentiation in 2023.
Despite the popularity of RTD cocktails and hard seltzers, many convenience stores are shut out from offering their customers the beverages.
“I have a great deal of passion around (the category), as currently in the main states we operate in we are not legally allowed to sell the RTD spirits-based cocktails. This puts us at a serious disadvantage since liquor stores are allowed to sell them and this is a continuous new growth category,” said Damian Wyatt, director of sales and category management, MAPCO. “It continues to be a mystery to us in the c-store channel why we are allowed to sell malt-based beer products at double the ABV (alcohol by volume) level of these RTDs but not allowed to sell the RTDs.”
MAPCO operates 300-plus sites in Tennessee, Alabama, Georgia, Arkansas, Kentucky and Mississippi.
Despite his inability to sell the products, Wyatt believes growth will continue to accelerate the category through all of 2023.