Considering the heavy impact of COVID-19 on all alcoholic drinks categories and leisure activities it was expected that RTDs would be one of the worst performing categories. Surprising many, it was able to remain competitive, transfer to home consumption and show overall growth in 2020.
The glass bottles shortage in Brazil is a long story and has been known for years, but 2020 worsened the situation as companies broke contracts at the start of the pandemic and when the demand bounced back in Q2, companies needed bottles again, and as soon as possible. Unfortunately, suppliers were not able to provide them.
AMBEV was one of the first players to invest in RTDs and continues to be the most innovative and flexible player in the market, with significant launches, like the Beats 150 BPM, anticipating the 2020 carnival season and the development of Beats Gin & Tonic surfing the wave of gin’s popularity. At the end of 2020 it also innovated with its first RTD in a metal beverage can in the form of Beats Zodiac, introducing new flavours at the same time.
RTDs are problematic in Brazil; the product just started its lifecycle, does not have precise positioning nor a target consumer defined. It competes with all alcoholic drinks, from beers to spirits and consumers are still discovering the potential products it can offer, from gin and tonics, and hard seltzers to alcoholic mixes.
A major concern among RTD players in Brazil and other alcoholic drinks categories is which are the substitute products for RTDs. This is unclear as of yet, since different players try to appeal to different publics, income levels and positionings but one thing is clear, the consumer perception and awareness of the product needs to be developed if RTDs want to be competitive in the long term.
Another major concern of the category is how can it position itself as premium to enlarge its margin. For RTDs this is particularly challenging since it does not have a clear substitute product.
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This report originates from Passport, our RTDs research and analysis database.
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