RTD Growth Drives Spirits Sales

By Andrew Starke

The RTD sector has shrugged off the Federal Government’s tax hike and bad publicity to drive growth across the industry.

Australian off-premise spirits sales rose eight percent in June compared to the same month a year earlier, led by a 13 percent surge in sales of RTDs and cider, according to market research firm AC Nielsen.

Distilled Spirits Industry Council of Australia (DSICA) information and research manager, Stephen Riden, said the body had always known that taxing the RTD sector would initially lead to consumers looking to other liquor categories for substitutes.

“However, it would appear that the RTD sector is now undergoing a correction as consumers return to their favourite brands despite the tax,” he said.

A spokesperson for Independent Distillers, Matt Salter, said the company had definitely seen the category returning to growth ‘as we cycle over the excise change date of last year’.

“Woodstock, Cruiser, Red Bear and Pulse all outstripped the 13% growth rate quoted in ex-factory sales,” he said. “It is a difficult period to analyse as the immediate impact on the category last year was significant and it is hard to build a trend for year on year comparisons because there are so many variable elements.”

Diageo Australia’s marketing director John Green said the global drinks giant was committed to the long-term sustainability of the RTD category for the retailer.

“The category is well established in Australia, having been around for the last 30 years,” he said. “RTDs are consumed as the format of choice by a cross section of adults, both men and women, who have continued to purchase RTDs since the tax change. The RTD category is back in growth and presents a huge opportunity for the retailer.”

Diageo’s RTDs leverage off strong trademarks such as Bundaberg Rum, Johnnie Walker and Smirnoff.

“Since the introduction of the tax we have seen the top RTD brands account for the majority of sales,” said Green. “Innovation has been, and continues to be, a key RTD category growth driver.”