As Hard Seltzer Levels Off, Canned Cocktails May Benefit This Year
According to Drizly’s 2021 Retail Report, 2022 is poised to be a big year – with tequila expected to outsell vodka for the first time ever, cannabis-infused beverages on the rise, organic wines making a comeback, and ready-to-drink (RTD) cans predicted to take up more and more shelf space.
The third annual report from BevAlc Insights by Drizly – North America’s largest alcohol e-commerce and on-demand delivery platform – took the pulse of more than 500 adult beverage retailers nationwide. Throughout the report, survey responses are supplemented by sales data derived from the Drizly platform during 2021 to provide deeper context and insights.
Now, looking further into shelf space rebalancing this year… ready-to-drink cocktails and craft beer may well benefit from the leveling off of hard seltzer, according to participating retailers. These retailers plan to reserve the most additional shelf space to canned cocktails this year, followed by craft beer, leaving hard seltzer in third place (waves White Claw goodbye).
After a banner year in 2020, RTD sales held strong in 2021 with triple-digit growth. Off-premise dollar sales for premixed cocktails grew 126 percent, per NielsenIQ. Vodka-based drinks accounted for more than half of the category’s off-premise dollar sales for the 52-week period ending October 2, 2021 – increasing 110 percent over the previous year. Tequila-based drinks saw the highest growth at 138 percent, with rum-based drinks behind at 132 percent.
Though the canned cocktail category was already “spreading,” the outbreak of Covid-19 set the category on fire. When restaurants and bars shuttered in March 2020, consumers brought on-premise cocktail culture home – resulting in a purchasing uptick in the ingredients to recreate their favorite restaurant and bar cocktails. It was also a boom for single-serve, pre-crafted canned beverages (cracks Mai Tai, Mexican Mule, or Mango Margarita in a can).
Drizly’s fastest-growing RTD brand offerings are a mix of well-known global producers – such as Hornitos and Ketel One – and smaller names like Dezo and ‘Merican Mule.
“I think we will continue to see lots of innovation in the RTD category from both start-up brands, as well as, existing brands looking to find a niche in the increasingly crowded market,” shares Liz Paquette, head of consumer insights at Drizly.
The RTD category not only has staying power, states Paquette, but its share will continue to increase. “It is still a very small piece of the total liquor category and about half the size of its hard seltzer counterpart – so we believe there is still room for continued growth.”
She also predicts that consumer education will be a key driver for the RTD category. “Consumers will become savvier about what they are drinking – from ingredients to attributes like organic and gluten-free,” she adds.
Today’s ready-to-drink cocktails have come a long way from decades-old predecessors like wine coolers and malt-based hard lemonades – promising premium ingredients; no artificial flavoring, malt nor alcohol from cane sugar like hard seltzer.
All in all, canned cocktails are poised for strong growth, driven by flavor innovation, and a shift away from hard seltzer.