NIQ Beverage Alcohol Vertical |
July 2025
The Beverage Alcohol landscape is continuing to evolve, and the “Ready to…” segment is no longer just riding the wave. It’s steering the ship.
Once a novelty, Ready to Drink (RTD) and Ready to Serve (RTS) products have matured into a $13.9 billion category, now claiming 12.5% of total BevAl dollar sales. As we reach the midpoint of 2025, the Fourth Category is no longer just a trend; it’s a strategic growth engine.
But with growth decelerating and shelf space tightening, the question has shifted. It’s no longer “Will it last?” It’s “What’s the next move?”
From Hype to Habit: The Fourth Category Comes of Age
RTDs and RTS offerings have fundamentally reshaped how consumers interact with alcohol. What started as a trial-heavy category driven by convenience and flavor innovation has become a mainstay in the modern drinking repertoire. Over the past 52 weeks, sales are up +3% year-over-year, signaling continued momentum, but also a shift in dynamics.
For example:
- Hard Seltzers and FMBs are maturing, with Hard Seltzers down -7.4%.
- Spirits-based RTDs are surging, up +20%.
- Wine-based RTDs are up +14%, driven by punchy cocktails and alternative packaging.
Consumers are still buying, but they’re becoming more selective. Flavor fatigue is real. Retailers are tightening assortments. And brands that once rode the wave of novelty are now facing the realities of a maturing market.
Differentiation Is the New Baseline
In today’s Fourth Category, “me too” won’t cut it. Brands that replicate successful flavors, formats, or marketing strategies may find short-term wins, but long-term growth will only come from authenticity, innovation, and strategic clarity.
Winning in this space means:
- Standing out with bold, differentiated flavors and formats
- Leading with taste and trust, not just trend
- Planning for the full lifecycle, from launch to sunset
Retailers are asking: What’s next? And they expect brands to have a compelling, data-backed answer.
Channel Strategy Is Critical
Not all channels are created equal. For example, Convenience channels are driving growth, especially where Spirits licensing is expanding. Meanwhile, RTS products are gaining traction in Food and Liquor channels, with premium packaging and hosting occasions fueling sales spikes around holidays. Online is also a bright spot: RTD and Prepared Cocktail eCommerce sales are up +20.2% vs. +3.3% for total alcohol.
Retailers are leaning into formats that deliver immediacy and portability, like single-serve cans that now account for over 30% of RTD dollar sales. Spirits-based RTDs are also gaining shelf space in convenience stores, where regulatory shifts are unlocking new distribution potential. And with 70% of RTDs consumed the same day they’re purchased, proximity to point-of-consumption is becoming an advantage. Brands that prioritize convenience retail partnerships and monitor shifts in the marketplace are well-positioned to unlock new distribution opportunities.
What Comes Next:
Clarity in a Crowded Field
As the Fourth Category matures, the path forward will be defined by strategic clarity. That means:
- Knowing your consumer, not just demographically, but behaviorally. What occasions are driving purchases? What unmet needs remain?
- Investing in innovation, but with discipline. Flavor for flavor’s sake won’t cut it. Innovation must be purposeful, differentiated, and scalable.
- Building brand equity, not just awareness. On a crowded shelf, trust is the ultimate differentiator.
The Fourth Category isn’t slowing, it’s evolving. And brands that evolve with it will be the ones that win.
