by Damian Vincent Dobrowolski
The RTD category remains in a prosperous growth phase, fueled by convenience and a desire for expertly crafted and delicious versions of consumers’ favorite cocktails. While hard seltzer sales have leveled off in some markets, demand for higher-quality, more complex RTDs is driving value growth. Projections indicate the category will expand by 12% by 2027, reaching $40 billion in value, according to IWSR data.
Natasha Swords, CMO of canned cocktail company 21ROCS, highlights the future outlook of the RTD market. “Cocktails are expected to be top performers, growing 4% from 2022 to 2027,” she notes. “They will potentially capture a quarter of the RTD market share currently held by hard seltzers, which are anticipated to decline by 11% in the same timeframe.” 21ROCS offers a portfolio of California wine–based cocktails clocking in at 9.9% ABV—think favorites like Margaritas, Moscow Mules, and Mojitos that appeal to consumers seeking options perceived as healthier than traditional spirit-based drinks. Additionally, the brand’s wine-based composition offers a strategic advantage, opening up distribution channels like convenience stores and establishments with beer and wine licenses.
Consumers are prioritizing mindful drinking for various reasons, from wellness goals to simply wanting delicious alternatives that fit different occasions. Among the brands innovating with alcohol-free versions of classic cocktails is Spiritless, a Louisville, Kentucky brand founded by three women with a love for bourbon. Their proprietary distillation process makes them “the only truly distilled nonalcoholic product on the market,” according to CEO Lauren Chitwood. Offering an Old-Fashioned, Whiskey Sour, and Margarita in RTD form, they pride themselves on producing nonalcoholic cocktails that don’t compromise on smooth, authentic flavor. Chitwood notes that consumers are “willing to pay up, not down, for products similarly packaged and marketed to spirit-based RTDs.” Spiritless is “for everybody sometimes, but not everybody all the time,” she says, adding that among their key customers are millennial parents—busy, hard-working adults who appreciate that it “feels like an adult drink” that allows them to rise and grind the morning after. In regard to sales, Spiritless is finding “most of the canned cocktail growth and velocity in the grocery channel,” Chitwood says, and she and her team expect the off-premise to outweigh online sales in the future.
Other brands have put a different spin on what a cocktail can be. British Columbia–based aēlo has created zero-calorie, zero-sugar, zero-alcohol beverages made from 100% plant-based spices, herbs, and extracts. Handcrafted by an internationally award-winning mixologist, their G & T, Aperitivo Spritz, Peach Bellini, and Lime Margarita are chic and refreshing, delivering a high-quality cocktail experience that can be enjoyed “no matter the occasion, mixology skill, or health requirements,” says founder and CEO Christos Kalaitzis. Driven by the goals of sustainability and positive community impact, aēlo uses environmentally friendly packaging and is committed to planting a tree per box sold. Distributed in 1800-plus locations across Canada—from grocery, retail, convenience, and liquor stores to restaurants, hotels, and bars and even on domestic and international flights with Flair Airlines—aēlo is catering to what Kalaitzis identifies as consumers’ growing “prioritization of healthier lifestyles, ingredients you can pronounce, lower sugar content, and alcohol-free or low-alcohol options.”