New research from IWSR shows light spirit offerings, flavoured alcoholic beverages and hard seltzers driving RTD growth in Australia and stealing share from traditional dark spirit premixes.

According to IWSR, flavoured alcoholic beverages are reinventing themselves, surfing a wave of contrasting and apparently contradictory consumer trends: lower-calorie, higher-ABV, light and refreshing products on one hand; brightly-coloured, very sweet and low-ABV drinks on the other.

Meanwhile, hard seltzers are expected to continue to grow off a small base between 2022 and 2027.

“The hard seltzer segment is maturing rapidly, and is already replicating many of the NPD trends seen in the US, with recent launches focusing on higher ABVs and fuller-flavoured offerings,” said IWSR APAC Head of Research Sarah Campbell.

“The segment is expected to plateau, sustained by ongoing flavour innovation.”

Meanwhile, dark spirit-based drinks, which have come under pressure in the face of moderation trends, are reigniting interest through the launch of more zero-sugar and soda-based variants.

Considerations for future RTD growth

Australian consumers have historically been prepared to pay a premium for the convenience that RTD products offer, but there are concerns this may change.

IWSR consumer research from November 2023 shows that alcoholic products were one of the top FMCG categories where Australians were spending less.

“As excise rates continue to escalate – two increases at 3.7% and 2.2% in 2023, in line with CPI – there is the risk that the headline price of RTDs could become too high for some shoppers, forcing them to trade down within RTDs, or into other categories with a lower price per serve,” explained Campbell.

“There is early evidence of some RTDs being reformulated with lower ABVs, or offered in smaller pack sizes, in an attempt to maintain headline pricing. With RTDs having an already high price per serve, such changes look inevitable to avoid price ceilings and maintain the category’s recent dynamic growth.”