Marketing

RTDs & PPS – making the most of ‘category blur’

Ready-To-Drinks have consistently evolved, adapted and innovated to find new ways of fulfilling consumers’ needs,” stated IWSR in a recent global report on the subject. This can best be seen in the developing tendency towards ‘category blur’. We take a look at the RTD/PPS market.

The Ready To Drink/Premium Packaged Spirits market has been a major beneficiary of the trend towards ‘category blur’ so that not only can one find spirits mixed with beers in a single unit, one can also find spirits mixed with cider and even spirits mixed with wine.

In its Global RTD & Cider Insights report 2018, IWSR points out that RTDs allow emerging market consumers to enjoy the status of an international brand name at a fraction of the bottle price.

“The accessible price point of the range encourages shoppers to trial different types of premixed drinks without having to commit to a full-size spirits bottle,” it argues.

 

Category Blur

“Category blur is a major trend across the drinks sector and nothing exemplifies this more than pre-mixed drinks which borrows from different drinks categories,” states IWSR, “This helps to generate a consumer appeal that transcends the traditional boundaries of those categories”.

Category blur is already a major factor in the RTD space and this is only likely to grow in the years to come as the lines between spirits, beer, cider and wine become less and less clear – reflecting shifting consumer demand.

But the RTD/PPS category remains the preserve of the young person, a category constantly diversifying to match new trends.

Few beverage categories have the versatility and adaptability of RTDs. They can evolve in tune with shifting trends and open up their parent brands to fresh demographics and drinking occasions, observes IWSR. These include outdoor events such as concerts and sporting occasions historically dominated by the brewers.

The off-trade continued to account for the majority of sales of RTDs/high-strength premixes in 2016, according to market research provider Euromonitor International, commanding a 57% volume share of the Irish market.

 

No cannibals need apply

In the early days of RTDs, marketers were concerned that they might cannibalise sales of the full-strength parent brand, states IWSR, “There was also the related questions about the impact of RTDs on the brand equity of the parent brand.  

Previously, some feared that RTD offshoots might cannibalise the sales of their parent brands; now it’s increasingly recognised that these products are a positive, building awareness and breaking into new categories and demographic groups.

IWSR believes that the evidence today is that well- executed RTDs can enhance both the sales and image of the parent brand.”

What’s more, IWSR points out that RTDs can also help expose more male-oriented brands to different demographics.

 

Three big trends

Globally, three of the more identifiable trends when it comes to product innovation among RTDs are new flavours, premiumisation and low calorie.

In its Rtds/High-Strength Premixes in Ireland country report last June market research provider Euromonitor International stated that the off-trade suffered a heavier volume decline than the on-trade in 2016. This can be largely attributed to a lack of in-store marketing for RTDs/high-strength premixes, thus consumers opted for other products such as wine and spirits.

But one of the strengths of the RTD sector is the widespread participation by spirits, wine and beer players, argues the IWSR, “This guarantees a tremendous critical mass of investment around the category. It also ensures a tremendous amount of competition”.

The health labelling of products could have discouraged consumers from drinking the category’s current offerings however, the category is likely to be bolstered by a response from manufacturers to cater for consumer demand for lower calorie and lower sugar products, with the makers of the WKD and Loki & Co brands, for example,  already announcing lower calorie products are due to be launched at the end of 2017.

 

WKD invests for growth in the RTD category

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WKD has reigned as Ireland’s top-selling traditional RTD for over a decade and at almost double the size of any other RTD brand it remains the undisputed category-leader and a must-stock for both the on-trade and off-trade.

Owned by SHS Drinks, innovative New Product Development and ground-breaking marketing support have driven the success of this €116 million brand, ensuring that WKD remains fresh and relevant to its core 18 to 24 year-old target market.

Last year marked the launch of lower calorie NKD variants. Two contemporary flavour combinations – Lemon & Lime and Blueberry & Elderflower – have the same 4.0% ABV as WKD but a lighter taste profile and contain only 95 calories per 275ml bottle.

Innovation continues to thrive with the launch of WKD Mango Crush supported by a programme of telesales drives, consumer sampling activity, student-specific promotional support and a huge social media campaign. The new flavour will also be a key part of the brand’s programme of activity at Summer festivals with plans in place to reach a captive audience of over 100,000 students in Ireland.

 

Loki & Co – Where Low is Key!

Loki & Co claims its exciting new drink range is set to shake up the RTD category this Summer.  With consumers becoming ever more health- and calorie-aware Loki & Co provides the perfect solution. This low calorie ‘Seltzer’, made with sparkling Irish natural mineral water blended with natural fruit flavours and wine, produces a less sweet and more authentic 4% ABV drink at only 85 calories per 275ml bottle.

The drink is also low in carbohydrates and sugars and is naturally gluten-free. It’s aimed at those looking for an alternative to traditional RTDs.

Loki & Co comes in a 275ml bottle, initially available in three flavours – Apple & Elderflower, Strawberry & Lime and Orange & Mango.

“The ‘Low Cal Seltzer’ launch is the first in a number of innovations that are in the pipeline,” states the Irish startup company behind Loki & Co, RTM Beverages, “Our ethos is to be completely consumer-focused identifying the different ‘need states’ of drinkers across both the alcohol and alcohol-free sectors.”

Despite being less than a year old Loki & Co has enjoyed considerable success with distribution agreements in place in the UK and Europe. Loki & Co is represented in Ireland by Richmond Marketing.

For sales enquiries contact: Richmond Marketing or e-mail: Hello@Lokidrinks.com

www.Lokidrinks.com

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