2021 was plagued by inflation in alcoholic drinks, and as higher prices aligned with lower incomes due to more informal working, as well as a persistent high unemployment rate, companies needed to strategise in order to remain relevant, which is where RTDs come into the picture. RTDs in Brazil often have a much lower price point than spirits, for example Catuaba Selvagem is sold at an average of BRL13 per litre and Skol Beats at BRL17 per litre, while spirits such as standard vodka are sold at an average of BRL35.
At the same time as RTDs became a solution to higher prices and inflation, demand was also seen for cocktails with convenience. Two major new companies were trending in 2021, with the proposition of delivering high-quality cocktails in an RTD format: APTK and Benerick’s.
The strength of RTDs in Brazil does not come only from their price positioning or convenience, but also from being able to penetrate a wide range of consumption occasions, exactly because of their convenience. The lack of preparation makes it a category similar to beer, that can be explored both on-trade and off-trade, both in high and low energy social occasions, as well as when consuming alone.
The momentum of RTDs seems to be unstoppable. Although expected to see a slowing growth rate, it is expected to be unfazed by the 2022 scenario of high inflation and international disarray.
It is important to understand consumer behaviour in times of high inflation. The immediate consequence of high inflation is consumer rationality, especially amongst lower income consumers.
As RTDs is a category that can play in a wide variety of occasions, this can be both a strength, but also a potential weakness, as it has to compete with many other alcoholic drinks categories, from beer and spirits to wine. This makes it necessary for companies to educate consumers and position their products properly to ensure their appeal.
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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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