RTDs' overall performance in terms of total volume and on-trade value sales was very poor in 2020 due to the fact that a high proportion of these products are usually sold through the on-trade channel. While there was some channel shift in favour of off-trade sales during lockdown, this did not mitigate the overall decline.
Diageo Suisse SA maintained its leadership of RTDs in 2020 with its brand Smirnoff Ice, which remained the most popular brand in the category, despite the declining popularity of spirit-based RTDs and some loss of share. Although RTDs has generally experienced a decline due to high prices and lifestyle changes, demand for Smirnoff Ice has remained stable in recent due to its global reputation and as vodka mixes continued to be popular.
Since Switzerland increased the tax on RTDs in 2004, the subcategory has continued to suffer from a relatively poor image, resulting in an ongoing decline in demand through both on-trade and off-trade channels. This trend has been accelerated by the ongoing health and wellness trend, which has seen young consumers in particular (who were traditionally the target demographic for these products due to their sweeter flavour and convenience factor, being pre-mixed) are becoming increasingly aware of the negative effects of consuming alcohol and artificial ingredients.
In order to maintain growth in the coming years, manufacturers will seek to differentiate through innovation, particularly in spirit-based RTDs. Varieties that are lighter in sugar or are wine- rather than spirit-based are likely to emerge in line with the ongoing health and wellness trend in Switzerland that has been accelerated in the week of the COVID 19 pandemic.
A return to socialising outside of the home environment is set to result in short-term double-digit volume growth for RTDs in 2021 through the on-trade channel, although the growth rate will dwindle thereafter. Demand is also likely to be boosted by a return to certain events such as festivals that tend to drive demand for RTDs.
Home-made and freshly-prepared cocktails using original or craft spirits mixed with juice will continue to pose strong competition to RTDs through the on-trade channel in the future. As consumers seek lighter drinks that are neither too high on sugar nor on alcohol, it will become increasingly difficult for spirit-based RTDs to attract new consumer groups.
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This report originates from Passport, our RTDs research and analysis database.
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