RTD Category Analysis

Part
01
of six
Part
01

RTD Alcohol Beverage Market

The RTD category of the alcohol beverage market in the US in 2020 is estimated to be $3.9 billion with an annual growth rate of 5.4%. While no preexisting data for this market exist, we were able to triangulate an estimate based on available data for North American market. The market segment is experiencing rapid growth due to factors arising from consumer demand. Key players are moved to innovate their production in response to the growth trend.

Size and Growth Rate of the RTD category

  • The market size of the RTD category in the US in 2020 is calculated to be $3.9 billion.
  • CAGR of the RTD category is predicted to be 5.4%.

Key findings

Research Strategy

The market size for the RTD segment was not readily available from publicly available resources, so we used past data and CAGR to triangulate the market size for 2020. We used the data available for North America, including the RTD market size and total alcoholic beverage market size. This data was used to triangulate the share of RTD in total alcoholic beverage market in 2020.

We then assume that the share of RTD in total alcoholic beverage market in the US is proportional to the share of RTD to alcoholic beverage market in North America. This is done as US is the largest share of the North American alcoholic beverage market, constituting 59% of the market. This can be found by dividing the US total alcoholic beverage market size by its North American counterpart:
$259,148,000,000 / $435,194,973,000 = 59%

According to MarketWatch, the North American market size for the RTD segment in 2018 was US$ 5,883.8 million with a CAGR of 5.4% during 2019 – 2027. We used a CAGR calculator the 2018 market size by CAGR for 2 time periods to arrive at our result.

2018 Market Size: RTD segment of Alcoholic Beverage Market = $5,883.8 M; CAGR of 5.4%
    $5,883,800,000*(5.4%)*(2 years) = $6,536,407,560

Since the US market share is 59% of the North American market, the RTD segment in the US can be found as follows:
$6,536,407,560 * 59% = $3,856,480,460.4 or $3.9 billion.

To arrive at a CAGR number, we assume that the trends describing the RTD segment in North America are similar to the RTD segment in the US. Therefore, we predict that the growth rate of RTD segment would closely resemble the 5.4% CAGR we see in North America.
Part
02
of six
Part
02

RTD Category - Brand Leaders

The brand leaders in the RTD alcoholic beverage category include Jack Daniel's, Smirnoff, White Claw, Mike's Hard Lemonade, and Bud Light Seltzer. The required information for all eight brands has been presented below.

1. Jack Daniel's Ready to Drinks

  • Jack Daniel's RTD alcoholic beverages are manufactured by the Brown-Forman Corporation. It is one of the largest US-based companies in the liquor business.
  • The Brown-Forman Corporation manufactures RTD alcoholic beverages called Jack Daniel's & Cola and Jack Daniel's & Ginger. These RTD drinks are manufactured under the brand name — Jack Daniel's Ready to Drinks.
  • Jack Daniel's & Cola is a mix of JD's Tennessee whiskey and the cola flavor. Similarly, Jack Daniel's & Ginger is a mix of JD's Tennessee whiskey and ginger.
  • According to the annual report of the Brown-Forman Corporation, more than 1.2 million cases of Jack Daniel's Ready to Drinks were sold in the US in 2019. Therefore, they consider themselves a leader in the market.
  • Similarly, The Spirit Business has placed Jack Daniel's & Cola in second place on the list of the best-selling RTD brands.

2. Diageo's Smirnoff

  • Diageo manufactures its RTD drinks under the brand name of Smirnoff. There are many RTD drinks sold under this brand name.
  • Smirnoff Ice, Smirnoff Seltzer, and Smirnoff Sourced are some drinks manufactured by Smirnoff. These drinks are sold in multiple flavors.
  • The net sales of the RTD category of Diageo increased by 24% in 2019 due to "the popularity of Smirnoff Spiked Seltzer and Smirnoff Ice." The popularity of RTD drinks boosted the net sales of the company in the US by 13%.
  • Multiple reports on the US RTD alcoholic beverage industry, including reports on IBIS World and Euro Monitor, cite Diageo as one of the key brand leaders in the RTD alcoholic beverage category in the US.

3. White Claw

  • White Claw is an RTD alcoholic beverage brand owned by a company called the Mark Anthony Brands. White Claw Hard Seltzer is one of the most popular RTD alcohol beverages in the US.
  • White Claw Hard Seltzer contains 2 grams of carbs, 5% of alcohol, and 100 calories, and the drink is available in eight different fruit flavors.
  • According to an article on Forbes, the RTD category in the US saw a growth of 50% in 2019. One of the major drivers of the growth included the popularity of hard seltzers like White Claw in the US.
  • White Claw was also listed as a key player in the US RTD alcoholic beverage market in a report on Mintel due to a 53% market share.
  • According to an article on Statista, White Claw's sales increased from $154.8 million in 2018 to $627.2 million in 2019.

4. Mike's Hard Lemonade

  • Mike's Hard Lemonade is one of the most popular ready-to-drink alcoholic beverage brands in the US. The brand offers 15 different flavors created using fruit juice and lemon.
  • This US-based brand is also owned by a company called the Mark Anthony Brands.
  • Mike's Hard Lemonade achieved a growth level of 20% in 2018. In the same year, the brand was able to sell around 2 million barrels of the flavored malt RTD beverage.
  • Multiple reports, including reports on IBIS World and Market Watch, cite the brand as one of the key brand leaders in the RTD category in the US.

5. Boston Beer Company's Truly

  • Truly Hard Seltzer is a brand owned by the Boston Beer Company. The alcoholic beverage is available in 13 different styles.
  • The flavors and sweeteners used in the beverages are all natural. The brand also offers a product called Truly Lemonade.
  • According to UBS, the Truly brand has a market share of 31% in the spiked seltzer market of the US. An article on Business Insider also recognized the brand as one of the leaders in the US market.
  • A report on IBIS World also cites the brand as one of the leaders in the US RTD alcoholic beverage industry.

6. Anheuser-Busch's Bud Light Seltzer

  • Bud Light Seltzer is a ready-to-drink alcoholic beverage brand owned by the largest beer company in the world — Anheuser-Busch InBev.
  • Bud Light Seltzer is manufactured using natural ingredients, such as sparkling water, fruit flavor, and real cane sugar. These ingredients "create a light and bubbly seltzer."
  • A report on IBIS World cites Anheuser-Busch InBev as one of the leaders in the US RTD alcohol beverage industry.
  • According to CNN, "Bud Light Seltzer is already one of the country's top-selling hard seltzer beverages."

7. Molson Coors' Cape Line

  • Cape Line Sparkling Cocktails is a very popular brand owned by MillerCoors, the US-based subsidiary of Molson Coors Brewing Company.
  • The Cape Line products are made up of six natural ingredients. They are carbonated water, real cane sugar, alcohol, natural flavors, citrus juice, and fruit juice.
  • The net sales of the company in the US increased by 4.7% in 2019 when compared to sales in 2018. Cape Line was placed in the list of top 10 growth brands in the US liquor industry in 2019.
  • The Cape Line brand was recognized as the top new entrant "in 2019 in Nielsen’s flavored malt beverage segment as measured by case and dollar sales." According to a global report, Molson Coors is also considered a key player in the RTD alcoholic beverage industry.

8. Campari Group's Campari Portfolio

  • Campari is an alcoholic beverage brand that is owned by a company called the Campari Group.
  • The two RTD alcoholic drinks under the brand name of Campari are Campari Soda and Campari Orange Passion. Campari Soda contains 10% alcohol, and it is available in a conical bottle.
  • Campari Soda is one of the most important brands of the company. The Spirits Business has included Campari Soda in the list of the top five best-selling RTD brands.
  • According to Campari Group's first-half annual report for 2018, the US is the largest market for the group and the second largest market for the Campari brand. The company performed positively in the US with "a positive organic performance of +5.9%", and the Campari brand is one of the major contributors to the growth.
Part
03
of six
Part
03

RTD Category - Brand Leader Analysis (1)

Company Marketing Analysis — RTD Alcohol Beverage Market

RTD Alcohol Beverage Market is a growing market in the United States, according to the annual reports of Brown-Forman and Diageo. Both Brown-Forman's Jack Daniel's and Diageo's Smirnoff use a variety of marketing strategies to promote their RTD's with strong use of social media.

1. Jack Daniel's

Jack Daniel's overall marketing strategy involves storytelling and brand building. According to Brown-Forman’s 2019 Annual Report, the company aspires to be the best brand builders in the industry by creating “enduring connections” with consumers. A large recent focus for campaigns has been on responsible drinking. Recent promotional activities include education, advocacy, and tasting flights.
  • Jack Daniel's Social Media strategy uses storytelling to promote products and "focuses on appealing to a sentiment that it knows fans share", especially on Facebook, according to DigiDay.
  • The messaging and approach for Jack Daniel's Facebook account involves introducing new drinks, sharing cocktail recipes, connecting with fans by promoting famous drinks and sharing seasonal recipes or drink ideas such as for New Year’s, Valentine’s Day, and Christmas.
  • The messaging and approach for Jack Daniel's Instagram account involves promoting the history of the drink and famous fans such as Frank Sinatra.
  • Jack Daniel's Twitter account is much more text based, with short snippets of recipes shared and quick promotional taglines.
  • Jack Daniel's YouTube account includes recipes, related nostalgic songs or videos to play in background while drinking, tastings, and community and team building promotional videos for the distillery such as “Jack Fire” which were short videos about the volunteer firefighters for Jack Daniel’s Distillery.
Non-social media marketing campaigns include:

2. Diageo's Smirnoff

Diageo's Smirnoff's overall marketing strategy, according to Marketing Week, uses strong visuals, brand building, and using "deep consumer, cultural and market knowledge".
  • The messaging and approach for Diageo's Smirnoff's Facebook account involves a lot of public engagement on topics such as favorite drinks, vote the best bartender for World Bartender Day, and favorite seasonal cocktails.
  • The messaging and approach for Diageo's Smirnoff's Instagram account includes sharing recipes, seasonal drinking ideas for Valentine’s Day, etc., drink promo images, and engaging with popular culture such as The Bachelor.
  • Diageo's Smirnoff's Twitter account involves engaging with fans about famous television shows such as the Bachelor, taking polls, sharing references to popular culture and linking it to a product, and engaging with fans in a very personable manner using slang and social media trends like meme culture with “what we should be doing” vs “what we are actually doing”.
  • Diageo's Smirnoff's YouTube account video ads with celebrities, a game show called Party Pitch, and cocktail recipes.
Non-social marketing campaigns include:

Research Strategy

In order to determine what social media platforms were used by the companies, both official websites were consulted. Annual Reports and Press Releases were scanned for information regarding marketing strategies and RTDs. As some information could not be found only through official sources, third-party sources were consulted. Some websites such as Marketing Week, had articles locked behind a subscription, however other news articles were found.



Part
04
of six
Part
04

RTD Category - Brand Leader Analysis (2)

RTD beverage companies use innovative social media and marketing strategies in order to capture consumer attention and to convert the attention into sales. Mike's Hard Lemonade and White Claw are two of the companies in the RTD sector who use diverse marketing and communication channels to reach their target markets.

Mike's Hard Lemonade

Social Media Channels

Twitter

  • The page has 38,211 followers and 4,173 tweets.
  • The last post was written on November 13, 2019.
  • The main theme of the content is fun and includes posts on company products, personal anecdotes, inspirational quotes, and charitable contributions.

Instagram

Facebook

  • Mike's Hard Lemonade has 1,085,794 followers.
  • The theme of this page is fun and it contains creative content based on product ads, dog activities and charities, fun facts and ideas.

LinkedIn

  • This page has 8,405 followers.
  • The theme is company growth and the content discusses new roles opening up in the company.
  • The page has very few posts.

Non-Social Media Marketing Campaigns

  • The company has approximately 12 TV advertisements that market its products.
  • Its summer campaign in 2019 was a multi-platform advertising strategy that consisted of commercial ads, ad spots in local news channels, and free newsstands distributed across the country with free newspapers.

Marketing Strategy

  • The company wholly focuses on digital marketing strategies in order to reach a specific target audience, for instance Millennials.
  • The brand also uses brand ambassadors to market its products and to increase its customer base.
  • The aim of the company is to offer its target customers experiential value so that they remain loyal customers.

White Claw

Social Media Channels

Instagram

YouTube

Non-Social Marketing Campaigns

  • White Claw has approximately 10 TV commercials advertising the brand.
  • The company also ran a print ad in magazines such as the Minnesota Monthly in order to sensitize the public on its products.

Marketing Strategy


Research Strategy

We initially searched for data from marketing articles, the companies' social media pages, and from advertisement sites. From there, we used this material to identify the relevant data that would explain the company's activities on social media and its marketing strategy.
Part
05
of six
Part
05

RTD Category - Brand Leader Analysis (3)

Both Truly Hard Seltzer and Bud Light Seltzer adopt several marketing strategies such as TV, print, social media, and others to market their products. Both brands have social media profiles on Facebook, Twitter, Instagram, and YouTube.

Truly by Boston Beer Company

  • Truly Hard Seltzer has an official profile on Facebook, Twitter, YouTube, and Instagram. The company shares similar content across its social media channels.
  • Their approach to social media marketing involves posting engaging content based on current happenings, events, campaigns, or celebrations.
  • They draw their messaging themes from these campaigns. For instance, they joined in the #TakeoutTuesday, #NationalPuppyDay, #InternationalWomensDay, and other campaigns.

Examples of Non-Social Marketing Campaigns

Overall Marketing Strategy

  • Truly Hard Seltzer utilizes several marketing strategies such as its website, TV, prints, and social media.

Bud Light Seltzer by Anheuser-Busch InBev

  • Bud Light has an official profile on Facebook, Twitter, YouTube, and Instagram. They share similar content across their social media channels.
  • They approach social media marketing in an engaging manner that invites customers to share pictures of their selves with the Bud Light. They also post content or screenshots of short conversations such as this and this to drive their message.
  • Bud Light also draws messaging themes from popular campaigns such as #NationalPuppyDay, #STAYHOME, and others.

Examples of Non-Social Marketing Campaigns

Overall Marketing Strategy

  • Bud Light utilizes several marketing channels such as TV, radio, print, outdoor, promotion and events, and cyber video including social media. Examples of these strategies have been aggregated here.



Part
06
of six
Part
06

RTD Category - Brand Leader Analysis (4)

Molson Coors' launched Cape Line cocktails with a 360° campaign including TV, digital, social, and out-of-home that specifically aimed to target their key demographic or "tribe." Campari Group is known to collaborate with innovative artists, designers and filmmakers in their advertising. They share these collaborations through social media, as seen here and here, and through art-inspired experiential events. Inspired by their success with Aperol, they are now promoting Campari to a younger audience.

7. Molson Coors' Cape Line

SOCIAL MEDIA CHANNELS

  • Cape Line has a presence on Instagram, Facebook, Twitter, and YouTube. However, Instagram is the only one that is being updated frequently: their last Instagram post was one week ago, whereas the last posts on Facebook and Twitter were in July 2019. Their most recent YouTube video was posted in April 2019.

non-social marketing campaigns

overall marketing strategy


8. Campari Group's Campari Portfolio

social media channels

  • Campari has a presence on Instagram, Facebook, Twitter, and YouTube. Across platforms, the Campari banner designs promote Entering Red, a 12-minute short movie that was published on YouTube in February 2019.
  • Campari's social media content is consistent across Instagram, Facebook, and Twitter. They predominantly post pictures of Campari cocktails and caption them poetically, as seen here, here, and here. There are also posts that feature classic Campari artwork, as seen here, here, and here.
  • Aperol has also been promoted through Instagram. Campari Group made instructional gifs that showed how to make an Aperol Spritz cocktail. They created an Aperol Brunch Society and they launched a competition to be a Chief Brunch Officer, which was decided based on application videos posted to Instagram.

non-social marketing campaigns

overall marketing strategy

Sources
Sources

From Part 01
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."
  • " Thus, RTD alcoholic drinks are gaining acceptance by a more extensive millennial consumer base, which, in turn, is catalyzing market growth. "
Quotes
  • "The market in North America is expected to dominate the global RTD spirits market due to the increasing demand for RTD spirits from foodservice industry. Moreover, the increased spending capacity of the population in the region is forecasted to propel the growth of RTD spirits market in the region."
Quotes
  • "Consumers are seeking complex serves, even from convenient options, be it from rare or localised botanicals to unique or craft twists on classic cocktails."
  • "Consumers more aware of what they are putting into their bodies than ever before."
  • "... consumers seek out serves that speak specifically to them and their lifestyle."
Quotes
  • "As the market for hard seltzer spiked last year—up more than 200% with more than $1.2 billion in sales—meme-friendly, millennial-savvy White Claw emerged as the life of the party. Launched by Mike’s Hard Lemonade manufacturer Mark Anthony Brands in 2016, it accounted for 54% of 2019 hard seltzer sales."
Quotes
  • "“People today, particularly Millennials, are looking for innovation and quality,” explains Bob Safford, founder of Joia Spirit, which is owned by Prestige Beverage Group. The brand lineup currently includes a Sparkling Cosmopolitan, Sparkling Greyhound and Sparkling Moscow Mule cocktail. “The difference we’re bringing is the next evolution of the craft spirit. We’re taking that trend and putting it into today’s ‘convenient lifestyle’.”"
  • "“I’ve been in the business a long, long time, but have never seen anything quite like this,” says Wes Lewis, CEO of Ennoble Beverages, which is behind the malt-based canned Bloody Mary RTD called Tipsy Tomato. “We’re so inundated by consumers today looking for something new.”"
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 02
From Part 06