RTDs: Market overview
According to Nielsen, sales of RTDs are down by 17 per cent in the year to May 2007. To the untrained eye it is yet another nail in the coffin for a category which has taken one hell of a battering in recent years. For many, quite simply it has gone from hero to zero.
But to suggest that the RTD category is dead and buried would be quite wrong. The statistics certainly show a large continued decline for RTDs - even more marked than beer, wine and spirits, which are not exactly setting the world on fire. But there are some brands that are proving to be quite robust - especially WKD and Vodka Kick (VK). The former now makes up almost 50 per cent of the on-trade market.
The immediate problems for the category lie elsewhere. Bacardi Breezer continues a slow, inexorable decline despite the introduction of its Half Sugar range. And while Smirnoff Ice continues to enjoy wide distribution, its sales are declining sharply (18 per cent year-on-year) and Diageo has not supported the brand with much above-the-line activity in recent times.
Indeed, talking of the world's largest drinks company, the big story of the year for RTDs was Diageo's decision in June to dump three of its recent launches: Quinn's, Slate 20 and Archers Vea. The loss of Quinn's was a particular shock, given how much time and money had been invested into the brand.
Customer needs
What this shows is that no matter how much marketing budget is thrown at the category, consumers' needs are pretty traditional. While Slate 20 tried to ape the mature Australian RTD market and get the dark spirits crowd into the category, and Quinn's tried to attract those interested in fresher ingredients, the RTD drinker didn't want anything to change. And they certainly weren't interested in being healthier - that's not why they go to the pub.
There is precedent for this. Globally speaking one of the big success stories for brewers has been the introduction of 'lite' beers - basically beers with lower calories. Some statistics suggest that lite beers now outsell regular versions in the US.
But lite or diet alcohol drinks simply do not capture the imagination in the UK - if people want to watch their weight, then they simply won't drink.
Bacardi will point to the relative success it has had with its Half Sugar range and the recent introduction of two new flavours (Tropical Coconut and Pomegranate), but the brand still lost two per cent market share year-on-year (up to May 2007).
When it has come to products such as Quinn's it appears that the consumer simply is not interested in bottled alcoholic beverages made from 100 per cent fruit.
