By Cole Younger Just
Ready-to-drink (RTD) cocktails are popping up overnight in every market, especially in Atlanta. Especially now that people are taking more food and drinks to-go, the trend toward pre-mixed drinks in a can will only continue to get bigger. In June, Nielsen reported that sales of RTDs grew more than 80% for 11 consecutive weeks, and sales had surpassed gin and Irish whiskey in off-premise sales. So if you haven’t already, consider adding a few to your menu.
The trend dovetails with the hard seltzer phenomenon, which started back in 2013. That’s when Nick Shields invented the hard seltzer category with SpikedSeltzer, which was eventually acquired in 2016 by Anheuser Busch InBev and rebranded in 2019 as Bon & Viv’s Spiked Seltzer. (The cans feature a couple of mermaids.) Since then the hard seltzer industry has spiked to a value of more than $1 billion.
I first started noticing this segment start to really emerge when Ballast Point, the craft beer company out of San Diego, spun off their spirits division into Cutwater Spirits in 2017. The brand released a line of 12-oz. canned cocktails with the intention of giving the La Croix-crushing, vodka soda culture what they want – a ready-to-drink version of the spirits that they were already manufacturing, like their line of Old Grove gin and Fugu vodka.
Then more players began to emerge in the RTD market. Hard seltzer became the notable buzz word with the emergence of brands like White Claw – which first launched in 2016 – and Sam Adam’s Truly, a hard seltzer first introduced in 2016 and retooled in 2019. Some four years after the hard seltzer craze started to pick up steam, there’s a veritable arm’s race of companies trying to launch their own version of hard seltzer. Recently, Coca-Cola announced that it is getting into this space with its Topo Chico brand.
This new market is distinct from malt beverages like Mike’s Hard Lemonade (which is owned by the same parent company as White Claw)– it’s essentially a vodka-soda made with a fruit-essenced La Croix-like soda, canned and ready to drink canned and ready to drink without the need to craft any other aspect of the drink other than chill it down. This version of the RTD market is far and away the market leader of the segment.
The smaller section of the market is being held by more craft versions of classic highballs like mules, gin & tonics, whiskey and colas, etc. – all containing a higher degree of sugar that the health-conscience crowd is eschewing. Jack Daniels just jumped into the RTD game this summer with canned versions of popular mixed drinks, like Jack and Cola and whiskey, honey and lemonade.
There’s even a smaller section of the market that is being fought over by other kinds of classic cocktails like Old-Fashioneds, Manhattans and martinis. Local Brands like Tip Top Proper Cocktails feature an Old-Fashioned, a Manhattan and a Negroni that are being sold in 100 mL cans – these are much heartier cocktails that are true knockouts in terms of flavor and balance. These are intended for the craft cocktail drinker that is looking for that same experience in a portable format.
Bigger liquor brands have moved into the category as well – it seems that nearly every large brand has their own version of an RTD now. But there’s two factors that will be keeping the RTD trend flowing for the foreseeable future.
First, the pandemic. COVID-19 has only accelerated the pace at which these portable cocktails are flying off the shelves and into the hands of quarantine homes across America.
Then there is House Bill 879, which was passed at the end of Georgia’s legislative session this summer. The bill allows grocery retailers, liquor stores and some restaurants to deliver beer, wine and, yes, RTD cans, to customers at home, provided they show a valid ID upon delivery.
Gov. Brian Kemp signed it into law on Aug. 3. Once the Department of Revenue draws up the final regulations for home delivery of alcohol, businesses will then be able to completely embrace this new law and expand their business model to delivery. This seismic shift in regulation shows how the legislative landscape is changing based on new consumer trends. Convenience and safety is what it’s all about now.
Selling a bottle of spirits is in effect asking your consumer to take an additional step in preparing a drink in order to make the product consumable (for most people, that is). This RTD model eliminates the need to further manipulate, prepare or modify the product. It’s literally as easy as crack and go, just like beer or soda, but without the added calories sugar or artificial flavors. This provides the consumer convenience without the unwanted additives.
But what is the best way to feature an RTD on a menu? The category itself is still finding its way and looking to establish as an actual market segment in the alcohol category as a whole. Off-premise consumption is where this is going to shine brightest.
The pandemic is also changing people’s habits long term. Once a vaccine has been successfully developed, vetted and disseminated to the public, large gatherings should once again be safe to attend. There will be a lot of potential in that market, especially music festivals and sporting events.
The time it takes to prepare a craft cocktail is, in the eyes (and pockets) of the restaurant or bar owner, money out the window in the form of labor. If bartenders and concession workers can pop the top and sell five RTDs in the time it takes to prepare and sell one craft beverage, it’s a no-brainer. It’s a win for the bottom line in a time when restaurants hit very hard by the pandemic are hurting. Profit margins are especially slim to non-existent, and owner/operators need all the help they can get.
Additionally, by offering RTDs, businesses can save on the often intense amount of labor needed to prep and keep up with a craft beverage program.
On the other hand, many top beverage programs have offered house-made RTDs for years. While the labor is certainly still incurred on the front end, you have highly curated drinks ready to quickly serve.
These days, it makes a ton of sense to have some of these RTD cocktail offerings on your menu for a quite a few reasons: ease of execution and speed of selling the SKU to your customer and portability of product – these RTDs are selling amazingly well in this newfound world, where all manner of beverages are being offered to-go for off-premise consumption. And RTDs typically have a lower ABV, which fits in with the general trend in alcohol consumption toward more sessional beverages.
The RTD category is set to move into territory previously occupied by beer and wine sales. It seems likely this is the direction the entire industry is going to go given where we are as a society in this COVID-19 era.
These canned drinks help diversify menus with quick service and lower ABVs, and they have been a social media darling. Their popularity should continue even after the pandemic ends.
Cole Younger Just is co-owner of Atlanta-based Just Walk Consulting, where recent clients have included Full Commission and Old Fourth Distillery. He was previously beverage director at Bellina Alimentari, The Cockentrice and Last Word. He’s originally from the New Orleans area, but has called Atlanta home since 1996.
