WASHINGTON—Hard seltzer’s popularity has propelled the growth of canned cocktails, CNBC reports. The ready-to-drink cocktail category is the fastest-growing in the alcohol category, with industry analysts and beverage companies forecasting continued growth well into the future.
In convenience stores, alcoholic beverages comprise 8.6% of total inside c-store sales and contribute nearly 4.9% to margin, according to NACS State of the Industry data. Ready-to-drink products such as hard seltzers and canned cocktails continued to surge, in part driven by increased demand for low-carbohydrate, low-sugar, low-calorie drinks, NACS Magazine reports. Within the wine category, the coolers/wine cocktails subcategory was the fastest growing last year as average sales increased 30.1% in 2020 off a relatively large base in 2019, SOI data indicate. Read more NACS SOI insights from the alcohol and other c-store categories in the June issue of NACS Magazine.
“Consumers like them, and they also provide on-premise operators a profitable option when faced with capacity and staffing issues, tighter margins and slimmer menus,” said Brandy Rand, COO of the Americas at IWSR Drinks Market Analysis. “Canned cocktails are also a great option for drinks-to-go in states where legal.”
Between 2019 and 2020, canned cocktails skyrocketed 50% in the United States, according to IWSR, although the overall segment is only 3% of U.S. spirits by volume, according to data from the Distilled Spirits Council of the United States. Bank of America Securities predicts premixed cocktails will hit between $3 and $4 billion in revenue in the near future.
Consumers who pick their alcoholic beverages because of taste and convenience are flocking to these ready-to-drink cocktails, which have a more premium vibe because of the liquor included in the drink. However, because states regulate premixed cocktails differently than flavored malt beverages, it can be difficult to find the beverages outside of liquor stores.
Cutwater, which Anheuser-Busch InBev purchased in 2019, is the No. 2 best-selling premixed cocktail brand based on dollar sales with a 10% market share of the ready-to-drink cocktail segment, according to recent IRI data. “I think that COVID was somewhat a propeller for ready-to-drink because it brought the convenience of the bar to your home,” said Fabricio Zonzini, president of AB InBev’s beyond beer department. “And we saw that growth.”
Diageo, which owns the Johnny Walker brand, recently bought Loyal 9, which has a vodka and lemonade cocktail-in-a-can, in addition to Diageo’s own premixed canned cocktails with Tanqueray, Crown Royal and Ketel One Botanical. “The category has been doing really well. It’s the fastest growing part of [total beverage alcohol] and is just accelerating fast,” said Jay Sethi, senior vice president Diageo’s North American convenience category.
The premixed cocktails are not the only alcohol trend that has proven popular with consumers. Recently, consumers and retailers have been pushing to keep “booze-to-go” laws in place even post pandemic, though the push has not been without opponents.