RTD canned cocktail market set for 6% CAGR growth by 2033
By Felicia Nwosu
The ready-to-drink (RTD) canned cocktail market is expected to grow at a 6% compound annual growth rate (CAGR) from 2023 to 2033, increasing from an estimated US$ 18.822 billion in 2023 to US$ 33.247 billion by 2033, according to a report by Future Market Insights.
The report revealed that this growth is driven by the premiumization trend in the food and beverage industry, which is pushing manufacturers to develop high-quality cocktails with a variety of flavour options.
It showed that previously, the market grew at a slower rate of 1.5% CAGR from 2018 to 2022, with its value rising from US$ 17.018 billion in 2018 to US$ 18.098 billion in 2022. The rising global demand for packaged food and beverages is a key driver of industry sales.
According to Future Market Insights, the growing popularity of RTD canned cocktails among Gen-Z and millennials is a significant factor in this market expansion, as these beverages offer a more convenient alternative to traditional spirits.
Manufacturers are responding to this demand by creating high-quality RTD canned cocktails in a variety of flavors, including sweet, tropical, and other unique combinations, with a hint of spirits.
In response to increasing environmental concerns, manufacturers are investing in smart and sustainable packaging solutions. Consumer preferences, especially in the food and beverage sector, are increasingly influenced by the availability of recyclable packaging.
To address this trend, RTD canned cocktail producers are introducing innovative packaging options that reduce plastic waste and are both cost-effective and eco-friendly. For instance, stackable and screwable cans, which allow up to 10 cans to be stacked with just a twist, have been developed to significantly reduce waste.
This design, exemplified by Corona and recognized by the Cannes Innovation Lions Award, is scalable and offers a promising solution in the global market.
There is also an indication that the global RTD market saw double-digit sales growth during the pandemic as health concerns led consumers to switch from higher-calorie drinks like beer, though this growth slowed to 2% annual volume growth in 2023, according to industry insights from IWSR. The demand for RTD canned cocktails is also linked to the expansion of the middle class and the modernization of lifestyles, with consumers increasingly favoring premium-grade alcoholic beverages.
However, manufacturers face challenges due to the complex regulatory environment. The Liquor Tax Act in many countries requires various licenses for selling alcoholic beverages, which can be a time-consuming process involving extensive legal documentation. In the UK, obtaining a license to sell alcohol requires around 14 different applications and approvals from 10 government offices. Additionally, alcohol taxes, which can reach up to 70% of the bottle price in some countries, along with high customs duties, add to the burden on producers.
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