Flavour innovation trends for spirit-based RTDs in the US

Spirit-based RTDs are increasingly entering the US market, driven by consumer preference for the alcohol base and flavour options


Malt-based RTDs dominate the US RTD market with a 91% share by volume. However, spirit-based RTDs are increasingly entering the landscape – in fact, spirit-based RTDs in the US grew by 53% in 2021, around double the growth of the wine- and malt-based categories.

“By 2025, spirit-based RTDs are expected to grow at a CAGR of 33% in volume in the US, and many producers and distributors are leveraging the opportunity,” says Brandy Rand, COO Americas at IWSR. “Some are exploring the spirit-based RTD space for the first time, and others are expanding their existing portfolios.”

Spirit-based RTD growth drivers

The growth of spirit-based RTDs in the US has been partly linked to flavour options. Flavour is the primary purchase driver for RTD selection by consumers, and spirit-based RTDs enjoy the advantage of being available in a spectrum of familiar cocktails flavours and taste profiles. One example is Cutwater Canned Cocktails, whose range includes four flavoured Margaritas, a White Russian, and a Mojito, among other well-known drinks. Likewise, the Tip Top Proper Cocktails range includes a Negroni and an Old Fashioned in a can.

The alcohol base is also a purchase driver. A large majority of consumers in the US say they perceive a spirit-based RTD to be of higher quality. As the category matures and buyers become more knowledgeable, the preference towards spirits as a base is likely to strengthen.

Among the rising numbers of spirit-based RTD products, vodka and tequila bases are dominant, together accounting for more than 50% of new spirit-based RTD launches between 2019 and the first half of 2021, according to IWSR data.

Flavour innovation

Spirit-based RTDs have developed into two flavour profiles, which the IWSR has defined as “complex flavour” and “simple flavour” products.

“Complex flavour” drinks are those that contain full amounts of sugar, calories, and ingredients. They provide the full-flavour taste profile of an alcohol drink and tend not to be carbonated. In contrast, “simple flavour” drinks have lower sugar and calorie contents. They tend to be lighter and clear, based on seltzer or soda, and therefore are generally more refreshing in character.

The two groups aren’t completely distinctive, however, and already show some overlap. For example, Spa Girl cocktails are low in sugar and carbs, and at 11.5-16.5% ABV, they contain 3.4 times more alcohol per serving than the average spirit-based RTD.

Of the two groups, the complex flavour category currently has the larger market share in the US. Within this category, whisky RTDs are growing fastest by volume. Whisky is expected to surpass rum, currently the most important spirit base in the complex flavour category, by 2025.

The simple flavour category is expected to grow faster in the coming years, at a CAGR of 50%, versus 25% for the complex group. By 2025, the category is expected to have achieved a 43% market share of the RTD market in the US. Simple profiles are expected to gain share among the tequila, rum, and whisky-based group.

“The majority of products containing ‘simple’ flavour profiles also contain the highly sought-after health and wellness attributes of low sugar, low carbohydrates, and low calories,” says Rand. Consumer engagement for products with these better-for-you attributes is high, partly explaining the rapid growth projected for this category.

Producers are also innovating. By introducing a larger number of simple flavour products into the market, with enticing flavour profiles, they aim to maintain consumer engagement levels with the category into the future.

Packaging innovation

Alongside evolving flavour profiles, some producers are also investing in new packaging formats. IWSR is increasingly seeing producers of premium RTD products shifting towards larger RTS (ready-to-serve) formats.

These 750ml glass bottles allow spirits companies to stand out in an increasingly crowded canned RTD marketplace, while leaning on glass bottles (rather than plastic ones) as a premium cue. Barrelsmith, for example, offers Negronis, Manhattans and Boulvardiers in 750ml glass bottles.

“RTDs leveraging the 750ml glass bottle format are intended to be poured into a glass over ice, similar to a freshly made cocktail,” says Rand. “This option also allows for easier at-home entertaining and sophisticated presentation that can elevate certain occasions.”

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The above analysis reflects IWSR data from the 2021 data release. For more in-depth data and current analysis, please get in touch.

CATEGORY: All, RTDs  |  MARKET: All, North America  |  TREND: All, Convenience, Innovation  |