RTDs record most significant growth in nearly a decade

11 April, 2018 by Andy Young

The recently-launched State of the Industry Report from the Australian Liquor Stores Association and IRI has highlighted 2017 as a standout year for the ready-to-drink (RTD) category.

The report shows that the category recorded the most significant growth it has seen in nearly a decade, since Kevin Rudd’s cash grab on the category in 2008.

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According to the ALSA-IRI report, in 2017 the dollars, units and litres all reversed the negative growth trajectory that was seen in 2016.

The dollar value of the category increased by 4.1 per cent in 2017, having been down one per cent in 2016, volume was up by 2.2 per cent in 2017 having been down two per cent in previous years and units were up 0.7 per cent, having previously been down 0.1 per cent.

Overall the RTD category is now worth $2.4bn, with the dollar growth in 2017 equating to nearly $94m in additional sales.

In terms of the brands driving that growth, while Canadian Club has maintained its growth, Jack Daniel’s has turned a 2016 decline into 2017 and Bundaberg Rum has also arrested a 2016 decline with growth in 2017.

The report highlights many positives for the category, saying: “RTD’s strong showing was propelled by growth across states, especially the Eastern Seaboard. Only WA declined, but the deceleration was lower than the near double-digit declines of 2016.

“The significant turnaround in Queensland was shaped by the category’s fifth largest growth-generating brand, Lazy Bear. Improved growth in New South Wales and Victoria, which collectively account for 50 per cent share of dollar sales, generated a combined $54m in growth.

“Queensland’s 6.1 per cent dollar growth was the fastest of all state markets and stands out all the more given the one per cent contraction in 2016.”

The turnaround presents a strong growth opportunity for retailers and the April issue of National Liquor News features the category and how retailers can make the most of this growth opportunity.

In that, Jack Daniel’s RTD Brand manager, Erin Kerr, said: “In the last year we have cemented Jack Daniel’s as the most valuable RTD trademark in Australia; Jack Daniel’s has outperformed the category over the past 12 months.

“Our promotional plans for the coming year are focused on inspiring and exciting consumers by reinforcing what makes Jack Daniel’s so special and that’s our home place – Lynchburg, Tennessee. In-store we’ll be leveraging this to tie Jack Daniel’s RTD to occasions where RTD is most relevant for consumers including barbeques over summer and social gatherings over the festive season.”

For more from Kerr, as well as comment from Diageo, SouthTrade International and Vok Beverages on the RTD category and the opportunities for retailers, see the April issue of National Liquor News.