Americans today crave convenience. And in the spirits category, what can be more convenient than Ready to Drink (RTD) cocktails and shots?
These products contain fresh, premium ingredients, often in small, sealed, one-serving containers. RTDs come in all shapes of packaging, including cans, bottles, shot glasses and plastic balls. They’re made for the busy, on-the-go consumer. Whether someone is camping, tailgating, at a barbecue, hosting a party, preparing for a night out, or just too tired to whip up a cocktail after work, RTDs offer a convenient alternative to the time-consuming, labor-intensive mixing of beverages.
“As long as Americans continue to be Americans, with their time becoming more valuable and less available, RTDs are going to see huge growth,” says Sandra Pacheco, national sales director for Southwest Wines, which produces a ready-to-drink mimosa line.
RTDs on the Rise
Although RTDs have been available for decades, some have been available mostly regionally or overseas. Producing mixed shots with a female focus, Twisted Shotz has operated for 20 years in New Zealand and Australia, where comparatively lower taxes on RTDs drive consumer demand.
In the U.S., the RTD market has picked up considerably within the past five or so years after a period of stagnation. New brands are launching original, diverse entries into this growing category. Customers can now choose from a bevy of options when they want a convenient cocktail.
“Making shots is difficult,” says Harley Bauer, who in 2013 co-founded LIQS, maker of premium RTD shots. “Most people don’t know the correct proportions for shots. And you need a shaker. We were thinking, ‘There’s got to be an easier way to make shots’. And we saw the potential for making something like that.”
Many RTD companies were born from their founders wanting to merge quality with portability.
“I was drinking cocktails by the pool, grading papers, when I thought ‘I shouldn’t have this glass by the pool’,” says teacher-turned-entrepreneur Merrilee Kick, who first conceived of her product BuzzBalls in 2008. “So I brought the glass inside and then I thought, ‘Wouldn’t it be cool to have a little round bottle ball with a cocktail inside?’”
Following the Low-Cal Trend
The brainchild for the RTD line Crafted Cocktails occurred in 2013, when founder Felicia Vieira, “noticed that something was missing. I’m a frequent traveler for business and I was going to a lot of metropolitan areas. I was finding great cocktails that were full of flavors and low in calories. But nothing of the like was available as RTD. There were mixes, and there were some RTDs, but nothing like what you’d get if you ordered a cocktail at a bar or restaurant. These RTDs would be low in calories, but would contain artificial sweeteners. Or they’d have real flavors, but also a lot of alcohol and calories.”
Vieira’s inability to find products with natural flavors and low calories speaks to a negative perception that continues to nag RTDs.
“There can be this stigma of people thinking, ‘if I’m buying something off the shelf at a grocery store, then it must be fake’,” she says.
This stigma lingers in the RTD market due to a history of inexpensive products – some consumers aren’t aware of the recent rise in higher-quality alternatives.
The question of whether RTDs are “low-shelf” is “why I ended up getting involved in this business in the first place,” Bauer says. “We’ve gotten so used to these RTD brands over the last 20 years that are very low proof, all artificial flavoring, loaded with sugar and carbs. That is why RTDs can have a bad rep.”
It is essential, therefore, for the new generation of RTD-makers to promote the natural ingredients and premium quality of their products.
“We take a lot of pride in what we put into our drinks,” Kick says. “This is not Gatorade spiked with vodka. Believe me, to do something like that would be a heck of a lot cheaper. But it was important for me to make these products like I would make a cocktail at home — with real juice. We try to make them as natural as possible. They’re almost all 100% natural. We also have kosher certification.”
Rob Boyer, director of marketing for the coconut water/vodka drink VO|CO (which launched to market in 2014), echoes Kick. “If you’re not using the best stuff that you can find, then it’s going to come through on the palate of the consumer,” he says. “We think of it in terms of what the customer is looking for, and that’s products that are high quality and natural.”
“I think the stigma towards RTDs is going away,” Boyer adds. “There is this wave of interest in the RTD category. Once you see our product and know the quality of our ingredients, there’s an interest level to at least check out the product.”
Marketing to Millennials
Freshness and quality have both been critical to the lasting success of Twisted Shotz. “It’s all in the flavor,” says Peter Heyworth, VP of marketing for Independent Distillers, makers of Twisted Shotz and the new, male-focused RTD line Double Barrel Shots. “We’re experts in cream-based products. Cream is very difficult to package and keep fresh. We have a process — using New Zealand milk, which is very fresh — of maintaining the freshness right through to the consumer.”
Another reason why natural ingredients are imperative is because Millennials are especially keen to the legitimacy of product quality. “They’re the Whole Foods generation,” Bauer says. “They’re savvier about authenticity and nutrition.”
Among Millennials, the appeal of RTDs is strong. They fit into a Millennial’s active, diverse, pleasure-seeking lifestyle. And RTD-makers advertise and brand accordingly.
“Our colors and funny names are important marketing strategies,” says Kick, of BuzzBalls. “You can mix and match them. The colors are bright and vivid. The colors of the balls match the colors of the cocktails inside.”
The brand is unveiling a new marketing campaign this year. “It’s called The Party Counselor,” Kick says. “Basically, he’s this handlebar-mustache-wearing, country-boy-looking Texas guy who goes around fixing people’s bad parties.”
Ease of pleasure is a common theme in RTD strategies. “At their core, these were created for people throwing parties,” Bauer says. “LIQs can live in coolers, fridges, or be out by the pool. You can grab one, hand them out to friends, and keep the party going.”
A sense of youthful irreverence and experimentation is also prevalent within RTD marketing. With names like Buttery Nipple and Skull Crusher, Twisted Shotz and Double Barrel stand out from more traditional drinks. “I think part of the recent rise in RTDs is people’s openness to new flavors, and being irreverent with spirits,” Heyworth says. “People like having a little bit of fun. They’re not hung up on Old-World myths about how you’re supposed to drink spirits.”
Twisted Shotz are diverse in flavor and relatively low in ABV. This plays naturally into the sort of fun, shared experience popular among Millennials. “They’re a bit like a box of chocolate in our mix pack,” Heyworth says. “You can compare who’s had what and what they think about them. That’s how women shoot. They say, ‘This shot was delicious. You want to try one?’”
Social media remains an effective strategy for connecting with Millennials, partly because it appears indirect. “We try to be organic with our marketing, so that it feels like they’re discovering it on their own terms,” Vieira says. “Of course, with Millennials, you have to be on Instagram.”
Bauer agrees: “Millennials don’t want marketing that tries to convince them that something is healthy. They want to be talked to straight. That’s why we don’t try to force our products down anyone’s throats. We really want people to come across our products organically. We just try to fit in.”
To boost the online presence of LIQs, Bauer buys localized ads on social media. “We do a lot of geo-targeting,” he says. “We will find a cluster of stores that all sell our products, and then we use that zip code for our Facebook advertising. That way, we can cater directly to our demographic. We will let them know what stores are doing tastings or having sales. It also drives sales at the stores themselves, which creates a nice win-win scenario.”
The connection factor is key on social media. “We try to engage with the customers and have them join into the conversation about our product,” says Bauer, of VO|CO. “We hashtag (#) the product, and obviously we want customers to do so as well. You can create a one-on-one conversation that way. That’s really important for us, because we’re new to market, and that’s how we can connect with customers over some of the bigger brands.”
More than Just Millennials
Millennials are not alone in enjoying RTDs. Surprising even the brands, these products have found a broad appeal across generations. “We figured our target-consumer sweet spot would 27 years old,” Heyworth says. “And that was not at all true.” As many brands have discovered, there is a major market for RTDs among Baby Boomers.
Crafted Cocktails have received similar reactions among non-Millennials. “We’re hot with the moms who like to entertain, the 30-50 age group,” Vieira says. “They like Crafted cocktails because it’s something unique you can bring to a party. And the packaging looks classy. Martha Stewart quoted our brand as being a great hostess gift.”
Bauer, too, has witnessed strong Baby Boomer interest in LIQs. “We were shocked to see that, at a lot of our tastings, the products were very popular among people in their 30s, 40s, even 50s,” he recalls. “Of course, we’re thrilled to see that. It means that we’ve created a good product. These people could be someone who wants to host a party with ease, and doesn’t want to be stuck making cocktails for their guests all night long.”
The Container Conundrum
Getting to the point where a new RTD enters the consumer consciousness entails a great deal of work. Producing RTDs is a difficult business from the onset. An industry still in its infancy, it requires extensive R&D and innovation prior to progress. The greatest struggle for many RTD companies is finding an effective drink-container design.
BuzzBall cocktails are sold in plastic, orange-sized balls. “We actually invented the first plastic cocktail can in the United States. I got the idea from a tennis ball can,” Kick says. “The lid posed problems. At first, I imagined a peel-away lid, like for yogurt containers. But you have to have something that can hold in a carbonated cocktail. So I looked into how coke cans held in carbonation, what parts per million worked to keep the beverage inside.”
That’s how Kick came up with the metal top, which is hot-sealed to the top of the plastic can.
Working with natural ingredients can also present obstacles — or so Crafted Cocktails discovered.
“We use a glass bottle and have to hot fill it above 190 degrees in order to fill it without preservatives,” Vieira explains. “There’s no way to hot fill a plastic bottle. That means that anything in a plastic bottle has preservatives in it.”
For its natural watermelon ingredients, Crafted Cocktails will dehydrate watermelon into a powder, and then rehydrate it during the hot-fill manufacturing process.
Bauer and his LIQs business partner faced a different problem. They could not find an American distillery that owned equipment necessary to fill and seal their shot glasses. Eventually, they located a machine that filled foodstuff, and spent $50,000 outfitting it to suit their needs.
“And then we had to find a company that could label our shot glasses,” Bauer says. “Our glasses are not perfectly round, like shampoo or soft-drink bottles. They’re shot glasses, so they’re angular. We probably went through 20 labeling companies. It would have been a lot easier to create another vodka brand – everything for LIQs had to be made custom.”