The Rising Trend of Ready-to-Drink Cocktails in the Beverage and Hospitality Industry

By Mallory Ambrose | June 20, 2024

Seven years after ready-to-drink cocktails began making headlines, premium, spirits-based RTDs show no signs of slowing growth. Here’s what you should know about the category today.

The ready-to-drink (RTD) cocktail market is experiencing a dynamic transformation, becoming a significant player in the beverage and hospitality arena.

These pre-mixed, portable beverages offer convenience without compromising on quality, appealing to a wide range of consumers. This trend is not only reshaping consumer preferences but also impacting how businesses in the industry operate.

Market Growth and Consumer Demand

The RTD cocktail sector has seen remarkable growth over the last few years. According to a report by IWSR Drinks Market Analysis, the RTD category is expected to grow by +12% in volume between 2022 and 2027, hitting $40bn by 2027 across 10 key markets. This impressive expansion is driven by changing consumer lifestyles, particularly among millennials and Gen Z, who value convenience and premium quality. The COVID-19 pandemic further accelerated the adoption of RTD cocktails. With bars and restaurants facing restrictions, consumers turned to RTDs as a way to enjoy high-quality cocktails at home. Nielsen reported that sales of RTD cocktails in the U.S. surged by 63.5% since 2023, highlighting a significant shift in purchasing behavior.

Why RTD Cocktails are Gaining Popularity

Several factors are contributing to the growing popularity of RTD cocktails:

  1. Convenience: RTD cocktails offer a hassle-free alternative to traditional cocktails, eliminating the need for multiple ingredients and precise measurements. This makes them an attractive option for consumers seeking a quick and easy way to enjoy their favorite drinks.
  2. Consistency and Quality: One of the key advantages of RTD cocktails is the consistency they provide. Each can or bottle delivers a perfectly mixed drink, ensuring a high-quality experience every time across different locations and service times.
  3. Premiumization: The RTD market is moving beyond basic flavors to offer sophisticated, high-end options. Brands are focusing on using premium ingredients and innovative flavor combinations to cater to discerning palates. This trend towards premiumization is evident in the emergence of craft RTD cocktails, which mimic the complexity of drinks typically found in upscale bars.
  4. Portability: The portability of RTD cocktails makes them ideal for various occasions. Their ready-to-consume nature allows consumers to enjoy a cocktail anywhere, anytime, without the need for bartending skills or equipment. These beverages can be served in various settings—poolside at a hotel, as part of a room service menu, or as a quick addition to a restaurant’s drink list—providing flexibility for hospitality businesses.
  5. Increased Revenue: Offering RTD cocktails allows establishments to expand their beverage menu without the need for extensive staff training or additional bartending skills, potentially increasing their revenue streams.

As the popularity of ready-to-drink (RTD) cocktails continues to rise, restaurants and hotels are increasingly incorporating these convenient, high-quality beverages into their offerings. By doing so, they are tapping into a burgeoning market and meeting consumer demand for premium, ready-made cocktail experiences.

Marriott Hotels

Marriott Hotels have incorporated RTD cocktails into their beverage menus at various locations. They offer premium canned cocktails from brands like On The Rocks, which are crafted with high-quality ingredients and designed to deliver a bar-quality experience. These RTD options are available in hotel bars, lounges, and through room service, providing guests with a convenient and consistent drink option.

Kimpton Hotels & Restaurants

Kimpton Hotels & Restaurants have embraced the RTD cocktail trend by partnering with local craft cocktail brands to offer unique, high-quality beverages. Their mini-bars and in-room dining menus feature a selection of RTD cocktails, enhancing the guest experience with premium, ready-made options. This approach aligns with Kimpton’s focus on offering personalized and locally inspired experiences.

Hyatt Hotels

Hyatt Hotels have introduced RTD cocktails as part of their F&B (Food and Beverage) strategy, particularly in their upscale and lifestyle brands. For instance, at the Andaz and Thompson properties, guests can find curated RTD cocktails from reputable brands. These cocktails are available in hotel bars, poolside, and through in-room dining services, catering to the demand for convenient and premium drink options.

Hilton Hotels

Hilton Hotels have incorporated RTD cocktails into their bar and room service menus across various properties. By offering RTD options from well-known brands such as Cutwater Spirits, Hilton ensures that guests can enjoy high-quality cocktails without the wait. This addition not only enhances the guest experience but also streamlines operations for hotel staff.

Impact on the Hospitality Industry

The rise of RTD cocktails presents both opportunities and challenges for on-premise operators. On one hand, they provide an additional revenue stream for bars and restaurants. Establishments can sell premium RTD cocktails as part of their takeaway or delivery offerings, tapping into the growing demand for at-home consumption. On the other hand, the convenience of RTD cocktails could potentially reduce in-bar sales, as some consumers might opt for the ease of enjoying these drinks at home. To counter this, many bars and restaurants are incorporating RTD cocktails into their menus, offering unique, branded options that cannot be found in stores.

Key Players and Innovations

Several key players are driving innovation in the RTD cocktail market. Brands like White Claw, Truly, High Noon, and Cutwater Spirits have set high standards with their diverse and creative offerings. Additionally, traditional spirits brands are entering the RTD space, leveraging their reputation for quality to attract consumers. For example, brands like Absolut and Jack Daniel’s have launched their own lines of RTD cocktails, further legitimizing the category. Innovation in packaging and sustainability is also a significant trend. Eco-friendly packaging options, such as recyclable cans and bottles, are becoming more prevalent as brands respond to consumer demand for sustainable products.

Future Outlook

The future of RTD cocktails looks promising, with continued growth anticipated. As consumer preferences evolve, the market is likely to see more diverse and sophisticated offerings. According to Grand View Research, the global RTD cocktails market size was estimated at USD 853.2 million in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 14.0% from 2023 to 2030.

For the beverage and hospitality industry, staying ahead of this trend involves embracing innovation and understanding consumer preferences. By incorporating RTD cocktails into their offerings, businesses can meet the growing demand for convenience and quality, ensuring they remain competitive in a rapidly changing market.

The rise of RTD cocktails is reshaping the beverage and hospitality landscape, driven by consumer demand for convenience, consistency, and premium quality. As this trend continues to gain momentum, businesses that adapt and innovate will be well-positioned to thrive in the evolving market. Whether through unique in-house creations or partnerships with leading brands, embracing RTD cocktails offers a pathway to sustained growth and customer satisfaction.