Ready-To-Drink Alcohol Innovation: What’s Next

Nov 9, 2021Beverages, Categories

Seltzers and Beyond

The ready-to-drink alcohol segment is undeniably exciting, incredibly fast-paced, and unquestionably innovative. Recently, a new wave of hard seltzers hit the scene with lemonades, teas, and punches. However, the million-dollar question is, what will be next? There have been many recent publications around the seltzer bubble bursting— leading us to ask, is this the downfall for seltzers?

This segment has become a staple in homes. Seltzers are many consumers’ first choice now when it comes to ready-to-drink alcoholic beverages. This is due to many reasons; it is convenient, has fewer calories, is more sessionable, and tastes great. We talked about current trends in a previous blog, and are expected to see continued growth in this segment. Yes, the growth is slowing but according to Beer Business Daily, this $7B industry will show a 20% increase by the end of the year.

With 300+ suppliers now in hard seltzer, the category is clear in its gold rush phase according to Dan Wandel. He adds that despite this gold rush, 40 SKUs are diving 80% of the segment's sales and the top two suppliers remain at 70-share of the total segment. Source: Beer Business Daily

We do not think seltzers are going anywhere any time soon, but we do strive to keep the entire ready-to-drink alcohol space dynamic and relevant to consumer needs. In our recently published magazine, we dive into the shift in consumer dynamics towards mindful drinking, unique experiences, and tailored offerings. Below we will provide a high-level recap of where we see the market moving:

Spirit-Based Cocktails

The shift from beer to seltzers opened consumers’ palate to a natural transition to spirit-based for ready-to-drink innovation. Cocktail culture is a strong one. It has been an exciting time to observe this shift into the retail world. For the first time, many consumers that may not be able to travel to many of the best bars in the world can experience this shift in the comfort of their homes.

When creating new libations in this space, let’s talk about what we see happening in the market. Datassential shows in their menu adoption curve that the cocktails are in the ubiquitous phase (this means you can find these cocktails just about anywhere. Think margarita, mojito, sangria, etc.) are fruity and sweet. However, when we look at the adoption and inception phase, we see the market shifting towards craft, spicy, complex, and health-forward cocktails.

I notice the growth in kombucha and shrub cocktails, CBD and mushroom cocktails, and even bitter libations. Some of my personal favorites and fastest-growing cocktails are the Aperol Spritz and the Espresso Martini. The fastest-growing cocktail, according to Datassentials CAGR, over the past four years is the spicy margarita!

For those of you who craft spicy beverages, you understand the challenges around bringing the heat. Through our Naturex acquisition, we offer a fire-roasted pepper line (habanero, serrano, jalapeno, etc.) that takes peppers and puts them under fire and delivers this incredible authentic profile to beverages that I truly cannot get enough of.

Nostalgic Offerings

These past 18 months have not been easy, we all can admit that. However, now that things are opening up, everyone wants to make up for lost time and we are all looking for more out of our beverage experiences. Yes, consumers learned how to craft some cocktails at their home bars, and therefore when they go out they want something that will delight them.

One way to do this is to help consumers resonate on better days. Nostalgic offerings allow consumers the opportunity to escape to their childhood and reminisce on better days. At the height of the pandemic, bars started introducing to go cocktails served in what reminded me of CapriSUN type packaging. This allowed consumers an opportunity to still support their local restaurants but also to release their inner child.

I recently noticed that in Cincinnati, one of our local breweries, March First, launched a red cream soda hard seltzer that tastes just like, you guessed it, red cream soda. It is a favorite in the area, being bought up by the case. To me, this marries the hard sodas we saw dominate the market around six years ago with hard seltzers, allowing consumers to indulge in more than just one. Consumers still taste a great, bold flavor. It is not too heavy, highlighting flavors that give consumers the ability to escape in their minds, even if it’s only for a limited time.

cans to red cream soda sitting on a table

Guilt-Free Drinking

Health and wellness is a focus for consumers around the world. This trend has seen a huge emphasis in many food and beverages categories, and to some of you, it might come as a surprise but also to alcoholic beverages. Consumers want to feel better about imbibing, showing us this in many ways. We have seen the introduction of botanicals, teas, shrubs, and low/no alcoholic alternatives.

Many consumers, including Gen Zers, are trying to be healthier as they seek out low and no options. They want to go out and still feel like they are encountering a special experience tailored towards their needs. But removing alcohol comes with its own set of taste challenges.  From dreary to drab, the no/low libation may have you wondering, “Where’s the flavor?” That’s because alcohol actually helps with flavor delivery, providing a brighter, more impactful experience.  In some instances, the beverage may seem watered down or thin. Don’t settle for this lackluster libation. Leverage Givaudan’s TasteSolutions technology to bring your product the notoriety it deserves. 

Explore More Options

Today we were able to just scrape the surface but if you are interested in understanding more about these trends or how Givaudan can help, please contact NOAM.Marketing@Givaudan.com. We can share with your our magazine that dives into this topic in much greater detail. Last, if you are looking at trying to introduce new flavors in your beverages please take a look at our Givaudan Storefront.

Cheers,
Savannah Turner

 

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