The growth of spirits-based ready-to-drink cocktails (RTDs) may be slowing. However, the segment’s impact on the beer category is far from abating, according to bev-alc consulting and data firm 3 Tier Beverages.
Spirits-based RTD growth peaked in 2020, with dollar sales growth of more than 150% in NIQ-tracked off-premise channels (total U.S. xAOC plus liquor plus convenience), 3 Tier Beverages consultant Erin McVickers shared in a webinar last week. Growth then progressively slowed, but the segment was still able to more than double dollar sales from 2021 (nearly $1.53 billion) to 2024 (nearly $3.19 billion).
Now through the first seven months of 2025, that growth is notably smaller, but consistent with 2024. In the last 52 weeks (L52W) through July 12, spirits-based RTDs have recorded nearly $3.46 billion in dollar sales.
That slowed growth is in spite of continued increases in the number of spirits-based RTDs available in the market. In 2021, the segment had 1,950 UPCs selling in NIQ-tracked channels. That number grew to 2,374 in 2022, 2,743 in 2023 and 3,003 in 2024, McVickers reported. In the L52W, that number has increased slightly, to 3,098.
“If you walk down that ready-to-drink cold aisle at the store, or the warmer aisle, it’s clear that there are a lot to choose from, and it begs that question of, are they becoming overwhelmed?” McVickers said.
“And at what point are retailers going to start rationalizing SKUs and removing the low performers?” she continued. “And I’m sure, to some extent, depending on which retailer you’re working with, it probably is already happening.”
Slowed growth from spirits-based RTDs should set off alarm bells for the overall spirits category, which has been relying on the segment to keep the category out of the red.
In the L52W, total spirits dollar sales were about flat (+0.1%) while volume, measured in case sales, was up 2.4% year-over-year (YoY). If RTDs are excluded from the category, spirits dollar sales (-1.5%) and volume (-2.2%) would both be in decline compared to the same period in 2024, McVickers shared.
Spirits-based RTDs had a 10.4% share of total spirits dollar sales in the L52W, up from 8.9% this time last year, recording the largest share gain within the category (+1.5 share points). The only other segment to record notable share growth was tequila (+1 share point, to 16.7%).
“Prepared cocktails is really carrying the weight of the spirits category on its shoulders,” McVickers said.
Spirits-based RTDs and tequila were also the only two segments among spirits’ predominant share holders to record dollar sales and volume growth in the L52: RTD dollar sales +16.9%, volume +17.4%; tequila dollar sales +6.2%, volume +6.1%.
Despite the transition from skyrocketing growth to still impressive, but slower growth, spirits-based RTDs are increasingly taking share from beer.
Those share exchanges are primarily happening with the category’s beyond beer offerings, such as hard seltzers and flavored malt beverages (FMBs).
Hard seltzer growth peaked in 2019, with “rapid decline” over the next two years – notably overlapping with the growth peak of spirits-based RTDs, including spirits-based hard seltzers. The segment has been in decline ever since.
FMBs have had more “cyclical” growth, with highs in 2020 and 2023, and lows in 2021. The segment is at another low now, and has dipped into the red YTD. The recent declines have been credited to spirits-based RTDs, which fill a similar consumer desire for flavor-forward bev-alc.
Notable share changes are also happening in the on-premise. RTDs still have a small on-premise presence, with 2.5% share of total bev-alc dollar sales in the channel for the 52-week period ending May 17, McVickers shared, citing data from NIQ’s on-premise arm, CGA.
However, within the segment, spirits-based offerings – including RTD cocktails (44.2%) and ready-to-serve cocktails (5.3%) account for nearly half of all dollar sales (49.6%) in the L52W. That marks a 11.2 percentage point gain compared to the same period in 2024.
The majority of that share was taken from hard seltzer (-9.5 percentage points, to 37.8% share), followed by FMBs (-1.7 percentage points, to 12.7%).
In the off-premise, FMBs and hard seltzer still have a dominant share of what NIQ refers to as the “progressive adult beverage” (PAB) category, which also includes wine- and spirits-based cocktails and hard cider. However, spirits- and wine-based RTDs are the only segments in the black in the L52W through August 9; spirits-based dollar sales +14.4%, volume +15.4%; wine-based dollar sales +7.5%, volume +5.1%.
Spirits-based RTDs are also leading innovation growth within PAB, contributing $83.5 million of the $233.3 million recorded by new PAB products/brand extensions in the L52W. More than $30 million of that can be attributed to one brand: Gallo’s High Noon Sun Sips.
“This [RTD] category definitely has carved out the distinct and growing category within the alcohol industry,” McVickers said. “And while the pace of growth has kind of slowed down a little bit, we expect the segment to remain [a] long-term fixture.”