This audio was auto-generated. Please let me know if you have any feedback.
The popularity of hard seltzers has transformed the alcohol industry in the late 2010s, with brands like White Claw and Boston Beer's Truly enjoying huge success in 12-ounce cans of carbonated soda.
Since then, the canned cocktail category that began with hard seltzer has exploded into a much larger ecosystem. From hard teas to whiskey and vodka drinks made with Coca-Cola soda, producers are confident that ready-to-drink is not a passing fad.
Spiros Malandrakis, senior alcohol industry researcher at Euromonitor International, sees the ready-to-drink canned cocktail category as part of a past alcohol fad, like wine coolers in the 1990s. He believes that as the trend evolves, the drinks will continue to evolve, appealing to consumers who previously consumed less expensive beer and wine products at parties.
“The reason the timeline has shortened is because everything has gotten faster than it used to, and now we’re getting to the latest phase that we think will last longer: spirit-based cocktails,” Malandrakis said. “It’s not the last change. There will be more changes. That’s the nature of the beast.”
As consumers become more accustomed to canned cocktails, demand for more premium alternatives has grown. Sales of ready-to-drink cocktails made with real spirits, like vodka, are expected to grow 26.8% in 2023, reaching $2.8 billion, according to data from the Distilled Spirits Council of America.
Malandrakis said the growth of canned cocktails comes amid a “great convergence” in the beverage industry driven by Gen Z buying trends, as traditional category lines blur and new beverage products cater to different or overlapping drinking occasions.
Meanwhile, sales of traditional hard seltzers made with less expensive malt alcohol have declined since peaking in 2021, hitting brands like Boston Beer’s Truly, which launched a tequila soda earlier this year to capitalize on the changing trend. Best-selling hard seltzer brand White Claw has also released its own tequila seltzers this year in unique flavors like Mango Tamarind and Lime Prickly Pear.
Matt Hughes, managing partner at beverage incubator Franchise Equity Partners, said the ready-to-drink category continues to attract new consumers looking for new flavor options, especially products that feel familiar to them and fill a niche.
While at Coca-Cola, Hughes worked to introduce Topo Chico into the hard seltzer space, which launched in 2021. “A lot of Topo Chico fans use that as their drinking water, so when Coca-Cola launched it with Molson Coors, people understood it.”
Selected captions
Courtesy of Surfside
The soul promotes growth
While malt-based hard seltzers are typically aimed at younger, college-aged drinkers, the category is also gaining traction with older consumers who are looking for pre-mixed drinks made with real tequila or vodka that are reminiscent of the high-end cocktails you'd find at a bar.
High Noon, which produces hard seltzers made with vodka and tequila and ones made with real fruit juice and no added sugar, has seen significant growth in recent years among consumers looking for alternatives made with real alcohol and fewer additives.
Britt West, vice president of High Noon parent company Spirit of Gallo, said the company’s volumes have grown 57 percent as consumers switch from beer and other hard seltzers. But the company aims to remain adaptable. She said the growth of ready-to-drink hard teas influenced the company’s decision to launch High Noon Vodka Iced Tea this summer.
“The hard seltzer category was created in response to changing consumer preferences, so it’s no surprise that the landscape has changed over the years as more brands have entered the category along with its growth,” West said. “We look forward to continuing to monitor consumer trends so we can quickly innovate to deliver hard seltzers that meet their needs.”
Coca-Cola's canned cocktail strategy reflects a shift toward spirit-based drinks. Last year, it launched Jack Daniel's Coca-Cola in partnership with Brown Forman. Earlier this year, it launched Sprite and Absolut drinks in Europe in partnership with Pernod Ricard.
For new brands looking to make a splash in ready-to-drink alcohol, Hughes says those that can tap into the zeitgeist will find success in niche markets, particularly regional players that have built a larger following. He cited Surfside, a vodka-based hard tea and lemonade brand that established a local presence in Pennsylvania and New Jersey before launching nationally this summer.
“They got the liquid right, they got the visual identity right,” Hughes said. “They got the brand story right, and now they’re expanding nationally very quickly.”
But Malandrakis says one downside to the growth of canned cocktails is that they could cannibalize sales of traditional spirits.
“Because a lot of these products have been positioned as beer-adjacent, there’s always been this question of whether they’re going to hurt beer or add a new consumer,” Malandrakis said. “If you have the option to get a pre-mixed vodka cocktail right now, it’s very unlikely you’re going to go buy a bottle of vodka.”
