Chances are high you will see an RTD this Memorial Day Weekend

Chances are high you will see an RTD this Memorial Day Weekend

By Josh Jacobs
Co-Founds and CEO, Speakeasy Co.

At this point as we roll into the long weekend, no one can deny the impact of RTDs in the industry, but are we in a bubble? Will sales plateau? Since many RTDs are capitalizing on major trends, including premiumization and health consciousness, The IWSR predicts there is still an exciting runway ahead, as RTDs are expected to post volume gains of +21.8% compound annual growth rate 2019-2024, surpassing the spirits category in terms of volume in 2021.

However, the major players like Diageo are taking notice and have announced major investments in the fastest growing category in the U.S. Privately owned Gallo launched High Noon, a vodka-based Seltzer in 2019, and has quickly become the leading Spirits based RTD brand. Despite the astronomical growth, High Noon still believes it is 'barely scratching the surface' in terms of its full potential. Gallo notes that in beer, the premium positioned craft category has grown to 17% of total sales, which is a useful marker in assessing the runway for Spirits-based RTDs in the context of total RTDs. While RTDs account for only 2.6% of volume they account for 17.3% of growth.

Given the number of players and sub-categories under the larger RTD umbrella (malt based, wine, and spirits), it will be interesting to see how the marketplace adapts to fighting for limited shelf space. With new brands seemingly launching on a daily basis, newer, emerging RTD brands are navigating the crowded market by focusing on what they can control: e-commerce.

E-commerce for both major players and emerging brands is a sure path to understanding consumers and the data that is driving buying behaviors. The e-commerce approach allows RTD brands to create a footprint and build community, without having to invest in expensive human capital and the "feet on the street" model that the three-tier system requires. Here at Speakeasy, we're excited to continue to help shape the growth of this category through the e-commerce channel and continue supporting our 26 and growing RTD partners.

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