This summer’s hottest cocktails come in cans.
Between 2019 and 2020, the pre-mixed cocktail category grew 50% in the United States, according to industry-tracking IWSR data. This section is also quite small. It accounts for only 3% of the US liquor volume. Based on data from the US Distilled Spirits Council. But companies and industry experts are expecting huge growth after the pandemic. Bank of America Securities forecasts the category to reach $3 billion to $4 billion in revenue in the next few years.
The rise of hard spirits has made canned cocktails even more popular. Ready-to-drink vodkas, sodas, or gin and tonics appeal to consumers looking for a stronger flavor or more alcoholic beverage. And this category expands with more variety.
as well as hard drinks Canned cocktails attract consumers who choose alcoholic beverages based on convenience and flavor. However, ready-to-drink cocktails tend to be more premium because the main ingredient is made from real spirits. It̵7;s not the sugar or malt found in hard sodas or lemonade. A six-pack of solid seters usually sets consumers back $10, which is the starting price for a four-pack of canned cocktails.
Canned cocktails are also rare outside of liquor stores because states regulate them differently than flavored malt beverages.
In a March report sent to customers Bank of America beverage analysts chose Anheuser-Busch InBev and Diageo as the two companies to become key players. For now, some of the notable brands include E. & J. Gallo’s High Noon, Monaco, Cutwater Spirits’. AB InBev and Beam Suntory’s On the Rocks
Alcohol giant AB InBev entered the market in 2019 by acquiring Cutwater, a San Diego-based craft distillery. Cutwater is the second-best-selling canned cocktail brand in dollars. with a 10% share of the ready-to-drink cocktail space. Based on IRI data from week 13 ending May 9.
For Budweiser brewers Such acquisitions pave the way for a new category. As beer consumption has been declining in recent years, Fabrizio Sonsini, president of the company’s non-brewing product group. Says his department’s top priority is ready-to-drink beverages.
“I think COVID is a driver for ready-to-drink beverages. because it brings the convenience of a bar to your home,” he said, “and we see that growth. Thank God we have Cutwater.”
In addition to Cutwater, AB InBev has partnered with a Canadian distillery in Nutrl, a vodka drink. Zonzini said the company will test the drink in the United States. To appeal to consumers who want a lighter and more refreshing cocktail. Similar in taste to hard sodas, last year the company launched a flavored vodka under the Natural Light brand, which could mean canned vodka cocktails from the brewer if the liquor sells well.
“If we see results if it is connected to the way we believe It will open another door,” Sonzini said.
Diageo, owner of Johnnie Walker, is pushing himself in the segment. in April The company acquired Loyal 9, which mixes vodka and lemon juice in cans. Prior to the purchase, the company launched canned asparagus cocktails of Crown Royal, Ketel One Botanical and Tanqueray.
“This category is doing very well. is the fastest growing segment of [total beverage alcohol] And it’s accelerating quickly,” said Jay Sethi, Diageo’s senior vice president of North American facilities.
Sethi said consumers are increasingly looking for premium canned cocktails. This means they are willing to pay more as well.
It’s not just the alcoholic beverage giants looking to benefit from the growth of canned cocktails. Small start-ups such as Cardinal Spirits Distillery have also released versions.
Zing Zang, whose cult following the Bloody Mary concoction, entered the spirits market last year with its first line of canned cocktails. It took years to perfect the formula and it was easy to find a supplier who could transport the alcohol. But so far the drink has performed well, according to CEO Brent Albertson.
Albertson, who spent three decades at Diageo before joining Zing Zang, said the company’s market research found people aged 25 to 37 were the target market for the beverage.
“They don’t drink to get drunk,” Albertson said. “They want to do it on boats, on golf courses. They want convenience and portability.”
Although consumers are flocking back to their favorite bars. But the canned cocktail trend is not expected to fade. Brandy Rand, IWSR Drinks Market Analysis’s chief operating officer for Americas, said she expected more ready-to-drink beverages to appear on the menu.
“Consumers like them. And they also give on-site operators a profitable option when faced with capacity and personnel issues. narrower profit margin and a thinner menu,” says Rand. “Canned cocktails are also a great option for takeaway drinks in states where the law is.”