IWSR is predicting the Australian seltzer market will grow 24% by 2025, driven by consumer demand for flavourful drinks with “better-for-you” attributes.
The leading source of data and analysis on the beverage alcohol market projects that hard seltzers will account for half of all global RTD volumes by 2025.
“Hard seltzer volumes outside the US are small, but awareness is also low,” said Brandy Rand, COO of the Americas at IWSR Drinks Market Analysis.
“As that awareness grows, we’re seeing that people are increasingly willing to consider trying these products,” says Rand. “It’s important to remember that it took a few years for hard seltzers to catch on in America, and we’re still in early days in this category outside the US.”
IWSR consumer research shows that more than half of RTD drinkers (56%) say that the regular release of new RTD flavours is the most important factor in establishing a premium image, followed by connection to a known brand (the value of brand extensions), and the use of innovative packaging.
Flavour is also the key driver influencing purchase of RTDs, preferred by almost 70% of consumers. IWSR research also shows that there is a clear preference among consumers for spirit-based RTDs in most markets, as these generally have connotations of superior quality (vodka in particular is highly favoured as a base), though malt-based products are gaining share as well, driven of course by the rise of hard seltzers.
Hard seltzer market forecasted to remain primary driver of RTD volumes
RTD volumes have been growing faster than any other major drinks category since 2018, and are expected to significantly outperform the wider beverage alcohol market over the next five years, increasing their market share to 8% by 2025 (from about 4% share in 2020) in top RTD markets.
IWSR forecasts an approximate +15% compound annual growth rate from 2020 to 2025 for RTDs across 10 focus markets, compared to about +1% CAGR for total beverage alcohol during that same period. The 10 focus markets (Australia, Brazil, Canada, China, Germany, Japan, Mexico, South Africa, UK, and US) represent more than 85% of all RTD volumes worldwide.
“RTDs are still growing at higher rates than spirits, wine, and beer, signalling a major shift in consumer interest in this category across all demographics,” says B“But it’s important to note that RTDs aren’t only stealing share from beer, they’re also attracting spirits consumers in markets such as Australia and the UK, and cider drinkers in South Africa. We’re also seeing a significant premiumisation trend in RTDs as more and more new brands enter the space.”
RTDs have proven to be an effective opportunity for companies and brands from across the full spectrum of the drinks market. For example, brewers and soft drink companies have found particular opportunities in the hard seltzer market, becoming a major driving force behind that sub-category’s recent growth. Spirits and wine producers too have leveraged their existing brand awareness and equity to move into RTDs, from pre-mixed cocktails to hard seltzers to wine spritzes and coolers.
“It’s not just consumers who benefit from interesting and innovative RTD products, so too do global drinks companies,” Rand said. “More than any other category, RTDs have truly captured and leveraged the trend of convergence in the beverage industry. Many well-known brands, from water to energy drinks to coffee, have recently crossed over into alcoholic RTDs, leading to a number of strategic partnerships between soft drinks, beer, and spirits companies in order to successfully leverage distribution across multiple outlets.”