Changing consumer tastes have had an impact on the performance of the RTD market in Ireland which could be described as mature.
This may be due to pressure on the brand-leaders in this market segment to keep up with these changing consumer tastes by continuing to innovate.
Three brands tend to account for the bulk of volume in Ireland’s RTD market: WKD, Smirnoff Ice and Bacardi Breezer.
The RTD market here has shown slight growth overall but those in the trade suggest that this is being driven by discounting in the off-trade where value growth has fallen behind volume growth.
Nielsen figures also indicate that the on-trade market has declined by nearly 6% Year-On-Year.
This decline was perhaps underpinned in the on-trade by demand for fresh cocktails, but the convenience of RTDs remains their key selling-point according to a 2016 report on the RTD/high-strength premix market here from Euromonitor called RTDs/High-Strength Premixes in Ireland.
The RTD/high-strength premix market is very competitive, states Euromonitor, with a high number of new product developments taking place.
“Diageo Ireland took over leadership in RTDs/high-strength premixes in 2015 with a 29% volume share, ahead of arch-rival Irish Distillers with a 24% volume share,” states the report, “Diageo proved a particularly strong competitor in the category in 2015 due to its increased focus on innovation and the launch of numerous new products and flavours over the past three years which finally paid off in 2015 as the company’s total volume sales in the category increased by 14%.”
The report adds that future sales are set to be supported by innovation in terms of both products and packaging as the companies present in the category aim to retain the engagement of their target audience whose interest in the category is expected to evolve.
Nearly a year earlier Euromonitor pointed out that high unit prices continued to limit the appeal of these products, particularly among the young consumer base that they mainly target.
“RTDs/high-strength premixes notably face considerably higher excise duty rates in comparison to beer or cider,” stated Euromonitor.
“Women are the main consumers of RTDs/high-strength premixes in Ireland with a fairly even split across age groups,” it reported, “However, reasons for consumption and the type of RTDs/high-strength premixes consumed differ across age groups.
“Younger women aged 18 to 30 years-old are more likely to consume spirit-based RTDs and high-strength premixes as drinks before going out.
“Older women meanwhile tend to opt for products that offer a refreshing drink with low alcohol levels, seeking a carbonated alcoholic drink that’s not beer and thus often attracted by sparkling wine-based RTDs.”
UK drinks analyst GCA Strategy has taken a look at the RTD market and its Senior Account Manager Joanne Charnock agrees that the biggest challenge for RTD suppliers is to continue to move the category forwards.
They need to be exciting for their younger, more fickle consumer base before they migrate to other categories, she warns, pointing out that brands tackle this by consistently innovating new flavour profiles and renewing packaging and promotions.
This has certainly been the case on the Irish market.
‘WKD for the now’
— €72 million category growth opportunity
WKD, one of Ireland’s top-selling RTD brands, has undergone a radical reinvention. SHS Drinks, WKD’s brand owner, has launched two new, lower-calorie, contemporary flavour combinations and introduced a revolutionary new pack design across the WKD range.
Supported by a dedicated communications programme, ‘WKD for the Now’, the reinvention coincided with the 20th anniversary of the iconic RTD brand’s launch in 1996 and ensures that WKD resonates with the lifestyle of today’s 18 to 24 year-olds.
SHS Drinks estimates that attracting one million new drinkers over the next three years could generate €72 million in sales for the RTD category across the total take-home and on-trade trading channels. There are three variants in the range: the original WKD Blue; WKD Berry and WKD Passionfruit (Blush).
The transformational pack design and contemporary new 275ml bottle shapes with bottle caps, in a variety of bright colours add an element of fun. No changes have been made to flavour or ABV which remains at 4%.
NKD has the same 4% ABV as WKD, but at less than 100 kcal per 275ml bottle NKD has less than half the calorie content and a lighter taste profile.
Low Calorie ‘Hard Seltzers’ target millennials and calorie-conscious drinkers
— New premium drink offers alternative to “high calorie and overly sweet RTD offerings”
For those who enjoy the occasional drink but are conscious of their calorie intake, a new drink from Irish Startup RTM Beverages could hit the spot. It’s called Loki & Co (Low is Key!), a 4% ABV craft drink blending Irish sparkling natural mineral water with natural fruit flavours and wine.
Loki & Co was created by Stephen Dillon who brought his background as a wine expert and qualified beer sommellier to his love of craft spirits and drinks innovation.
His innovation – “sparkling Irish natural mineral water blended with natural fruit flavours and wine to produce a less sweet and more authentic drink at only 100 calories per 330ml bottle” – is low in calories, carbohydrates and sugars. It’s naturally gluten-free and aimed at drinkers “looking for an alternative to traditional RTDs and bland vodka & soda offerings”.
It’s initially available in three flavours – Apple & Elderflower, Red Berry and Orange & Mango – to the on- and off-trade.
In the US, the popularity of ‘hard seltzers’ is firmly established through several brands on the market, says Stephen who adds, “The success of craft beers & spirits has transformed the drinks industry. We believe that the RTD market has lagged behind in this area and there’s a significant opportunity for a new product that behaves in a more craft-like fashion.
“We see the Low Cal Seltzer launch as the first in a number of innovations in the pipeline – our ethos is to be completely consumer-focused identifying the different ‘need states’ of drinkers across both the alcohol and alcohol-free sectors.”
“Our initial focus is on building awareness in the Irish & UK on- & off-trade and this will involve working with distributors to get on shelf and in front of bars and restaurants.”
For sales enquiries contact: RTM Beverages on 01 9618922 or e-mail: Hello@Lokidrinks.com