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Premixed Cocktails: A Major Growth Engine For Top Spirits Players

February 10, 2021

While flavored malt beverages (FMBs) and traditional hard seltzer brands brewed from malt ingredients are continuing their rapid growth, the spirits-based premixed cocktails segment has soared to prominence lately, with nearly all of the spirits industry’s top players taking part. After a robust 21.5% gain in 2019, prepackaged cocktails surged by more than 60% last year to over 14 million 9-liter cases, according to Impact Databank. That’s nearly double the 2018 volume level over just a two-year span, driven by a plethora of newer canned products, as well as a boost from longer-tenured, traditional premixed brands.

Volumes of prepackaged cocktails rose 86% in the 52-week period ending December 26 in Nielsen channels to 9.15 million cases. While Covid-19 has severely impacted the on-premise, premixed brands have bridged the gap between the general market and cocktail enthusiasts by providing a multitude of flavor profiles, combined with convenience and instant gratification. And the price point for the spirits-based cocktail category is much higher (over $80 at retail per 9-liter case equivalent) than FMBs’ ($35 per case), according to Impact Databank.

“Consumers want to take spirits-based products to places where they used to drink beer,” explains Britt West, vice president and general manager at E.&J. Distillers, marketer of vodka-based High Noon Sun Sips. “The response to High Noon has been off the charts,” West says. “We’re finding that consumers are willing to trade up when choosing a hard seltzer.”

The success of spirits-based canned cocktails has inspired a host of new entries, including extensions of top-selling spirits brands such as Bacardi Real Rum RTD cocktails. Bacardi sees the product as a way to introduce people to the rum category, says Bacardi North America president Pete Carr, adding that the company is exploring new offerings across the portfolio. Beam Suntory acquired premixed brand On the Rocks for an undisclosed sum last September. Brown-Forman launched whiskey-based Jack Daniel’s canned cocktails in 14 states a few months ago, Diageo recently introduced Ketel One Botanical Spritz canned cocktails, and Pernod Ricard-owned Absolut and Constellation-owned Svedka have also entered the space. Meanwhile, Proximo Spirits launched Playamar, a spirit-based seltzer made with Jose Cuervo Tequila, retailing at $12 a 4-pack of 12-ounce cans. Playamar sold about 20,000 cases in its 2020 debut, according to Impact Databank.

Big-name breweries are also rising in the prepackaged cocktail space, now investing more in their ready-to-drink segments. In February 2019, Anheuser-Busch InBev acquired San Diego-based Cutwater Spirits for an undisclosed price. Cutwater’s spirits-based canned cocktails more than doubled to above 700,000 9-liter case equivalents last year, according to Impact Databank.

With consumer awareness only growing, there seems to be no sign of a slowdown, especially as the pandemic lingers and on-premise restrictions persist. The past two years, prepackaged cocktails have outperformed other high-growth segments, such as Tequila, Cognac, Irish whiskey, super-premium Bourbon, flavored whiskies, and single malt Scotch. Spirits-based cocktails, particularly canned brands, will continue to have a sustainable growth curve that will see increased share within the overall spirits and beverage alcohol industries looking ahead, according to Impact Databank.—Natalia Razzo

Top 7 Spirits-Based Premixed Cocktails In The U.S.
(thousands of 9-liter case depletions)
Rank Brand Company 2019 2020 Percent
Change1
1 High Noon Sun Sips E.&J. Distillers 738 2,950 300%
2 Jose Cuervo Authentic Margaritas Proximo Spirits 1,919 2,945 53.5%
3 Monaco Atomic Brands 1,110 1,522 37.1%
4 1800 Ultimate Margarita Proximo Spirits 589 962 63.5%
5 Cutwater Cutwater Spirits (ABI) 300 735 145.0%
6 Jose Cuervo Golden Margarita Proximo Spirits 395 539 36.6%
7 Canteen Canteen Spirits 90 517 474.4%
Total Top Seven2 5,139 10,170 97.9%
1 Based on unrounded data.
2 Addition of columns may not agree due to rounding.

Source: IMPACT DATABANK © 2021

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