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On the Rocks Cocktails

Delivered November 25th, 2019. Contributors: Arwen, Alexis Z., Godwin O., Invincible and

Early FindingsOn the Rocks Cocktails
Part
01
of five
Part
01

On the Rocks Cocktails

Some of the creatives that the On the Rocks Cocktails (OTR) Company has deployed in the past two years include images and videos in social media sites such as its Facebook account and YouTube channel. The official agency on record for company and any corresponding advertising channel used by any agency for OTR was not found.

On The Rocks Cocktails Creatives

  • On the Rocks Cocktails (OTR) offers its award-winning artisanal cocktails that are made with natural ingredients.
  • The company's messaging includes communicating to its customers that it aims to bring the bar to them.
  • On its Facebook page, one of the creatives posted by On The Rocks is an image of its "The Aviation" premium cocktail.
  • The creative image includes the pink product and a flower on a white backdrop.
  • On Instagram, the company has posted multiple creatives that feature several varieties of its cocktails.
  • One creative feature the "Old Fashioned" cocktail that features "#KnobCreek."
  • On its Twitter account, the company posted a creative image that shows several of its cocktail varieties such as The Mai Tai, The Margarita, The Aviation, The Old Fashioned, The Cosmopolitan and The Jalapeno Pineapple, Margarita cocktails.
  • The company also uploaded a creative video for its "The Aviation" cocktail product.
  • The company uses its social media accounts on Facebook, Instagram, Twitter, and YouTube to post its marketing creatives.

Agency on Record Helpful Information

  • On the Rocks cocktail products are served at several establishments such as the Four Seasons hotels, Hilton Hotels, the Hyatt, Marriott, and others.
  • The IMI Agency is focused on creating campaigns for beverage brands.
  • It develops campaigns for beverages that are being served at several establishments such as the Four Seasons hotels, Hilton Hotels, the Hyatt, Marriott, and others.
  • There might be a possibility that the IMI agency has campaigned for the OTR cocktail products on behalf of the establishments above that are serving OTR cocktails.

Research Strategy

To determine the agency of record that was used by the On the Rocks Cocktails company and the corresponding advertising channels used, we looked through the company's websites and press releases. We also looked through marketing sites and media publications. However, we were not able to find the official agency on record by the company and the corresponding advertising channels. What we found were the marketing campaigns that were posted by OTR on its websites and press releases.
We also looked for any acknowledgments or credits on the advertising creatives that OTR posted on its website, social media channels, blogs, and others. We hoped to find an agency on record that created the campaigns found. However, there were no indications on these creatives as to who created the campaigns and only the OTR company name was indicated.
We then looked for agencies that specialize in doing marketing campaigns for beverage brands such as The Food Group, Straight North, Powerbrands, IMI, and others. We also looked through the client lists of other agencies that handle all industries. We hope to determine if any of these agencies listed any beverage clients such as OTR Cocktails on their websites. Based on this approach, we were not able to find OTR in the client list of these agencies. What we found is that the IMI agency creates beverage campaigns for some of its clients where OTR cocktail products are being served. Based on this, we have presented the information that the IMI agency might have created some of the OTR cocktail brand campaigns for their clients. However, the details of the IMI agency campaigns for these establishments were not found.
We inferred that the reason why these pieces of information are not available could be due to the private nature of this information. Based on our quick look at several websites of private companies, the agency of record for their campaigns were also not available.
Part
02
of five
Part
02

On the Rocks Cocktails - Competitive Landscape 1

Mike's Hard Lemonade, Anheuser-Busch InBev, and Brown-Forman Corp are all leading players in the US alcoholic beverages market. They operate primarily in different market segments, with Mike's Hard focused on the flavored malt beverage segment, Anheuser-Busch InBev focused on the beer segment, and Brown-Forman Corp focused on the spirits segment, especially Whiskey and Bourbon. Below, the strengths, weaknesses, competitive advantage, growth opportunities and challenges for each company have been provided.

 Mike's Hard Lemonade 

Strengths
Weakness
Competitive Advantage
  • The competitive advantage of Mike's Hard Lemonade is their multitude of flavors (one dozen) and the large share of the US flavored malt beverage market that the company holds.
Challenges
  • Mike's Hard Lemonade is part of the beer category, which is a relatively flat market with little growth.
  • One challenge for Mike's Hard Lemonade has been attracting a broader consumer base.
Growth Opportunities
  • In 2016, the company launched a new product line — White Claw Hard Seltzers — in order to capitalize on the growth of the ready-to-drink hard seltzer market, which typically attracts a more health-conscious consumer than Mike's original hard lemonade products.
  • More recently, Mike's Hard also launched several ready-to-drink cocktails, like Cayman Jack, which have a higher alcohol concentration. These products were intended to "differentiate the category and reach multicultural consumers."

 Anheuser-Busch InBev  

Strengths
  • One strength of the company is the large market share of the US beer market that the company controls with their various brands, including premium brands like Stella Artois and mass-consumption brands like Budweiser and Bud Light.
  • An additional strength for the company is their diverse, global workforce of over 175,000 employees.
Weaknesses
  • One of the weaknesses of AB InBev is the lack of competitiveness in the area of innovation. 
  • Additionally, the company has lost market share to new niche entrants into the market.
Competitive Advantage
  • The competitive advantage of the company is their long history combined with their overall control of the worldwide beer market, owning eight out of ten of the "most valuable beer brands worldwide."
Challenges
  • One challenge for AB InBev is the flat, or even shrinking, US beer industry.
  • Another challenge for AB InBev is mitigating sustainability concerns, including water risk and the increasing risk to agriculture from climate change.
Growth Opportunity
  • One potential growth opportunity for AB In-Bev is with Above Premium products, which have been seeing rapid growth.
  • Another growth opportunity for AB In-Bev is global sales, especially in emerging markets, where the company is seeing the growing middle class in these developing countries increase their beer consumption, especially for affordable beers.

 Brown-Forman Corp 

Strengths
  • One strength of Brown-Forman is their brand recognition and strong brand loyalty, which is the result of their substantial advertising.
  • Additionally, the company already has a huge global distribution network, which allows it to quickly bring a new product to market — much faster than competitors could.
Weaknesses
  • Brown-Forman has been operating on outdated IT technology, especially for analytics and business decisions.
  • Brown-Forman operates in a highly-taxed market where taxes have seen continual growth. Currently, taxes account for over 20% of the company's sales.
Competitive Advantage
  • Brown-Forman's competitive advantage is that it is the largest US-based spirits company with a global reach.
Challenges
  • One potential challenge for Brown-Forman could be an end to the Whiskey fad, especially if it happens more rapidly than the market expects. This could be a great risk due to the length of time whiskey products take to age. If consumer preference suddenly shifts, Brown-Forman could struggle to sell the remaining product aging in its inventory.
  • Additionally, maintaining rapid growth in the sluggish spirits category is a challenge.
Growth Opportunities
  •  Overseas markets, like Mexico and Russia, are great growth opportunities for Brown-Forman.
  • There are also growth opportunities for Brown-Forman to capture even more market share, as the spirits market is still "highly fragmented." As such, Brown-Forman has the opportunity to capture more the market by introducing additional products in its brand portfolio.
  • Finally, Brown-Forman could benefit from the increasing interest of the American consumer for Bourbon and Whiskey.

Research Strategy

Company strengths, weaknesses, and competitive advantage were based on company provided information, as well as independent analysis. Company growth opportunities and potential challenges were based on independent analysis of the company position in the overall market.
Part
03
of five
Part
03

On the Rocks Cocktails - Competitive Landscape 2

Top brands, being first to market, and cocktails that are all natural and sweetened with cane sugar, are all strengths of Diageo PLC, Boston Beer Company and On the Rocks Cocktails, respectively.

Diageo PLC.

  • Diageo PLC's company website can be found here.

Strengths

Weaknesses

  • Diageo is not popular in brands of wine, and this affects their business in Europe and UK, where the demand for wine is higher than other types of alcohol.
  • Even though the company invests in research and development, their investment in R&D is below the fastest growing players in the industry.
  • The company prioritizes its better known products at the expense of its lesser known products.

Competitive Advantage

Challenges

  •  Fears about impact of alcohol abuse might lead to reduction of Diageo’s market.
  • The stringent regulatory framework many countries have surrounding the sale and consumption of alcohol has been a challenge to most players in this industry.

Growth Opportunities

  • There is potential for Diageo to expand into the UK wine market.
  • Diageo has an opportunity in the E-commerce industry as they could open online stores and have an additional revenue stream.
  • Red wine sales will likely continue to benefit from medical and scientific findings that indicate that it offers health benefits to drinkers. It will be a good opportunity for Diageo to lean into this.

Boston Beer Company

  • Boston Beer Company website can be found here.

Strengths

Weaknesses

  • Boston Beer competes in many areas apart from craft beer which could be stretching company resources and could result in the company sacrificing its vision when spreading attention across many areas.
  • Boston Beer's mission of “offering the highest quality product” is a huge part of Boston Beer’s success, so a significant change in the lead teams could lead to a collapse or lack of vision.

Competitive Advantage

Challenges

Growth Opportunities

On the Rocks Cocktails

  • On the Rocks Cocktails website can be found here.

Strengths

Weaknesses

Competitive Advantage

  • On the Rock Cocktails has a competitive advantage due to its use natural premium ingredients and only sweetened with cane sugar.
  • On the Rock Cocktails has a competitive advantage due to its creation of a new kind of ready-to-serve cocktail experience.

Challenges

  • Getting distribution rights in more locations may serve as a challenge considering the many liquor laws that there are.
  • Focus on building their brand awareness and continuing the company’s expansion may lead to the company not providing more brand SKU's in the immediate future.

Growth Opportunities

Part
04
of five
Part
04

RTD Market - Market Size

The market size of the ready to drink (RTD) cocktail market in the United States is estimated to be at $3,630.3 million in 2018. Below are the explicit findings and detailed methodology.

Ready to Drink (RDT) Market in the USA

  • The market size of the ready to drink (RTD) cocktail market in the United States was $3,630.3 million in 2018. [Calculated]
  • The ready-to-drink or RTD cocktail segment is also known as the alcoholic RTD beverage market; it consists of multiple sub-categories, including the spirit-based, malt-based, or wine-based alcoholic drinks, and high-strength premixes.
  • This category of drinks is served in a premixed form and is ready for consumption at any time. These beverages contain alcohol and juice or any other soft drinks. Both the ingredients are mixed according to a specific proportion.

Other Findings

  • The alcoholic ready-to-drink and high strength premixes market is majorly dominated by players like Anheuser-Busch InBev, Bacardi Limited, Brown-Forman, and Boston Beer Company.
  • The spirit and wine-based RTD cocktails are usually available in smaller sized packages but can generate larger sales of $62 million and $83 million, respectively, annually. The malt-based cocktails account for $4.7 million in annual sales.

Research Strategy:

Since there has been no precompiled data on the US market size of RTD cocktails, we had to get creative to deduce its market size. The section below details out the overall approach, the strategy deployed behind triangulation, and the calculations involved in search of the RDT market in the USA.

Overall Approach

An initial deep dive into various resources depicted a scarcity of precompiled information on the topic. Thus, we started by understanding the industry as a whole. Here, we got insights into the core definition and the major players dominating the industry.

To look for the US RDT market statistics, we tried various approaches, which we reverted to successfully triangulating the information. We started by scanning through statistical and market research sites like Markets and Markets, Nielsen, among others. However, these sources could not yield relevant information about the RDT market size in the USA, instead, they provide details on the general alcohol industry in the USA. Next, we looked into sites like BCG, among others, which are the major consulting firms, and they publish the strategic market reports. The idea here was to check any mention of the RDT market size figure(s) in their published reports. However, none of these sites have information on the USA RTD segment. Further, we looked into leading beverages forums like Sane, WSWA Convention, among others, to see if they have quoted any hard data on the RDT market in the USA. Unfortunately, this strategy failed to cite any relevant information to help in answering the research criteria. Also, we went through the leading market players, as stated by the Ink Wood Research website, to check their annual sales figures. The idea here was to deduce an average of their sales numbers (figures) and use it (the average) as a proxy to answer the research question. However, due to the private nature of their businesses, the sales figures for these companies could not be deduced to acceptable accuracy.

We finally triangulated the answer by calculating the percentage share of the US alcoholic beverages against the North American market of alcoholic beverages. We used the same percentage to decipher the RTD cocktail market share of the US within the North American region with an assumption that the percentage share would be comparative since it belongs to the same industry.

Calculations and Triangulation

The RTD cocktail US market size was triangulated using the % share of the US alcoholic beverages market within North America. According to the Market Watch website, in 2018, the market size of North American alcoholic beverages was $397 billion. As per Statista, in 2019, the market size of the US alcoholic beverages is $250 billion, up from $230 billion in 2015.

Assuming a linear growth in 4 years from 2015 to 2019, we understand that there was a $(250-230) billion = $20 billion rise in the US alcoholic beverages market size. Thus, the market grew by 20/4 = $5 billion per year, from 2015-2019. Using this calculation, we can imply that the US market size for alcoholic beverages was 250-5 = $245 billion in 2018. We deduced the 2018 figure here to measure the share against a 2018 market size of the North American market.

Thus, from the above two points, we can deduce the % share of the US market within the North American region, which is 245/397*100 = 61.7%.

Additionally, according to the Business Wire website, in 2018, the North America RTD alcoholic beverages market size was $5,883.8 million in 2018. Using the % (61.7%) from above, the 2018 US RTD alcoholic beverages market size was 61.7/100*5883.8 = $3630.3 million.
Part
05
of five
Part
05

RTD Market - CAGR

The compound annual growth rate (CAGR) of the ready-to-drink (RTD) market in the United States is expected to be 5.4% during the forecast period 2019-2027 while the global market will see a CAGR of 3.32% during the same period.

Ready-to-Drink Market

  • The ready-to-drink (RTD) cocktail segment is also known as the alcoholic RTD beverage or the alcopops market and primarily consists of spirit-based, malt-based or wine-based alcoholic drinks, and high-strength premixes. This category of drinks is served in a premixed form and is ready for consumption at any time. These beverages contain alcohol and juice or other soft drinks that are mixed according to specific proportions.
  • The CAGR of the ready-to-drink market in the United States is expected to be 5.4% during the forecast period 2019-2027 while the global market will see a CAGR of 3.32% during the same period.

Other Findings

  • The alcoholic ready-to-drink (RTDs) and high-strength premixes market is dominated by players like Anheuser-Busch InBev, Diageo Inc, Bacardi Limited, Brown-Forman, and the Boston Beer Company.
  • The malt-based RTD cocktail will see major growth as it has an exponential growth rate of 574%. This growth rate is directly attributed to new product launches and increasing marketing and advertising campaigns by the leading companies in the market.
  • The RTD wine-based and spirit-based drinks have a sales growth of 40% each.

Research Strategy

The research was initiated by first understanding the concept of RTD cocktails. Thus, multiple research-based sites were scanned and we found RTD cocktails to be defined as a cocktail with any proportion of alcohol mixed with a base (like juice or soft drink). Next, we searched for statistics on the overall growth of the industry globally and regionally. Though U.S. specific figures were not mentioned in any report, we were able to assess the CAGR based on the fact that the U.S. is a major contributor to sales and growth for the segment in North America. We were able to find the CAGR in a survey-based report on North America. Here we assumed that the CAGR for North America would be the same as that of the U.S. because statistics indicated that the U.S. was a major contributor sales growth in the region. This information was corroborated by multiple credible sources.

In spite of the above, we looked into strategic marketing reports published by major consulting firms (like McKinsey, BCG, Deloitte, among others). In these reports, we searched for growth figures. We further searched on leading beverages forums (like SANE, WSWA Convention, Bevindustry, among others) for growth statistics. Both strategies failed to cite figures for the U.S. We also looked at the leading market players (stated above) to check their growth rates. The idea was to deduce the average growth rate from their growth for the overall market in the U.S. However, due to the private nature of their businesses, the growth for all companies could not be accurately deduced.

The CAGR presented here was cross-checked with the global CAGR of 3.32%, which led us to accept that our hypothesis is accurate for the U.S. market.
Sources
Sources
From Part 01

About Us - On The Rocks

ontherockscocktails.com

OTR: On the Rocks Premium Cocktails

facebook.com
Publication Year: 2019

OTR: On the Rocks Cocktails on Instagram

instagram.com
Publication Year: 2019

OTR Cocktails on Twitter

twitter.com
Publication Year: 2019

On The Rock Premium Cocktails Promo 15 Sec

youtube.com
Publication Year: 2018

IMI Agency

imiagency.com
Publication Year: 2019

Beverage Marketing Companies - Power Brands

powerbrands.us
Publication Year: 2019

Home - The Food Group

thefoodgroup.com

Food and Beverage Marketing Agency

straightnorth.com
Publication Year: 2017
From Part 02

Drink on the Bright Side | Mike’s Hard

mikeshard.com

America’s Fastest-Growing Beer Brand, Mike’s Hard Lemonade, To Refocus On 25-29 Year Old Males

forbes.com
Publication Year: 2017

Mike’s Hard Lemonade accelerates growth

bevindustry.com
Publication Year: 2018
s

Mike's Hard Marketing Analysis

static1.squarespace.com

Campaign Trail: How Mike’s Hard Lemonade squeezes out ‘brighter times’ for millennial men

marketingdive.com
Publication Year: 2019

Home - Brown-Forman

brown-forman.com

Brown-Forman Corporation (BF.B)

simplysafedividends.com
Publication Year: 2018

Brown-Forman CIO Looks to Data for Smarter Booze

wsj.com
Publication Year: 2019

AB InBev CEO cites shrinking US beer industry, international issues for Q3 drop

spglobal.com
Publication Year: 2018

Home

ab-inbev.com
Publication Year: 2019
a

AB InBev annual report

ab-inbev.com
Publication Year: 2019

Anheuser-Busch InBev SA/NV [SWOT Analysis] Weighted SWOT Matrix

fernfortuniversity.com
From Part 03

Diageo PLC Website

diageo.com
Publication Year: 2019

SWOT analysis of Diageo - Diageo SWOT analysis

marketing91.com
Publication Year: 2018

Diageo Plc SWOT Analysis / SWOT Matrix

essay48.com
Publication Year: 2018

SWOT Analysis : Diageo PLC

digi-chain.wixsite.com
Publication Year: 2018

Our business Diageo

diageo.com

Overview | The Boston Beer Company - IR Site

bostonbeer.com
Publication Year: 2019
d

Boston Beer Company Analysis

digitalcommons.unl.edu
Publication Year: 2019

Boston Beer Company Inc The SWOT Analysis / SWOT Matrix

essay48.com

Homepage - On The Rocks

ontherockscocktails.com
Publication Year: 2019

The Drinks - On The Rocks

ontherockscocktails.com
Publication Year: 2019

Review: On the Rocks Premium Cocktails • Cigars and Leisure

cigarsandleisure.com
Publication Year: 2019

FIND US - On The Rocks

ontherockscocktails.com
Publication Year: 2019

How On The Rocks Cocktails Came to Be - D Magazine

dmagazine.com
Publication Year: 2019
From Part 04

North America RTD Alcoholic Beverages Market by Base Type, Packaging Type, Distribution Channel, and Country - Forecast to 2027 - ResearchAndMarkets.com

businesswire.com
Publication Year: 2019
Quotes
  • "The North America RTD alcoholic beverages market is accounted to US$ 5,883.8 Mn in 2018 and is expected to grow at a CAGR of 5.4% during the forecast period 2019-2027, to account to US$ 9,402.3 Mn by 2027."
  • "North America RTD alcoholic beverages market is dominated by the US, followed by Canada. The consumption of alcohol beverages and premixed is subjected to various regulations formed by the government."

Alcoholic Ready-to-drink (Rtds)/ High Strength Premixes Market 2019-2027

inkwoodresearch.com
Publication Year: 2017
Quotes
  • "Alcoholic Ready-to-drink (RTDs) beverages are primarily spirit-based, malt-based or wine-based alcoholic drinks. These drinks are served in a premixed form and are ready for consumption at any time. These ready-to-drink (RTDs) are also known as alcopops. On the other hand, high-strength premixes are the pre-mixed beverages with alcohol. These beverages contain alcohol and juice or any other soft drinks. Both the ingredients are mixed according to a specific proportion."
  • "The global alcoholic ready-to-drink (RTDs) & high strength premixes market is estimated to grow at a CAGR of 3.32% over the forecast period of 2019-2027. The alcoholic ready-to-drink (RTDs) and high strength premixes market is majorly dominated by players like Anheuser-Busch InBev, Diageo Inc, Bacardi Limited, Brown-Forman and Boston Beer Company"

How Newer Ready-to-Drink Beverages and Packages are Shaking Up the Adult Beverage Market

nielsen.com
Publication Year: 2019
Quotes
  • "Spirit- and wine-based “ready to drink cocktails” are generally available in smaller size packages; they’re also more established and generate larger sales ($62 million and $83 million in annual sales, respectively)"
  • "In fact, the ready-to-drink space is boosting sales across all alcohol beverage categories, with the emerging malt-based cocktail segment leading the pack in growth. Annual sales in this segment are up 574%, and malt-based cocktails now account for $4.7 million in annual sales."

U.S. alcohol industry market size 2015-2020 | Statista

statista.com
Publication Year: 2019
Quotes
  • "The market value of alcoholic drinks in the United States has steadily increased in recent years. In 2015, the industry was valued at approximately 230 billion U.S. dollars. By 2019, this had increased by slightly more than 13 percent to 250 billion U.S. dollars. This is expected to increase further by 2020."

The North America Alcoholic Beverages Market valued at $397 billion in 2018 and is projected to grow at a CAGR of 4.7% over the forecast period 2019-2025.

marketwatch.com
Publication Year: 2019
Quotes
  • "The North America Alcoholic Beverages market valued at $397 billion in 2018 and is projected to grow at a CAGR of 4.7% over the forecast period 2019-2025."
From Part 05

Alcoholic Ready-to-drink (Rtds)/ High Strength Premixes Market 2019-2027

inkwoodresearch.com
Publication Year: 2017
Quotes
  • "Alcoholic Ready-to-drink (RTDs) beverages are primarily spirit-based, malt-based or wine-based alcoholic drinks. These drinks are served in a premixed form and are ready for consumption at any time. These ready-to-drink (RTDs) are also known as alcopops. On the other hand, high-strength premixes are the pre-mixed beverages with alcohol. These beverages contain alcohol and juice or any other soft drinks. Both the ingredients are mixed according to a specific proportion."
  • "In the alcoholic ready-to-drink (RTDs)/high strength premixes market, some well-established players are already dominating the market, which include; Anheuser-Busch InBev, Diageo Inc, Bacardi Limited, Brown-Forman, Boston Beer Company,"
  • "Emerging economies to offer lucrative growth opportunity for the alcoholic ready-to-drink (RTDs)/high strength premixes manufacturers to expand their operations. Spirit-based RTDs and Wine-based RTDs are more popular compared to other product categories. Furthermore, these two product categories are expected to show the sturdiest growth in the coming years. One of the factors driving the growth of the market are new product launches and increasing marketing and advertising campaigns by the companies. Another key trend of the market is the introduction of new & ethnic flavors by the players to cater the changing demands of consumers."
  • "The global alcoholic ready-to-drink (RTDs) & high strength premixes market is estimated to grow at a CAGR of 3.32% over the forecast period of 2019-2027."

How Newer Ready-to-Drink Beverages and Packages are Shaking Up the Adult Beverage Market

nielsen.com
Publication Year: 2019
Quotes
  • "In fact, the ready-to-drink space is boosting sales across all alcohol beverage categories, with the emerging malt-based cocktail segment leading the pack in growth. Annual sales in this segment are up 574%, and malt-based cocktails now account for $4.7 million in annual sales."
  • "Spirit- and wine-based “ready to drink cocktails” are generally available in smaller size packages; they’re also more established and generate larger sales ($62 million and $83 million in annual sales, respectively)"

North America RTD Alcoholic Beverages Market by Base Type, Packaging Type, Distribution Channel, and Country - Forecast to 2027 - ResearchAndMarkets.com

businesswire.com
Publication Year: 2019
Quotes
  • "The North America RTD alcoholic beverages market is accounted to US$ 5,883.8 Mn in 2018 and is expected to grow at a CAGR of 5.4% during the forecast period 2019-2027, to account to US$ 9,402.3 Mn by 2027"
  • "North America RTD alcoholic beverages market is dominated by the US, followed by Canada. The growing preference for RTD cocktails by millennial in developed countries like the US and Canada and the easy availability of these products in the market is driving the growth of the RTD alcoholic beverages market in North America."

Sales growth of ready-to-drink-alcoholU.S. 2019 | Statista

statista.com
Publication Year: 2019

US_RTD Cocktails.jpeg

drive.google.com
Publication Year: 2019