Australia has always been one of the world’s top markets for ready to drink (RTD) beverages in the off-premise, but draught RTD brands are fast becoming a preferred choice for many on-premise consumers in Australia and New Zealand.
According to CGA by NIQ there has been a noticeable annual increase in how frequently consumers are choosing RTDs during on-premise visits:
- Australia – Almost half (49%) of RTD drinkers are enjoying RTDs every time or almost every time they go out, a jump from 39% year-on-year (YOY).
- New Zealand – 41% of RTD drinkers now drink RTDs every time or almost every time they visit the On Premise, up from 34% last year.
The shift is largely driven by the presence of much-loved brands in the RTD format, enabling consumers to enjoy familiar flavours in convenient, ready-to-drink options.
This is an especially strong motivator in New Zealand, with almost a third (30%) of consumers saying that the presence of their favourite brands as an RTD is their primary reason for choosing the category, (+7pp compared to the previous year). In contrast, this influence is slightly declining in Australia, (-1pp to 21%).
The untapped potential of tap/draught RTDs
According to CGA by NIQ, RTDs on tap is an area with compelling growth potential.
- Only 39% of consumers report seeing tap RTDs in the venues they regularly visit in New Zealand, -15pp versus Australia’s higher penetration rates.
- Consumers in both markets are particularly interested in tap/draught RTDs for high-energy social occasions, such as nights out with friends.
Draught RTDs offer an opportunity quick service and convenience, and many drinks companies are tapping into the trend.
Kirin Hyoketsu Lemon for example launched on tap to meet the consumer demand for RTD on tap as drinkers look for alternatives to beer.
Lion RTD brand director Penni Terrey told Food & Drink Business: “The RTD market on tap is seeing an exciting period of growth, with consumers continually seeking exciting, flavour-forward drinks on tap at their favourite venues.
“There was around six months of rigorous research and development, testing and tasting to ensure we had the recipe right for the final on tap product. We’re proud of what we have produced and confident it is as close to the ‘in can’ liquid as possible.”
Draught cocktails are also booming in the on-premise. Last year Diageo announced it was tackling the cost of living crisis by cutting the price of cocktails in pubs and serving them on tap featuring well-known spirit brands.
New Diageo MD Dan Hamilton told The Australian the drinks giant aimed to fit more than 200 pubs around Australia by the end of 2023 with cocktail taps to give consumers the opportunity to imbibe at competitive prices.
Called Draught Cocktails, the on-tap innovation enables bartenders to pour, garnish and serve up to six cocktails per minute. They include favourites such as Gordon’s Pink Martini, Smirnoff Passionfruit Martini, Captain Morgan Strawberry Daquiri and Smirnoff with Mr Black Espresso.
Where are RTDs most popular?
The appeal of RTDs varies by venue type, with nightclubs, bars, and pubs seeing different levels of adoption:
- New Zealand:
- Nightclubs – 35% (second most popular category)
- Bars – 24% (third most consumed category)
- Pubs – 13% (eighth most consumed category)
- Australia:
- Nightclubs – 25% (fifth most consumed category)
- Bars – 21% (fifth most consumed category)
- Pubs – 12% (eighth most consumed category)
The CGA by NIQ analysis shows RTDs gaining ground in venues where spirits have traditionally dominated. Ease of service is a key factor for this surge, making RTDs an attractive option for operators looking to boost efficiency while meeting consumer demand.
Tom Graham, Senior Manager – ANZ said: “The rise of RTDs in the Australian and New Zealand markets presents a striking opportunity for drinks brands and suppliers to expand their reach in the On Premise sector by providing the familiarity consumers crave, while providing venue operators with the many and varied benefits accompanying tap RTDs. It’s clear the key takeaway for industry stakeholders is to focus on innovation in order to meet consumer demand for recognition, taste and convenience.”