After a category-wide downturn this year, one global spirits company is championing its portfolio of ready-to-drink cocktails as the silver lining of 2023.
“As I reflect on 2023, RTDs have been a bright spot in what has been a bit of a tumultuous reset year for the spirits category,” said Heather Boyd, managing director of RTD at Beam Suntory, told BevNET last week.
The owner of Maker’s Mark and Jim Beam will continue to bet on premium bottled cocktails, said Boyd, who took on the role in 2021. The company acquired its flagship RTD, On The Rocks, three years ago and took a minority stake in Jennifer Lopez’s Delola earlier this year.
On The Rocks surpassed 6000,000 nine-liter cases and holds the number five spot in off-premise prepared cocktail sales in the last 52 weeks ending December 12, according to NIQ. Boyd said the brand’s growth has benefited from a focus on travel and leisure channels, which double as brand builders.
“Having people memorably discover the brand when they’re in these leisure moments and open to discovery has created an incredible connection moment for the brand,” she said.
The brand was early to prioritize airlines, golf courses and hotels before the dawn of the RTD boom, and was initially inspired by conversations between Rocco Milano, a former bartender and On The Rocks co-founder, and Virgin America’s food and beverage team. Now, those sales channels double as category education, reducing the marketing and sampling dollars that would be otherwise spent on promoting that “this level of craft exists in a format that is a grab-and-go,” said Boyd.
“I view the channel first and foremost as a consumer connection and memorable sampling opportunity,” she said.
The Beam Suntory strategy is to build brands that can also support their own innovation platforms, said Boyd; On The Rocks, for example, provides a sandbox for its mixologists to play with trends in the cocktail world. Limited edition drops, such as the Midori Sour and the White Negroni released in 2023, will continue into the new year. Some core SKUs will also get refreshed, such as the Hemingway Daiquiri’s redo for mass-appeal as a strawberry Daiquiri. Another tropical 2024 addition includes a Blue Hawaiian made with Beam Suntory’s Cruzan rum.
Delola, which launched in May aimed at the trade-up opportunity in the ready-to-serve segment, taps different occasions and consumers, said Boyd. The three 750ml Spritz SKUs, which are lighter in ABV (10.5-11.5%) and calories, offered retailers and distributors an opportunity to “premiumize and grow a new exciting segment in the store.”
The brand launched this year and has already surpassed 40,000 cases in sales. Expanding distribution is priority in 2024, with the company planning to drive trial with smaller 375ml sizes.
The canned segment of Beam Suntory’s RTD portfolio will also gain an addition in 2024: -196, a Japanese canned chu-hi cocktail, will expand beyond its four U.S. trial markets into 15. Positioning the fruit-forward RTD as an antidote to seltzer fatigue, the brand found success in regions with higher Japanese populations such as Southern California and Hawaii, and passed total market litmus tests in Ohio and Illinois according to Boyd.
Expect to see malt-based cans in more markets too.
“We are leveraging our equities through our partnership with Boston Beer on the flavored malt beverage side,” said Boyd.
The company debuted Jim Beam Kentucky Coolers last year and will continue to expand that proposition, she said. The coolers have provided a recruitment tool for new consumers and have found traction in heartland markets where the Jim Beam brand is strong.