Making hay while the RTD sun shines

RTD is forecast to continue its growth trajectory for the next few years. Here Norrelle Goldring explores how to best manage and leverage the category.

RTDs continue to gain share within total beverage alcohol, albeit within a shrinking alcohol ‘pie’. They are gaining share from cider, beer, and to an extent, wine. Much of the growth has stemmed from new product introductions and premium offers, and category volume is anticipated to increase by 3.5 per cent between 2023 and 2028¹.

Many of the new RTDs tap into a number of consumer trends including health consciousness, premiumisation and affordable luxury, and nostalgia and simplicity (which is where all the lemon and citrus SKUs come in).

However, SKUs have proliferated, creating challenges for retailers, brands and shoppers alike. Ampersand, for instance, has more than 10 flavour variants. Given the continued growth outlook for the category over the next few years, the game now becomes about managing and optimising it.

Given the broadening of the category definition, coupled with the growth of mindful drinking, this begs the question of where non-alcoholic beverages fit in.

Non-alcoholic options such as sodas and cocktails are becoming an integral part of the RTD category, appealing to younger consumers, non-drinkers and mindful consumers who may occasionally swap out an alcoholic RTD for its non-alcoholic counterpart.

This means that non-alcohol RTDs should be positioned alongside their alcoholic counterparts in the chiller and at shelf to encourage exploration and highlight similarities in occasions. No longer should they be relegated to obscure corners of the store. Further, non-alcoholic and alcoholic RTDs can be bundled together for shared occasions such as barbecues and picnics, showcasing them as complementary offers.

Market saturation with a volley of producers and new products, often in bold packaging, means obtaining shelf standout amid the riot of colour is simultaneously more crucial but also more challenging. The proliferation of SKUs can make the category difficult for shoppers to navigate. They face decision fatigue due to the array of flavours, formats and brands. Similar flavours across brands exacerbate this, especially with popular options such as citrus based RTDs. Yes, lemon is hot right now, but how many lemon SKUs do you really need?

With the rise of premium offers, RTDs are exhibiting wider price variations. And given smaller can sizes, shoppers may perceive RTDs as overpriced compared to other categories or to bottled spirits, and value-for-money based shopping becomes more difficult.

As health-conscious trends grow, consumers increasingly demand detailed information on ingredients, calorie counts, and alcohol content. Clear labelling is a must. Call out any unique ingredients such as botanicals or superfoods.

Here’s a starter list of ways to manage and optimise RTD execution in-store using the main point of purchase drivers:

• Range: Balance variety and simplicity.Reduce duplication of flavour variants across brands, while retaining a diverse range of trending flavours, and low-calorie, low-alcohol, premium and organic options. Offer variety packs, limited-edition flavours, and pick-and-mix to drive trial.
• Space and layout: Allocate space based on performance metrics.With RTDs outpacing cider in growth, consider reallocating shelf space. Create an intuitive shelf and chiller flow that incorporates non-alcohol options, and both highlights key segments and encourages cross-category exploration. An example space flow, left to right (if beer is on the left of the RTD category) could look like: ginger beer > non-alcoholics > seltzers > spritzers > cocktails > sodas & light RTDs > dark RTDs.
• Visibility and display: Create a dedicated RTD display zone or endcap that showcases and rotates the latest new product introductions and limited editions. Use signage to highlight features such as ‘crafted with natural ingredients’ or ‘only 100 calories per serve’.
• Pricing and promotion: Clearly communicate the value proposition of premium RTDs. Encourage category trial and repeat purchase through bundled promotions, including bundling alcoholic and non-alcoholic RTDs together for a specific occasion. Run tastings for new product introductions or across a brand to drive trial and exploration.
• Persuasion and recommendation: equip store staff with product knowledge in order to make effective recommendations. This should include flavour profiles, key ingredients, and relevant occasions. Tap into brand manufacturer tools and resources for this. Encourage staff to share personal favourites or suggest pairings, such as matching RTDs with snacks. As is often done with wine, promote ‘staff picks’ at shelf and chiller.

The RTD category shows strong potential for continued growth due to shifting consumer preferences toward convenience, health-conscious choices, affordable luxury, and the cocktail culture.

To sustain frequent product introductions, brands will need to focus on true innovation, unique consumer needs, and market differentiation. Products that align with changing consumer preferences, such as low alcohol, low-sugar, organic, or sustainable may have a better chance of long-term success in an often-fickle category.

By addressing shopper challenges and optimising range, space, visibility, pricing, promotion and staff recommendations, retailers and brands can enhance the shopping experience and further drive RTD category performance.

Sources:

¹https://www.thespiritsbusiness.com/2024/10/rtd-growth-slows-as-category-matures/

This article originally appeared in the 2025 Industry Leaders Forum edition of National Liquor News.