Alcoholic beverage companies are wagering that as consumers shift away from traditional options like wine and beer, ready-to-drink (RTD) canned beverages will emerge as a significant beneficiary of this generational change. However, the rapid pace of evolution within the crowded RTD market suggests that predicting the next big consumer trend can be challenging. Unlike other food and beverage sectors where consumers tend to favor long-standing tastes and formulas, the RTD market is characterized by swift transformations, highlighting a distinctive aspect: these drinks are primarily enjoyed in social environments such as parties.
“People seek unique experiences and follow their peers. The social aspect fosters a lack of loyalty, causing consumers not to settle on the same preferences year after year,” said Michael Nestrud, vice president of research and innovation at Curion, in an interview with Food Dive. “This category must continue to evolve.”
With Grand View Research estimating the ready-to-drink cocktail market to be valued at $3.2 billion last year, major beer producers are heavily investing in RTDs as a strategy for business growth. Molson Coors has taken the lead with the launch of its Happy Thursday spiked refreshers in 2024, along with collaborations with Coca-Cola on Topo Chico seltzers and Peace Hard Tea. During a recent earnings call, CEO Gavin Hattersley dismissed an investor’s concerns about RTDs negatively impacting beer margins, asserting that innovation in the RTD space is beneficial for the beer industry. “All of the growth in spirits is occurring within the RTD category, which is where beer companies are competing,” Hattersley stated.
As the RTD category expands, the increasingly saturated market is poised for a transformation, particularly as consumers seek premium and nonalcoholic options. More companies are exploring novel spirit bases and flavors, sometimes incorporating ingredients that boast health benefits. The industry believes the canned cocktail market has substantial growth potential ahead, especially as younger generations show a tendency to reduce or eliminate alcohol consumption.
Canned cocktails have evolved from the malt-based seltzer format that gained popularity in the late 2010s. Last year, hard seltzer brands like White Claw and Truly broadened their offerings by introducing tequila-based beverages. Additionally, Surfside tea and lemonade, made with vodka, became the fastest-growing alcohol brand in the U.S. in 2024, according to Nielsen IQ data. While the category is dominated by vodka and tequila products, such as Kylie Jenner’s Sprinter vodka sodas and Casa Azul’s tequila soda drinks, Nestrud points out that brown liquors and non-sparkling options hold significant potential.
“I anticipate a surge in diverse spirits and unique spirit bases this year,” Nestrud noted. The trend away from traditional alcohol consumption is particularly evident among Gen Z consumers, who are drinking less than previous generations, opting for moderation or complete abstinence. In response, several alcohol brands have introduced nonalcoholic cocktails that mimic their alcoholic counterparts in similar packaging. Some experts believe that nonalcoholic beverages represent the next frontier in the RTD segment.
Spiros Malandrakis, Euromonitor’s head alcohol researcher, informed Food Dive that most major brewers are focusing on their “beyond beer” portfolios, which include everything from nonalcoholic cocktails to energy drinks, creating opportunities for products that bridge different categories. “We’re observing nonalcoholic RTDs emerging as a promising segment,” Malandrakis observed. In early 2024, White Claw launched its zero-proof seltzer aimed at consumers over 21, containing electrolytes for added hydration. Recently, Constellation Brands announced a minority investment in Hiyo, a producer of nonalcoholic “social tonics” infused with immunity-boosting ingredients like adaptogens.
Leading beverage brands have yet to fully understand the nonalcoholic consumer demographic, as those seeking these drinks are looking for various experiences. Some consumers may desire a close replica of an alcoholic drink, while others seek entirely different flavors. “Am I looking for a boring margarita substitute made with lime juice instead of vodka, or do I want a drink that offers a unique taste experience without any alcohol flavor?” Nestrud questioned.
Shoppers searching for nonalcoholic options to stock their fridges and coolers now have more choices than five years ago. Ritual, recently acquired by Diageo, offers spirit alternatives such as gin, whiskey, rum, tequila, and aperitifs, all containing zero alcohol. Meanwhile, Mingle Mocktails, which markets products like Key Lime Margarita and Blood Orange Elderflower Mimosa, aims to provide a taste experience that completely avoids the flavor of alcohol.
Nestrud believes that there is room for innovation in nonalcoholic cocktails, with potential for more complex flavor profiles. “Perhaps these drinks could include herbs, floral high notes, or bitters,” he suggested. “If someone manages to develop that in a can, I could see it being priced closer to liquor.”
In this evolving landscape, understanding consumer preferences is crucial, particularly as they explore new options like calcium citrate kya hai, which could also appeal to health-conscious drinkers. The future of the RTD market appears to hinge on its ability to adapt to these changing tastes and trends.