The category was not in a strong position even before the outbreak of COVID-19 and things only got tougher for producers of RTDs in 2020. Firstly, RTDs are generally considered as something to be consumed at parties, festivals, and other social events, most of which were put on hold during 2020 to COVID-19 restrictions.
While 2020 was a tough year for RTDs there were still a few positives. For example, in spirit-based products, while sales of daiquiri, planteur, mojito, caipirinha, vodka orange and gin fizz all plummeted, spritz RTDs still progressed in off-trade volume terms during the first half of 2020.
La Martiniquaise remained the leading GBO in RTDs in 2020 on the strength of its Old Nick, Saint James, Poliakov and Dillon brands. However, following the introduction of a new tax on RTDs in December 2019, it chose to limit its investments in the category.
As cafés/bars reopen and consumers are able to socialise again this should provide a temporary boost to sales of spirit-based RTDs; however, this not expected to be enough to prevent the category from posting further losses over the forecast period. The introduction of new taxes has pushed the price of these products up making them less attractive to consumers, many of whom were already drifting away to other alternative drinks options anyway.
One of the hardest blows could come from a decline in sales of spritz spirit-based RTDs which are made with Italian bitters, such as the dynamic Cinzano Spritz from Davide Campari Milano (distributed by Pernod). Such products were spared the first tax on spirits (due to a sufficiently low alcohol by volume), but they failed to avoid the second one that was introduced in 2020 and which was aimed at the concentration of wine.
While sangria is likely to remain the growth driver of wine-based RTDs, there is seeming potential in hard seltzers as a possible growth driver for spirit-based RTDs. Despite the idea of water with added alcohol being a hard to fathom concept, hard seltzers are scoring a hit in the US and made a promising start in retailers such as Le Bon Marché, Carrefour (Snow Melt), Monoprix and wine cellars in 2020.
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This report originates from Passport, our RTDs research and analysis database.
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