RTDs continue to grow boosted by hard seltzers and FABs

By Michelle Perrett

Published: 19 October, 2021

The market for ready-to-drink (RTD) alcohol products continues to show traction and demand from consumers, according to a new study from IWSR Drinks Market Analysis.

It said that RTD volumes have been growing faster than any other major drinks category since 2018, and is expected to significantly outperform the wider beverage alcohol market over the next five years. IWSR predicts RTDs will increase market share of the alcohol market to 8% by 2025 (from about 4% share in 2020) in top RTD markets.

The new IWSR RTD Strategic Study examined the RTD category across 10 focus markets (Australia, Brazil, Canada, China, Germany, Japan, Mexico, South Africa, UK, and US), which represent more than 85% of all RTD volumes worldwide. IWSR forecasts an approximate +15% compound annual growth rate (CAGR) from 2020 to 2025 for RTDs in these markets, compared to about +1% CAGR for total beverage alcohol during that same period.

IWSR projects that hard seltzers will account for half of all global RTD volumes by 2025 (up from 30% share in 2020), driven by consumer demand for flavourful drinks with “better-for-you” attributes.

Across the 10 focus markets in the study, hard seltzers are expected to post total volume growth of +26% CAGR 2020-2025.

IWSR also predicted that Flavoured Alcoholic Beverages (FABs) and Cocktails/Long Drinks would be the driver of non-hard seltzer RTD growth.

It highlighted countries such as Brazil, China, Japan, and South Africa where the RTD market is driven by FABs. This sub-category is forecasted to grow by +7% CAGR 2020-2025, led by markets such as Japan, the US, and China.

Other rapidly growing RTD sub-categories include hard coffees, hard kombuchas, and hard teas.

Kantar data recently revealed that sales of FABs in the grocery sector were up 11% during 12 weeks to 3 October boosted by innovation in the pre-mix sector with products such as Jack Daniel’s Tennessee Honey Whiskey and Lemonade and the continued proliferation of hard seltzers.

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