Dynamic RTDs: The Bright Spot in a Shifting Beverage Alcohol Market
Despite global economic headwinds, the RTD market stands out as one of the most dynamic segments in beverage alcohol. Consumers are not only drinking RTDs more frequently, but they’re also expanding the ways and places they consume them — creating steady growth opportunities for producers worldwide.
According to IWSR’s RTDs Strategic Study 2025, volumes across the top 10 markets — which include the US, UK, Japan, Brazil, and South Africa — grew by 2% in 2024, with a 4% increase in value. Together, these countries represent 82% of global RTD volumes. The category now accounts for 3.5% of total beverage alcohol (TBA) servings, up from just 1.1% in 2014.
“RTDs remain a beacon of hope in an increasingly competitive market,” said Susie Goldspink, Head of RTD Insights at IWSR. “Established markets with strong RTD shares, like the US, Canada, and Japan, will continue leading growth as consumer diversity and product innovation expand.”
Regional Highlights: South Africa and Brazil Lead the Charge
While growth has moderated from its pre-pandemic surge, the RTD market continues to outperform most beverage categories. In 2024, South Africa and Brazil posted the strongest growth, each up 12%, while China (-14%) and Australia (-6%) experienced declines due to broader structural challenges in alcohol consumption.
IWSR forecasts that by 2029, RTDs will hold 4% of global TBA servings, up from 2% in 2019. The strongest growth is expected in the US (+1% CAGR), South Africa (+3%), Brazil (+7%), and Japan (+3%).
Goldspink cautioned that some markets face pricing and demographic challenges: “In places like Australia, the UK, and Germany, higher prices, aging populations, and lower consumption frequency limit long-term potential.”
Younger Drinkers Drive the RTD Market
The RTD market has shifted from recruiting new consumers to increasing drinking frequency among existing ones — particularly Gen Z and Millennials. Only 5% of RTD drinkers in 2024 were new to the category, mostly those just reaching legal drinking age.
“Contrary to past assumptions, younger consumers aren’t moderating — they’re actually drinking RTDs more often,” Goldspink said. Over half of Gen Z (54%) and Millennials (56%) consume RTDs weekly, compared to 46% of Gen X and 38% of Boomers.
This generational divide highlights the importance of creating modern, occasion-based experiences that align with younger consumers’ social and lifestyle habits.
Flavors, Innovation, and the Power of Choice
Flavor continues to dominate purchase decisions in the RTD market, surpassing price as the top driver — especially among younger audiences. Citrus, particularly lemon, remains the leading flavor, while tropical and strawberry variants are gaining traction.
“Flavor is the cornerstone of RTD appeal,” Goldspink explained. “But we’re also seeing alcohol content play a larger role. Consumers are exploring both high-ABV and low-ABV options, and brands need to innovate accordingly.”
Producers that diversify strength levels — from light, sessionable drinks to bolder offerings — are better positioned to capture different consumption occasions.
RTDs’ Growing Impact on Wine and Beer
The RTD market continues to draw drinkers away from wine more than beer. Since 2019, RTDs have slowed beer’s decline but accelerated the shift from wine across most markets.
“The overlap between canned wine and RTDs is expanding,” Goldspink noted. “Both share similar packaging, convenience, and branding cues. That convergence could offer struggling wine producers a way to tap into RTD-style appeal.”
This blending of formats presents both competition and collaboration opportunities, especially for brands that can merge wine’s sophistication with RTD accessibility.
Channels Expand Beyond Retail
As the RTD market matures, distribution is diversifying. The on-trade share of RTD sales across the top 10 markets grew from 8% in 2021 to 12% in 2024, driven by rising demand in Brazil (37%) and South Africa (30%).
RTDs are also gaining traction in ecommerce and on-the-go channels, appealing to younger consumers who value convenience and spontaneity. This shift reflects a broader transformation in how people buy and enjoy beverage alcohol — anytime, anywhere.
Brand Extensions: Strategic or Risky?
IWSR’s research found that RTD spin-offs of well-known spirits brands attract strong consumer interest. However, this strategy comes with a caveat.
“Consumers view these extensions as fun and approachable,” Goldspink said, “but they can dilute a premium brand’s image.” She suggests that mainstream brands, rather than luxury labels, may be better suited to RTD expansion.
The Outlook: Bright but Competitive
While global beverage alcohol faces tightening margins, the RTD market continues to show resilience. Its ability to adapt — through flavor innovation, diverse formats, and generational engagement — makes it one of the most promising segments for sustained growth.
As Goldspink summarized: “RTDs are not just a trend; they’re an evolution of how people experience alcohol. The key now is for brands to keep pace with the consumer — not the other way around.”
Original research and commentary from IWSR’s RTDs Strategic Study 2025.
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Source of Information
This article is based on the IWSR’s Strategic Study 2025: Dynamic RTDs ‘a beacon of hope’ for beverage alcohol
The image of the article is courtesy of ©DoroO via Canva.com
