SHS Drinks head of brand marketing for alcohol Amanda Grabham outlined the performance of the different brands and sub-sectors within the RTD category, where there is both good and bad news.
RTDs in numbers:
Volume decline: 10.8%
Value decline: 9.2%
Volume decline across pubs: 35.2%
She said: “Traditional RTDs tend to be holding up relatively well but the significant fall off in alcoholic ginger beer sales – most alcoholic ginger beer brands in the top 10 RTDs are in double-digit decline – has been having a big impact on the overall performance of the pre-mix category.
“If you take alcoholic ginger beers out of the equation, the category looks in even better health.
“The taste of fruity alcoholic drinks are as popular and appealing as ever to young adults but, for the future health of the category, there is a need for brand owners to make RTDs’ image more relevant to the 18 to 24-year-old consumers and get them to reappraise the RTD category in a new and contemporary light.
“That is why we took the radical approach last year of reinventing WKD ‘for the now’ generation and launching NKD, which is aimed at broadening the appeal of WKD and attract new consumers to the RTD category.”
Decline in the category
The RTD category has declined by 10.8% in volume according to CGA Strategy's moving annual total (MAT), leading up to 31 December 2016.
Its value has also dropped, by 9.2%, with its original worth falling from £272m to £212m CGA’s figures revealed.
Overall, RTD volume has fallen by 35.2% across pubs, however, it has declined by just 9% in nightclubs.
CGA Strategy commercial director Graeme Loudon outlined the difficulties the category faces to stay relevant in today’s marketplace.
He said: “The category continues to diversify with well-known brands introducing new flavour variants to combat the competition from fruit ciders in the fridge.
“With consumers moving towards healthier lifestyles, some brands have introduced lower calorie ranges designed to be enjoyed as a food accompaniment.
“The biggest challenge for RTD suppliers is to continue to move the category forwards and stay relevant in today’s more premium marketplace.”
Loudon said there would be a move towards more sophisticated RTD cocktails with natural ingredients and more premium packaging to bring the category up to date.
He added: “Despite traditional RTDs being in decline, they still command 15% of all fridge space and remain a key component of most on-trade fridges.”
Global Brands, who own RTD drink VK, senior brand manager Christian Sarginson outlined performance of VK.
VK is in growth
He said: "Although the RTD category trend is in decline, VK is growing by 8% and has increased its category share from 17.5% to 21.5%.
"The number one student choice thrives on being recognisable and synonymous with its target audience’s lifestyle. This has allowed it to continue as the best–performing traditional RTD, going from -4.3% volume in February 2016 to +8% in October 2016. Connecting with their audience digitally keeps VK 100% relevant, meaning no need for a complete image change.
"Fruitier flavours are becoming increasingly popular and VK is the first and only traditional RTD to tap into these trends with its range of seven great tasting flavours. Having more flavours options has allowed VK to become the biggest overall RTD brand in nightclubs, at 66.7% (+7.8%) of all nightclub RTD volume and deliver an average of £147 cash ROS per week in nightclubs.
"VK is also the only traditional RTD available in five flavours (Blue, Orange & Passion Fruit, Apple & Mango, Tropical, Ice), which provides on trade venues a solution to glass without having to sacrifice flavours."
George Nightingale, owner of Spoken bar in Exmouth, Devon, only sells a limited selection of RTDs because his customers’ tastes have changed.
He said: “A few people drink Hooch but I have de-listed WKD because it doesn’t sell very well here.
“Five or so years ago, WKD was what everyone was drinking but tastes have overtaken it, people have moved on to wines and spirits.
“The youth are a lot more informed about certain drinks rather than RTDs and there is so much choice out there now, and people are making a more informed choice.”
Nightingale said due to a wider selection being available to consumers now, RTDs have been pushed out of the marketplace.
He added: “The range of drinks out there such as soft drinks, lagers, tonics and wine, wasn't there eight years ago so RTDs made the choice in venues very easy but now there is a better range than ever before.
“RTDs just sit in the noise of choice that is out there. Youngsters are moving on to wines and gins in the space of RTDs.”