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Cutwater Spirits: Anheuser-Busch Label Emerges As Key RTD Cocktail Player

March 19, 2021

The spirits-based RTD market is booming, with large and small brands alike reporting rapid growth. According to Impact Databank, five of the 15 leading pre-packaged cocktails grew by more than 100% in 2020, and another three grew by more than 50%. The combination of premiumization, convenience, variety, and continuing on-premise restrictions has created unique conditions for consumers to embrace pre-mixed cocktails. Beer behemoth Anheuser-Busch InBev is leveraging those trends with one of its most successful spirits forays to date—the Cutwater Spirits range of canned cocktails.

AB InBev acquired San Diego-based Cutwater Spirits in 2019. Last year, Cutwater more than doubled in size and crossed 700,000 9-liter case equivalents, according to Impact Databank. “Cutwater is part of an exploding category of RTD cocktails,” Lana Buchanan, AB’s vice president of marketing for “Beyond Beer,” told SND. “We grew 120% in IRI channels last year, driven by both our core propositions and innovation.” In addition to Cutwater, AB’s Beyond Beer segment includes hard seltzers, hard kombucha, and Bud Light ‘Ritas, among other offerings.

Cutwater is looking to take another big step forward this year, airing its first Super Bowl ad amid a wider marketing push, which also includes a new campaign and social media series starring Emily Hampshire, known for her work on Schitt’s Creek.

Cutwater’s portfolio is vast, offering roughly 20 expressions made with house distilled spirits, and skews toward classic cocktails, typically created by co-founder and distiller Yuseff Cherney and Gwen Conley, head of the quality and innovation team. “Gwen offers science-driven insight into the sensory experience that each cocktail creates,” Cherney told SND. “It is usually the two of us who develop all the new products and tweak them until we’re satisfied with all aspects of taste.”

Offering canned cocktails comes with challenges like securing materials for cans and space on canning lines, but Cutwater says it’s positioned to thrive even during a market pinch. Cherney previously served as COO and head brewer at craft brewer Ballast Point. His experience producing and canning at scale has been essential to Cutwater. “I began canning cocktails because I wanted to elevate a category using my own real spirits and mixers to make and can a high-quality drink that was convenient and portable,” he said. “We make all the mixtures in-house and can them on our high-speed canning line, which very few companies do in-house.”

Cutwater is one of a number of rising brands in AB’s Beyond Beer unit, said Buchanan, pointing to Babe canned wine and BonViv, a malt-based hard seltzer, as other standouts. Looking forward, California and Salt Lake City, Utah will be areas of focus for BonViv, and New York will continue to be a key market for Babe. “We also have brands that are continuing to drive growth in up-and-coming categories like our hard kombucha, Kombrewcha,” she said, adding that AB also has more flavored malt beverage propositions in the pipeline.—Shane English

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