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In the three months to the end of June, 17% of visitors to the on-premise in the US consumed an RTD. Who are these consumers and what motivates their purchases? CGA‘s client solutions director for the Americas, Andrew Hummel, analyses the latest data.
Across the US on-premise, ready-to-drink is retaining its position as a popular and successful beverage alcohol segment, according to data from CGA’s ‘OPUS’ research tool, which provides insights into consumer segmentation.
The demographic is rather young – only 16% are aged over 55 – and slightly wealthier than other population segments, with an annual household income of US$83,000 compared to the average wage of $53,490. Consumption isn’t particularly gender-specific, as figures show that RTDs are just slightly more attractive to females [52%] than to males [48%].
Typically, RTDs are associated with the off-premise, but the on-premise sector serves as a critical avenue for adventurous consumers to engage with the category. CGA’s research shows that 17% of US bar, pub and restaurant visitors have consumed RTD alcohol in the channel in the past three months.
Figures collected over the last two years suggest that RTD consumption is consistent across the seasons. Between autumn 2021 and the following spring, RTD consumption sat stable at 18% of all on-premise users. The level experienced a slight drop of two percentage points in autumn 2022, only to increase to 17% in spring the following year.
A significant majority [75%] of US RTD consumers dine out at least once a week, while almost half visit on-premise venues primarily to consume alcohol. Of this cohort, 40% are ‘likely’ to consume a new RTD in both food and drink-led scenarios, while the remaining 60% is evenly divided between those who prefer RTDs while eating out or exclusively drinking out.
US consumers engage with RTDs in a range of different occasions. In more informal settings, 48% engage with the segment as they catch up with friends, while over a third select them as a means to unwind. Around a quarter enjoy RTDs while watching sports, as a regular everyday beverage or during after-work drinks. That said, RTDs are also a popular choice for more formal occasions, with 37% of drinkers choosing the category during celebrations and 25% on romantic occasions.
Convenience and value-for-money driving sales
RTD consumption is largely driven by convenience: more than one-third of purchasers select the segment based on what they perceive to be a good value-for-money proposition, while 25% look for special offers and discounts. Over a quarter trust friends’ recommendations, but fewer – one in five – rely on the bar staff or the menu for RTD advice.
When it comes to selections within RTDs, consumers are primarily motivated by the variety of flavours on offer [28%], reiterating the importance of having a diverse range available to satisfy all preferences. Health considerations, on the other hand, don’t appear to play a key role in consumer decision-making. While 20% of purchasers ‘may’ look at the ABV level of RTDs, only a minority is concerned with calories.
Approximately 20% of the segment’s consumers place a premium on brand recognition, with nearly as many always choosing their favourite brand. This consumer preference is reflected in brand loyalty figures, which CGA’s research suggests has remained relatively stable over the last two years. However, ‘OPUS’ data also indicates that 18% of consumers are actively seeking out new RTD brands, and a smaller section could be tempted by increasing product visibility on the bar or in fridges – some RTD drinkers, then, are still keen to try new brands.
When promoting unfamiliar brands, operators need to consider the 56% of RTD drinkers for whom quality is paramount.
Having an extensive range of flavours is also important – 48% say they look for a variety of expressions, so there are plenty of innovation opportunities for brand owners within the segment.
Spirits-based RTDs – Vodka most popular white base; whisky/whiskey and rum lead brown
The packaging of RTDs carries appeal to around a quarter of consumers, but a higher proportion [about one-third] choose products based on the beverage’s type of base alcohol – malt, sugar, wine or spirits.
Among white spirits, vodka is by far the most popular [70%], while Tequila’s popularity – the spirit is selected by over half of RTD drinkers – aligns with wider consumer trends in the country. Rum is a very popular base alcohol, selected by 42% of RTD drinkers, while gin is the least appealing white spirits base [30%]. Meanwhile, whisky/whiskey [43%] is almost twice as desirable as brandy and Cognac [23%].
CGA’s research subdivides the segment into two distinct types: premix cocktails, such as Margaritas, Mojitos or Manhattans, and packaged highballs – for example, Vodka & Soda or Gin & Tonic. The research finds that premix cocktails are the more favoured option, with 53% of on-premise RTD consumers preferring them, while packaged highballs appeal to 41% of respondents.
Consumers in the country’s on-premise, therefore, appear to be seeking out more complex serves when engaging with RTDs.
Insights from CGA’s OPUS research can assist manufacturers, suppliers and operators to effectively target the relevant audience and fully harness the RTD category’s potential across the US on-premise. The data helps answer category, channel, occasion and brand questions to optimise sales and marketing strategies. Meanwhile, BeverageTrak data combines powerful datasets to provide an ultra-granular view of how drinks categories are being ordered and distributed across the US.
To learn more about CGA’s capabilities, visit www.cgastrategy.com or email [email protected].
This article has been available to Global Drinks Intel subscribers since June. For details on how to join them, please click here.
