Coca-Cola & Anheuser-Busch Want in on the Canned Cocktail Craze
Americans’ Growing Affinity for Canned Cocktails
Americans consumed over 62 million cases of ready-to-drink spirits in 2023, an increase of almost 25% from 2022. They were the second-largest spirit category by volume, behind vodka.
The Rise of Canned Cocktails
Back in 2016, White Claw launched and took the U.S. by storm. The malt-based drink provided an alternative to light beer, and sales soared over the next five years. However, the market quickly became saturated.
Avoiding the Trap of Oversaturation
“You had a plethora of new brands coming in, an oversaturation of new flavor sophistication initiatives, so many flavors that it essentially started devaluing the core proposition of the brands. Consumers started getting confused, and they started taking a step back,” said Spiros Malandrakis, head of alcoholic drinks research at Euromonitor International.
Canned Cocktails on the Rise
Canned cocktails, drinks that include spirits like vodka, tequila, or gin rather than the malt liquor base of popular seltzers, have begun to take market share in the ready-to-drink alcoholic beverage category. From 2021 to 2023, malt-based drinks fell 8%, while spirits-based grew 8% in share of market volume.
The Players in the Game
More than half of the U.S. ready-to-drink spirits market is controlled by three brands, according to data from Nielsen and the National Alcohol Beverage Control Association. The biggest player, High Noon, is owned by Gallo, a winery that also owns brands like Barefoot and Andre. The other largest players, Cutwater and Nutrl, are owned by beer giant Anheuser-Busch InBev.
Avoiding the Beyond-Beer Segment
Still, the beyond-beer segment, which includes both malt- and spirits-based beverages, represents less than 5% of U.S. sales for AB InBev. It represents about 7% for Molson Coors.
Participation in the Canned Cocktail Craze
“You have a 5-year, 6-year, 7-year trend of beyond beer growth, which has been pretty exponential. But these companies’ stock prices have done very little during that timeframe. So you know they’re not participating in it,” said TD Cowen Managing Director Robert Moskow.
Coca-Cola’s Entrance into the Market
And it’s not just the beer giants who are now vying for share of the spirits industry. Coca-Cola has ventured into the alcoholic beverage space with a number of its popular soft drinks, including a partnership with Brown-Forman’s Jack Daniels whiskey to make a canned version of a bar classic.
The Future of Canned Cocktails
Watch the video to learn more about the rise of canned cocktails in the U.S.
Conclusion
The rise of canned cocktails has brought new excitement to the ready-to-drink spirits market. With the entrance of major players like Coca-Cola and Anheuser-Busch, it will be interesting to see how the market evolves in the coming years.
FAQs
Q: What is the current state of the ready-to-drink spirits market?
A: The market has seen significant growth, with an increase of almost 25% in 2023 compared to 2022.
Q: What is driving the growth of canned cocktails?
A: The rise of spirits-based drinks, which have grown 8% in share of market volume from 2021 to 2023, is driving the growth of the canned cocktail market.
Q: Who are the major players in the canned cocktail market?
A: High Noon, Cutwater, and Nutrl are the largest players in the market, with High Noon being the biggest player.
Q: What is Coca-Cola’s role in the canned cocktail market?
A: Coca-Cola has entered the market with a partnership with Brown-Forman’s Jack Daniels whiskey to make a canned version of a bar classic.
