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Do RTD consumers in the US know what they are drinking?
The base of ready-to-drink (RTD) products is often misunderstood by US consumers, according to data from analyst IWSR, but educating them on what they are drinking poses “both benefits and risks”.
No matter their age, most buyers of hard seltzers, flavoured alcoholic beverages (FABs) and hard teas do not know the alcohol base of their drink.
The majority of consumers recall having consumed spirit and wine-based RTDs. However, most products in those segments are malt-based.
“Many consumers mistake the base of RTD products,” said Marten Lodewijks, president of the US division at IWSR. Lodewijks advised brands to take this into consideration when making their packaging and branding decisions.
But he also warned that there are both positives and negatives to being more transparent with consumers. “Consumers generally assume the alcohol in their RTDs comes from a spirit; educating them on this can have both benefits and risks depending on a brand’s broader portfolio,” he said.
Spirits-based RTDs are a particular bright spot for the US. The category has grown across all states since 2019, with the strongest volume growth in California, South Dakota and Connecticut.
These drinks are forecast to grow by 6% compound annual growth rate (CAGR) from 2023 to 2028.
The 10 states with largest volume percentage increases for 2024 (January – August) are Wyoming, Colorado, Virginia, Tennessee, New York, Florida, Arizona, Indiana, New Jersey and Wisconsin.
Volumes in these states all grew well over 15% versus the same period last year, according to IWSR’s US Navigator. The Navigator uses monthly volume data for the total US beverage alcohol market by price tier, for all 50 states going back to 2019.
So which spirits are seeing the most success?
Vodka and Tequila dominate the spirits-based RTD category, and will continue to do so, particularly as brands offer more sessionable vodka soda and Tequila soda options.
But gin also shows some potential. Gin-based RTDs hold just 5% of total RTD market share, but their popularity is rising, particularly among legal drinking age Gen Z consumers.
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