Beam Suntory Leverages Rising Ready-To-Serve Cocktail Segment

With prepared cocktails continuing to provide a growth engine for the U.S. spirits market—rising from under 10 million cases in 2019 to nearly 60 million cases last year, according to Impact Databank—Beam Suntory is among the major players looking to capitalize on the category’s popularity. While canned ready-to-drink offerings have been the biggest drivers of the prepared cocktail boom, Beam Suntory has also targeted the growing ready-to-serve segment with larger-format bottles.

In 2020, Beam Suntory acquired ready-to-serve brand On the Rocks (OTR) for an undisclosed sum. Last year, the brand reached 600,000 9-liter cases, fielding a portfolio that includes an Old Fashioned made with Knob Creek, a Cosmopolitan made with Effen vodka, and a Margarita made with Hornitos Tequila ($13 a 375-ml.). “We see OTR as an anchor for premium-plus cocktail bottles,” Heather Boyd, Beam Suntory’s managing director of RTDs, tells SND. “And that segment grew 47% (through late last year), which is 19 times faster than the spirits category. The brand is growing, and there’s so much runway.”

Boyd says the ready-to-serve segment is of especially high value for retailers. “What we find with this segment is that it’s a high-frequency shopper. Over 80% purchase at least once a month,” she notes. “They’re high-value shoppers, spending more than 20% more per basket, with about 60% of their purchases being impulse.”

In addition to On the Rocks, Beam Suntory counts the Delola ready-to-serve brand in its portfolio. Delola was founded by Jennifer Lopez and industry veterans Ken Austin and Jenna Fagnan, and shipped 107,000 9-liter cases in its launch year. Beam Suntory is a minority investor and is handling global distribution. Delola includes a vodka-based Bella Berry Spritz (10.5% abv), Tequila-based Paloma Rosa Spritz (11.5% abv), and L’Orange Spritz (10.5% abv), with 750-ml. bottles selling at $23 and a 375-ml. format positioned at $12.

“Both On the Rocks and Delola are sourcing very heavily from wine, so they’re actually bringing drinkers into the cocktail segment,” says Boyd. The two brands complement each other, with On the Rocks offering higher-abv cocktails and Delola presenting lighter spritz drinks, she notes, adding that Delola saw “an incredible reception in terms of selling in the brand and its initial launch, particularly with our national accounts partners.”

Both labels will see innovation activity this year, with On the Rocks debuting a new Strawberry Daiquiri expression in the coming weeks and prepping a limited-time Blue Hawaiian bottling for the spring. Delola will also see an extension to its range, Boyd says.

Meanwhile, Beam Suntory is seeding a third label, -196° C Vodka Seltzer, which piloted in four markets last year and garnered interest among younger consumers. The Japanese import is slated for expansion looking ahead, with the company aiming to extend distribution to 15 markets in 2025.—Daniel Marsteller

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