Spirit-based ready-to-drink cocktails aren't just a passing fad, according to the CEO of Jameson Whiskey's parent company.
Conor McQuaid, who sits at the helm of Pernod Ricard North America, said that while products like hard seltzer have disrupted the market, spirit-based cocktails will be more of a mainstay for consumers as the industry invests more in the product.
Pernod Ricard has a wide-ranging portfolio of wines, champagnes and spirits, including Malibu, Absolut Vodka, Glenlivet, and Jameson Irish Whiskey.
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"The enduring nature of a brand like Absolut or a brand like Jameson…gives us the anchor points and the confidence that this isn't transient in the same way Jameson has been around since 1780," McQuaid said. "I'm of the belief that this has more of an enduring nature than maybe some of the cycles that we've seen historically in this space where those certain brands have come and gone, over the decades. "
According to data from the Distilled Spirits Council of the United States (DISCUS), ready-to-drink products grew in popularity last year with sales up 26.8% reaching $2.8 billion in revenue.
This represented the fastest growing spirits category by revenue, according to Christine LoCascio, DISCUS chief for policy, strategy and membership.
DISCUS is a national trade association representing producers and marketers of distilled spirits sold in the United States.
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A decade ago, the ready-to-drink category in the U.S. accounted for less than 3% of the total U.S. beverage alcohol market. That grew to almost 12% in 2022, which was driven almost entirely by the hard seltzer subcategory, according to market research firm ISWR.
Still, trends are changing.
Marten Lodewijks, head of consulting for Americas at IWSR, said in a recent report that "despite the hard seltzer craze we witnessed from 2017 to 2021 which was malt-driven, spirits-based products have actually grown faster, just off a smaller base."
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These products, "including the vodka- and tequila-based hard seltzers that entered the picture later, offer consumers a slightly more premium experience, and that has been key to their success over the malt-based alternatives that initially created the category," he added.
The problem is, 19 states still prohibit the sale of spirit-based ready-to-drink cocktails in grocery stores and 21 still prohibit the sale of them in convenience stores, according to DISCUS.
In Texas, spirit-based ready-to-drink products can only be sold in 3,000 package stores but similar malt-based ones can be sold in more than 30,000 grocery and convenience stores, the trade group said, noting that this is hindering the distilled spirits industry, which is a "significant driver of economic activity." in the U.S.
Malt-based and spirit-based ready-to-drink products have the same alcohol content, about 5%, according to DISCUS.
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Even with this hurdle, McQuaid is eyeing other opportunities to invest even further in the ready-to-drink category.
In January, its Absolut brand and Ocean Spray launched ready-to-drink cocktails in the U.S. in multiple flavors.
