Unbottling Alcohol Beverage Industry Trends
In our recent webinar, Uncorking: How Ready-to-Drink Alcohol Beverages are Changing Consumption, we discussed these changing drinking habits and their market implications in detail.
Beer and spirits still reign as top choices amongst consumers, but RTD beverages are steadily growing in popularity. Some key points are recapped below with more detailed data as well as insights covered in the webinar slides, which is now available on-demand.
Changes in Drinking Habits
In 2022, after COVID restrictions eased, market movement showed an increase in off-premise alcohol consumption. In short, more people are drinking at spaces away from bars. It is within this framework that RTD (defined in this study as prepared/pre-mixed cocktails, seltzer, cider, or other flavored malt beverages) consumption is growing.
Overall industry trends to watch are a large increase in RTD consumption, a desire for premium products, and choices based on ingredient transparency. In spite of increased prices and reduced liquidity for some consumers, the alcoholic beverage industry remains strong.
Additional market and industry trends to consider are:
- Targeted Gen Z recruitment
- An awareness of the drivers for Gen Z consumer choices (e.g., earth-friendly choices)
- The concept of the “split-brain budget” when consumers are considering non-essential purchases
- Friction-free, convenient purchasing
Consumption Occasion Study
NIQ wanted to determine what these alcoholic beverage consumption occasions are and the motivations behind those moments to influence strategic product growth and category planning.
NIQ utilized Consumption Moments to understand the actual moments in which customers choose certain products. With NIQ’s agile qualitative research methodology, we were able to see how people behave in their everyday lives and contexts. A real-time, user-friendly mobile app was used to obtain data during consumption complete with pictures of the respondents’ drinks for verification.
Our study design provides a 360-degree view of an individual’s choices: who, what, when, where, with whom, and why someone chooses the alcoholic beverage they do. These six “w” categories are discussed in detail in the webinar.
In this study, we accessed data of 2,539 unique consumption moments of men and women aged 21-66+ from all over the United States to gather a holistic picture of people’s alcoholic beverage consumption choices.
Some Key Study Findings On The Current RTD Market
- RTD consumption has grown +104% in the past 2 years while all other market segments of alcoholic beverages have contracted in their percent of equivalent volume.
- Hard Seltzers accounted for 43% of RTD dollar sales and 65% of consumption occasions. People begin consuming RTD seltzers earlier in the day than other RTDs.
- RTD beverages have the highest share of occasions consumed with a spouse or significant other than all other beverage options. This is true for all RTDs (seltzers, ciders, teas, flavored malt beverages, and pre-mixed cocktails).
RTD Market Growth and the Future
As more RTD options emerge within the alcoholic beverage space, the market share is likely to increase. Our study showed that people find RTDs to be a light, refreshing, easy option that can be consumed while doing other activities. Specific messaging around these motivating factors is a way to target audiences in the warmer months. Additionally, because consumers are more interested in consuming RTDs earlier in the day than other alcoholic beverages, organically linking RTDs to brunch moments is another marketing opportunity.
Recent growth in the RTD space by brands such as Jack Daniels gives consumers the feel of drinking a spirit-based drink with the convenience of a pre-mixed cocktail. Continued growth and marketing of RTDs in this sphere of quality, convenience, and spirit-level alcohol provides another area for potential market capitalization.
With the RTD space growing 102% over the last year, it’s imperative that brands and retailers understand consumer motivations and consumption occasions to seek out future opportunities and capture this market. Our recent webinar, “Uncorking: How Ready-to-Drink Alcohol Beverages are Changing Consumption,” highlighted proven predictive analytics, veteran expertise, and clear, actionable direction to provide key insights for keeping up with the current and future market trends within the ~$90B off-premise U.S. alcohol industry.
Get the Full View of RTD market shifts
Watch our on-demand webinar for a deeper dive into the latest trends with RTD.
Sources
- NielsenIQ Key Growth Strategies for Emerging Beverage Alcohol Brands, Feb 2023
- NIQ Discover Integrated BWS Database; off-premise channels; latest 52 weeks ending 03/18/2023
- NielsenIQ Consumption Moments Alcoholic Beverages Pilot November 2022
- *Discovery NIQ- Bev Al Integrated database Year 2022, Year 2021
- *CSF BevAl 2022 Key Findings Report
