The Rise of the RTD Cocktail

The convenience of a single-serve drink drives this beverage segment.

May 14, 2024

This article is brought to you by Southern Champion.branded-content-logo-to-go-in-copy.png

There’s an industry saying: Convenience retailers don’t sell a product, they sell a concept—convenience.

However, there’s one merchandise category that underscores that notion by its inherently convenient nature.

Ready-to-drink (RTD) cocktails are seeing tremendous growth in the convenience channel, growing at 63.5% over the last 52 weeks ending February 24, according to data from Nielsen.

“The RTD category is just on fire,” said Tracy Frisbie, executive vice president of sales and marketing at Southern Champion, a female-founded ready-to-drink cocktail manufacturer. BuzzBallz, a ready-to-drink cocktail brand developed by Southern Champion, has the highest sales among wine and spirit-based premixed cocktails with a total of $168 million in scans for its single-serve sizes (last 52 weeks ending February 24).

“Alcohol is a huge trip driver to convenience stores, so it’s a very important category, and this shift toward RTDs has definitely benefitted convenience. C-stores are the fastest growing channel for the whole RTD segment,” she added.

The single-serve nature of a premixed cocktail is what drives a lot of the category’s sales, especially in the cold box.

“Most of the time when people want a cocktail, they just want one cocktail. So the success of the single-serve sales is really driven by that, as well the convenience of being able to buy just one,” said Frisbie. “I think single-serve is really all about convenience, and RTDs in general are all about convenience.”

Consumers also gravitate toward the single-serve option because it gives them the ability to choose the flavors they like most, without having to get a multipack that might include one they don’t personally enjoy.

“We actually do the opposite of what most brands do—other brands usually put out a multipack with multiple different flavors. It’s all personal preference, but there is always a flavor in there that someone doesn’t happen to like,” said Frisbie. “When we track how our consumers purchase, we can see that they purchase multiple of the same flavor. They find the one they like most, then go buy a few of that same flavor BuzzBallz in one trip.”   

It’s a key consideration, since flavor is the number one decision driver for consumers when choosing an RTD beverage, according to Frisbie. Buyers are first and foremost looking for brands that offer “new and interesting flavors,” she said. “Flavor innovation is really important. It’s the number one thing consumers are looking for. When we introduce a new flavor, both retailers and consumers get really excited about it, and we often receive a lot of requests to bring back a limited, special edition flavor or offer it year-round.”

Southern Champion usually releases a Spring/Summer limited flavor—this year’s is Passionfruit Martini—and two to three holiday flavors. The company will be bringing back customer favorites Cookie Nookie and Eggnog for the holidays. They’ll also be debuting a Pumpkin BuzzBallz Biggie for Halloween.

Consumers are also increasingly looking for RTDs with a high ABV level. “We now see high ABV level as a top three reason that consumers choose a brand,” said Frisbie. “Overall, the big things consumers are looking for are taste, convenience and value—and RTDs offer that.”

This is part one of a two-part series on Southern Champion. Learn more about Southern Champion.