After declining at a high double-digit rate in 2020, on-trade volume sales of RTDs rebounded strongly in 2021 as the easing of the COVID-19 pandemic and related restrictions saw Azerbaijanis start regularly socialising in bars/pubs, nightclubs and similar establishments once again. A nascent recovery in inbound tourism also made a significant contribution to the turnaround of the category in this regard, though it should be noted that on-trade volume growth was bolstered by the fact that sales were emerging from a very low base.
RTDs remained by far the smallest of the five main alcoholic drinks categories in Azerbaijan in total volume and current value sales terms in 2021. These products have a marginal appeal, being primarily consumed by younger adults in urban areas who are interested in cocktail culture and more open to experimentation with sweeter alcoholic beverages and novel flavours.
Sweet-tasting alcoholic drinks are traditionally quite popular in Azerbaijan, particularly among young adults and female consumers. However, the ability of RTDs to capitalise on this preference has historically been hampered by relatively high unit prices and the fact that many consumers who like sweeter options favour mixing spirits with soft drinks.
As further improvements in economic conditions in Azerbaijan boost confidence and spending power among local consumers, RTDs should see off-trade volume sales return to growth in 2022 and then increase steadily over the remainder of the forecast period. The outlook is also reasonably positive at the on-trade level, where growth rates are likely to remain elevated in the short term as more Azerbaijanis resume their usual socialising habits and inbound tourism recovers in the wake of COVID-19, but then slow considerably towards 2026.
RTDs looks set to record substantially faster growth in on-trade volume sales than off-trade volume sales over the forecast period as a whole. This is mainly because on-trade consumption is emerging from a much lower base, with retail demand expected to still account for a dominant share of total sales by 2026.
The decision of Azerbaijan’s government to introduce excise tax on RTDs was a significant contributory factor in the category’s negative performance in off-trade volume terms over 2020-2021, as even before this move these products carried a higher average unit price than beer and cider/perry. Given recent trends elsewhere in the alcoholic drinks market, it is likely excise tax will rise over the forecast period.
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RTD stands for ‘ready-to-drink’. Other terms which may be used for these products are FABs, alcopops and premixes. The RTDs sector is the aggregation of malt-, wine-, spirit- and other types of premixed drinks. These drinks usually have an alcohol content of around 5% but this can reach as high as 10% ABV. Premixes containing a high percentage of alcohol of around 15%+ combined with juice or any other soft drink are included here. RTDs are usually marketed as products to be drunk neat, with ice, or as a cocktail ingredient. Fruit-flavoured, vodka-based spirits with an alcohol content of between 16-21% are classified here. Examples: Alizé, Ursus Roter, Berentzen Fruchtige, Kleiner Feigling.See All of Our Definitions
This report originates from Passport, our RTDs research and analysis database.
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