During 2020, the COVID-19 pandemic put significant pressure on demand for spirit-based RTDs at a time when the category was already facing strong competition from other categories of alcoholic drinks, including notably flavoured lager and non/low alcohol beer. The presence of spirit-based RTDs in the on-trade has been under pressure for several years as these drinks have become increasingly scarce as the novelty has worn off the category.
One major factor that negatively impacted the performance of RTDs in 2020 was the limited presence that these products have in online channels. Key players in other categories of alcoholic drinks were able to mitigate sales declines during the year as they focused more on online marketing and sales.
While wine-based RTDs recorded negative sales growth during 2020, sales declines were far less severe than what was registered in spirit-based RTDs over the course of the year. Among the major reasons for the less negative performance recorded in one-based RTDs was the greater focus on marketing promotions among major players, with the efforts of major players in the category to improve the presence of their brands in both online and offline channels supporting sales.
The forecast period is set to see e-commerce and online marketing become increasingly crucial to the activities of the leading players in RTDs. This is part of an industry-wide trend that was already in evidence prior to the onset of the COVID-19 pandemic, but which has taken on a life of its own since the second quarter of 2020, when the initial imposition of PSBB quarantine regulations and the reluctance of consumers to shop in stores due to fears of contagion spurred a huge shift towards online channels for the purchase of a wide range of fmcg, including alcoholic drinks.
The increasing competition that RTDs faces from other categories of alcohol drinks is expected to be a major factor underpinning the negative sales performance that is slated for the category during the forecast period. Total volume sales of RTDs are expected to continue dropping until at least 2024, with demand for spirit-based RTDs set to remain under particular pressure.
Wine-based RTDs is expected to mount a stronger recovery from the COVID-19 pandemic than spirit-based RTDs. Indeed, the forecast period is expected to see wine-based RTDs record a positive overall sales performance in total volume terms, with positive growth expected to return to the category by 2023.
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Understand the latest market trends and future growth opportunities for the RTDs industry in Indonesia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our RTDs research and analysis database.
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