Flight to Quality: Traditional Mixers Hope RTD Cocktails are a Stepping Stone for the Next Generation of Drinkers

If you haven’t heard by now, word on the street is that consumers aren’t drinking so much alcohol these days. So in a world where booze is in decline, what’s a cocktail mixer brand to do?

According to Circana, a Chicago-based market research firm, the $794.2 million cocktail mix category declined by 8.8% in the 52-week period ending December 29, 2024 in U.S. MULO and c-store accounts. Within that set, liquid mixers were down 1% to $404.7 million, while tonic waters and club sodas dropped a steep 16.5% to $377.9 million; although the significantly smaller powdered cocktail mix subcategory was up 26% to $11.5 million.

That slide in mixer sales is coinciding with a sharp rise in adult non-alcoholic (ANA) alternatives like zero proof spirits, non-alc beer, and the so-called “California sober” lifestyle with THC beverages. It’s also not just whether or not consumers are still drinking, but it’s also how they are drinking as those who still turn to alcohol to unwind are also adopting new products like ready-to-drink cocktails and spiked seltzers.

ANA is looking to become a $4 billion category by 2028, according to a report by beverage data firm IWSR – but just because some drinkers are going dry doesn’t mean mixer sales have to dry up as well.

Premium mixer brands have, for several years, embraced a multi-faceted identity, from pitching their drinks as both cocktail ingredients and as standalone refreshment to adopting a mocktail-positive approach. Betsy Frost, CEO of premium brand Q Drinks, said that the category now needs to go beyond even the mocktail occasion, transforming from a product intended to “elevate the cocktail experience” into a product that will “elevate all drink experiences,” whether it’s an after-work margarita or turning the afternoon java break into a sparkling cold brew occasion.

“Even though alcohol purchases are going down, penetration against premium alcohol versus premium mixers is still one to four, essentially,” said Frost, who joined Q Drinks in December after two years as CEO of another ANA brand, HopTea producer Hoplark.

“People are drinking less across the board, [but] when they are drinking they want it to be a better experience,” she added. “There’s still a lot of runway for premium mixers as it sits today.”

For Q, this new focus can extend the brand into new territory (and new channels), such as a partnership with Peet’s to serve the aforementioned sparkling coffees at the company’s brick-and-mortar cafe locations.

ANA Shuffles Sets

By necessity, the rise of ANA has meant changes to the store shelf as retailers have embraced the trend and built new sets. For mixers, the shuffle has so far brought mixed results and varies from store to store, Frost said, but with change comes opportunity.

Brandy Rand, founder and CEO of advisory firm Thirstwell, told BevNET via email that most retailers still separate traditional mixer brands away from ANA sets, but “where the blur tends to happen is around NA canned RTDs that might have the same flavor profile as a line of more premium mixers.”

“Most adult NA brands promote being consumed on their own, many with functional ingredients, which is distinct from pure play mixer brands,” Rand wrote.

“What’s interesting is that a lot of consumers, especially Gen Z, report choosing adult non-alcoholic as a trade-up to soda or water,” she added. “This is where the premium aspects come into play – you want something that feels a bit more sophisticated for an alcohol occasion (but without the alcohol). And for those consumers who are replacing a glass of wine or beer or cocktail with adult NA, they want the flavor and feel of a ‘real’ drink. If we look at the impact premiumization has had on the alcohol industry over the past 20 years, it’s clear people are willing to pay more for quality beverage products as an affordable indulgence.”

Even if the premium products don’t have booze. At premium mixer brand Fever-Tree – which recently sold a minority stake to beer giant Molson Coors – Charles Gibb, CEO of Fever Tree North America, said that partnering with ANA spirits brands like Seedlip and Ritual Zero Proof has allowed it to more regularly showcase its mixers alongside those products in grocery stores.

“For us, the rise of non-alc and the growing interest in non-alc is, if you like, another string to our bow,” he said.

Beyond ANA, there’s even some competition for facings from emerging categories like functional CSDs, which are quickly eating up shelf space in conventional outlets. There’s also more competition from rising brands within the premium mixer set such as Blake Lively’s Betty Buzz.

To keep up to date, the established brands have embraced new packaging: Fever-Tree has introduced cans alongside its classic glass bottle format, while Frost said that Q will be unveiling a new pack later this year.

“It really is about inspiring the making and the inspiration of the drink and the occasions,” Frost said of the forthcoming refresh. “It’s bringing that into new apertures to give people more inspiration to create at different times of the year.”

To Mix or Not to Mix

It’s not just NA that’s changing the game for mixers. The category must also now contend with the rise of alcoholic RTD cocktails which manage to provide an even more convenient form factor than canned mixers (after all, why open two containers when you could just crack open one?) In its RTDs Strategic Study 2024, IWSR reported that alcoholic ready-to-drink beverages “are increasingly viewed as an affordable alternative to spirits, beer and wine” and are on track to continue seizing share of the total beverage alcohol market in the coming years.

In the U.S., RTD volume sales are expected to grow at a CAGR of 3% between 2023 and 2028, with “hard tea, FABs [flavored alcoholic beverages] and cocktails/long drinks” expected to be the strongest volume drivers, even as overall growth of the segment slows and new innovation becomes less important to the set.

“While the pace of innovation has tailed off, volumes continue to grow as we see less reliance on innovation to drive performance, and consumers wanting to minimise risk on new products they do not know,” Susie Goldspink, Head of RTD Insights, IWSR, said in a statement announcing the report last year. “At the same time, effective flavour options and variety packs are helping to sustain growth in many markets, especially among younger consumers – and innovation remains key to engaging with this age cohort.”

Citing NielsenIQ data for the 52-weeks ending December 28, 2024, Brian Krueger, VP business development and portfolio strategy at Bump Williams Consulting, said that RTD cocktails grew 19.5% last year, while ready-to-serve drinks were up 8% – rising a total of $411 million to over $2.5 billion in retail sales in xAOC, liquor and convenience. That mounted up to a 1.3 point gain in market share of the total alcohol market, drawing primarily from whiskey (0.7 points) and vodka (0.6 points).

But does this segment pose any real threat for mixers?

While consumers are certainly slowing down their drinking – particularly beer – Bump Williams Consulting president Dave Williams said that the decline is not as dramatic as it’s sometimes been portrayed but rather what we’re experiencing is “more about shifting around what people are drinking.”

“I certainly think some of that ties into mixers because traditional spirits were sort of emerging as the winner in this beverage alcohol battle,” Williams said. “What we’ve been seeing recently, though, is that shift in how a lot of these consumers – whether they’re traditional spirits drinkers or whether they’re beer drinkers shifting into spirits – are going after more of these ready-to-drink and, to a lesser extent, ready-to-serve type options.”

While premium mixer brands acknowledge the competition from RTDs, they feel strongly that in the end quality will win out over a slightly more convenient form factor.

According to Frost, Q recently completed a source of volume study which found that the mixer brand was actually taking consumers away from RTD cocktails, and suggested that some people may be introduced to cocktail culture through the convenient canned products but later become interested in mixing their own drinks at home.

“I think what you’ll start to find is you don’t get the full quality, or the most robust or full experience, in ready-to-drink,” she said. “There will be a moment where people come back and they’re like ‘Oh, my God, it’s not that hard to make my own. It’s just two steps, or it’s just three steps, and the experience I get is so much better.’”

At Fever-Tree, Gibb said that data shows alcohol RTDs primarily source volume “first from beer, second from wine and third from spirits,” retaining an edge for mixers, even as the convenience factor means it’s “definitely a factor that’s out there” when it comes to evolving habits, but it’s not yet a “major” factor for the brand.

“They’re having an effect on the market, there’s no doubt about that, because everybody’s very excited about them,” Gibb said. “They’re taking up an awful lot of space in retail. They’re taking a lot of focus in retail. But again, when you look at the brands that are really working, there’s really only one or two in each of those categories, and everything else is very small by comparison.”

Williams concurred that alcoholic RTDs are “certainly seeing more adds than deletes” in retail, but the slowdown in innovation has meant retailers are able to prioritize higher performing brands.

And although spirits like whiskey and vodka may be losing share, tequila continues to rise and top brands like Tito’s are holding steady, with vodka overall still performing well, he added – which presents one possible path forward for mixer brands when it comes to sorting their priorities.