RTD focus: What would licensees like to see?

Last week we heard from the RTD brand owners. This week it's the turn of the licensees. By Adam Withrington.

Despite AC Nielsen statistics showing a 19 per cent year-on-year fall in RTD sales and signs that companies like Coors Brewers (through its Reef brand) are looking to get out of the category, things still look rosy for the RTD sector.

Last week we heard RTD brand owners say that, despite the current lull in sales, RTDs were consolidating and ready to grow back into something like their old self.

But they would say that, wouldn't they? David Peregrine, licensee of the Wheatsheaf in central London, says the brand owners are putting a very positive spin on things.

"The fact is RTDs are disappearing," says David. "While a brand like Smirnoff Ice is holding its own, Reef is now only selling a case a month. Five to six years ago we were stocking a range of between three to four brands. Now we will just stick with Smirnoff Ice. If the Bacardi or Diageo reps come to the pub and try and persuade us to use new POS for Bacardi Breezer or Archers Aqua I will tell that I'm just not interested."

Recently pub company Sam Smith's decided to stop serving RTDs in its estate altogether.

Brand owners can come up with figures and charts to prove anything - it is the licensees, managers and barstaff that can give you some idea of the real story.

So I have gathered together 85 responses from a Publican questionnaire on RTDs, as well as four case studies, to gauge some form of insight into what the category looks like from the "shop floor". This is by no means a definitive view - but it has thrown up some interesting responses.

1. Which RTDs do you currently stock?​

• Smirnoff Ice:​ 91 per cent
• WKD:​ 79 per cent
• Bacardi Breezer:​ 54 per cent
• Vodka Kick:​ 25 per cent
• Reef:​ 41 per cent
• Red Square Reloaded:​ 16 per cent
• Vodka Mudshake:​ 25 per cent
• Archers Vea:​ 14 per cent
• Other:​ 40 per cent

There is no doubt at all that Smirnoff Ice is the number one brand in the RTD market. It is admitted by rival brand owners and is top of any set of statistics you wish to see.

Despite the rumours of a sale, Reef shows that it is still punching its weight. The majority of the "other" is surely made up of Archers Aqua, which is the one main brand missed on the list.

2. Did you stock more RTD brands three years ago?​

• Yes:​ 53 per cent
• No:​ 47 per cent

This is an expected result but not, perhaps, by the margin anticipated. When the RTD manufacturers talk of massive consolidation, you expect the number of brands stocked compared with three years ago to have dropped dramatically.

This doesn't appear to have happened, perhaps suggesting consolidation has been taking place for some time.

3. If yes, why is the number less now?​

A selection of responses:

• "Can't sell them"
• "Demand has declined dramatically in the last three years"
• "Fashion has changed"
• "Flavours have fallen out of favour/out of fashion"
• "Increasing sales of spirits and mixers"
• "Consolidation/emergence of category leaders"
• "Not premium enough"
• "Demand for new types of RTD" (e.g. Mudshakes)
• "RTDs seem to be launched in a blaze of publicity, then forgotten. Add to this the fact that most of my RTD drinking customers will drink the newest brand for a couple of weeks, then get sick of it and I end up with two to three cases which have to be almost given away just to make room for the next one. Now they get replaced with bottled beers - because they sell."

4. Broadly speaking, which type of consumer orders RTDs?​

• Young women (18-25):​ 93 per cent
• Older women:​ 5 per cent
• Young men (18-25):​ 1 per cent
• Older men:​ 1 per cent

This is hardly surprising but may dismay brand owners who continue to come up with very male-centric advertising (e.g. WKD and Smirnoff Ice). Despite obviously wanting men to drink their product, our sample suggests few are.

5. Do you think it is important to stock a full range of flavours of RTDs?​

• Yes:​ 32 per cent
• No:​ 68 per cent

The days of brand owners (particularly Bacardi Breezer) insisting the best way to increase sales was to stock the full range of its flavours are long gone and licensees appear to have cottoned onto this.

6. Does stocking many flavours make a difference to sales?​

A selection of responses:

• "Wine has had a real impact on sales"
• "Certain flavours dominate"
• "The big names sell, others don't"
• "There is little brand loyalty in RTDs"
• "Some flavours sell, others just take up space."

7. Would you like to see more innovation in the RTD ​market?​

Yes - a selection of responses​

• "Bring in more bourbon/cola, rum/cola mixes like in Australia and New Zealand"
• "Keep it coming. It is a lively category and meets the needs of a variety of consumers"
• "Yes, but not so much to do with new flavours but with different alcohol - the market as it stands is hugely vodka based"
• "Definitely - at the moment it's the same old vodka+ flavour!"
• "Mudshake has been the only new innovation in the market"

No - a selection of responses​

• "The category may be past redemption"
• "Most long drinks are cheaper and easier to make using spirits and mixers"
• "No. Cut back!"

8. Which new types of RTD interest you?​

• Milk-based:​ 24 per cent
• Bourbon-based:​ 41 per cent
• Cocktail-style RTDs:​ 64 per cent

This is a very interesting response, with respondents perhaps eager to see something for cocktail hungry consumers in their pubs, despite the failure of RTD cocktails - such as Reef cocktails - to really catch on in the past.

9. Are RTD sales key to your business?​

• Yes:​ 37 per cent
• No:​ 63 per cent

Perhaps the most stark fact for brand owners - RTDs do not matter to a great many licensees. This is the key point licensees will keep at the forefront of their minds when looking to the future. Here and now RTDs only work in the right venue. You could be better served with something else in your back-bar fridges.

10. How do RTD sales perform in comparison to:​

Some s