Wine Talk with Alice Swift
Ready-to-Drink (RTC) Beverages, the NEW New Moneymaker
It’s always been a well-known fact that in the restaurant business, beverages are the big moneymaker, in particular, soft drinks. The business’ cost to purchase the flavors and equipment is quite low, so establishments can price with high profit margins. When looking at the bigger picture, the non-alcohol drink market globally is US$1,146,791m in 2020, with more than 60% made up of soft drink sales.1
However, there is a larger revenue stream in another sector within the beverage world, and you guessed it—it’s the alcoholic drink sector. Alcoholic beverage market totals US$1,587,868m worldwide for 2020, with beer taking the market majority at US$615,933m.2 In recent years, I have been discovering more and more “craft” beverage establishments popping up everywhere in all my residences. From Claremont, California (Claremont Craft Ales, Last Name Brewing), to Las Vegas (Banger Brewing, Bad Beat Brewing), to Hawaiʻi (Beer Lab HI, Ko’olau Distillery), craft breweries and distilleries are everywhere! Non-alcohol beverages are a whole other world, with categories like water, non-alcoholic cocktails, energy drinks and health drinks rising to the surface.
However, lately during my grocery store visits, I have been noticing some changes to the supermarket layouts of beverage products. A sector called the Ready-to-Drink, or RTC beverages, have really started to take over the supermarket inventory. There are entire endcaps, aisles, and even refrigerated sections next to chilled beers that have become privy to RTC drinks. Not only have new products been coming to market and changing floor layouts in stores, but changes to the packaging and design of beverages have also been evolving. Read on to learn more.
Evolved Packaging and Marketing
Because of the need to evolve and innovate to increase beverage consumers, producers and companies are needing to think outside-the-box and experiment with ways to disrupt the market. Millennials have seen a surge in alcohol consumption in recent years, going for the “custom” beverages, whether it’s the artisan mixologist-created cocktails in hipster bars, or the “limited” edition flavored spirits and mixers.
Design has always been a factor in purchasing decisions of beverages like wine. In the past, we have seen the classic, more ornate wine labels, with script font and to some event with gold foiled text to represent higher end wines. The customer base of the 21st century is looking more for the minimalist look. Clean, simple packaging design, with sans serif fonts. At the same time, bright colors are appealing to audiences, especially product that are Instagram-able! Social media plays such a large role in the food and beverage industry now, so it only makes sense that packaging and visual design of beverage is now focused on being camera-ready.
Ready-to-Drink Beverages in Off-Premise Establishments
One market that has been around for a while, but seems to have really come to light in the past few years, are with Ready-to-Drink (RTC) alcoholic beverages. Why sell hard alcohols and mixers separate when you can combine them and flavor them with an endless number of possibilities?
When visiting the average supermarket that has a decent wine selection, I now see a new section that has formed in recent years. During my last visit to Safeway in Hawaiʻi (a.k.a. Vons in other states), an entire set of shelves has now been dedicated to these RTD beverages! Based on the research, there is one key reason for the surge in demand: CONVENIENCE!3 This is the primary reason that demand for RTD beverages have taken off in recent years.
To aid consumers to support their convenience, there are a few key packaging components to RTD beverages. Rather than large bottles of wine, spirits or mixed drinks, the focus is now on single-serve portions. Packaging now mimics other non-alcoholic drinks that have taken off, most notable being coconut water and healthy energy drinks. Slimmer cans (like Red Bull cans), and Tetra pack (like the single-serve coconut water, made from similar materials as the classic “juice boxes”) seem to run the majority for RTD drink packaging.
The earliest brands I can remember that gained in popularity are the Budweiser branded Lime-A-Rita and Straw-Ber-Ritas, which started in 2012 and 2013, respectively. The other common mixed drink that makes sense to can, would be the classic “Jack and Coke,” which has evolved into an entire line of Jack Daniel’s Country Cocktails with something for everyone. Now there are entire aisles and sections dedicated to RTC wine, beer, cocktails, seltzers with alcohol, malt beverages, and more!
Next time you stop by the supermarket, explore the beverage aisle and see how much they have evolved over the years. From the graphic design and packaging, to the innovations of the drinks themselves, the beverage market refuses to grow stagnant and continues to predict what will be the next “it” thing.
Until next month, Cheers~!