Due to the outbreak of COVID-19 in 2020, on-trade volume sales of RTDs declined by 28%, while off-trade sales also took a decline, compared to off-trade growth of 1% in 2019.
E-commerce helped to drive retail sales in 2020, minimising the number of shops frequented. The government supported this, as buying alcoholic drinks online was made legal in 2020, given the COVID-19 circumstances.
A few years ago, cocktails were not perceived as a high-quality product in Latvia, with dyes and various additives included in the recipes. Gradually, the quality of the cocktails has improved in the country, and recently, to maintain the position, innovation has been appearing on the landscape, boosting the appeal of RTDs.
Off-trade growth will continue to be challenged in 2021, as ongoing COVID-19 restrictions dampen sales of RTDs. As such, it will not be until 2023 when off-trade growth is predicted to recover, and this will be driven solely by wine-based RTDs as spirit-based RTDs suffer from the competition from spirits and cocktails in the on-trade.
Although RTDs is traditionally the category of choice for young adult consumers in Latvia, sales are expected to continue being challenged over the forecast period due to the shrinking population of the target age group. At the same time, borders between categories are blurring, and lighter beer and still and sparkling wine-based drinks are establishing themselves more strongly.
Leading international discounter Lidl is expected to open its first 10 stores in Latvia in 2021, and it is possible that the company will look to introduce new wine-based RTDs – which attract less excise – as part of its offer.
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This report originates from Passport, our RTDs research and analysis database.
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