Cocktails in a can: the new frontier for drooping drinks giants
Despite their popularity, ready-mixed drinks are unlikely to turn the tide for big beverage companies
Connoisseurs may prefer to savour their dram of single malt straight up. But, for beverage companies, that’s not where the growth is. Ready-mixed drinks — think anything from hard lemonade through to wine coolers and cocktails in a can — have been steadily gaining share, and now account for 9 per cent of US alcohol consumption, according to Bernstein analysis.
For the sector’s giants — distillers and brewers such as Diageo and AB InBev — the rise in ready-to-drink products is mixed news. On the bright side, it must come as some relief that people are drinking anything at all. In the UK, alcohol consumption has fallen to the lowest level since data started being collected in 1990.
Likewise in the US, the world’s largest market for booze, volumes per head fell about 10 per cent between 2021 and 2024. Younger consumers seem particularly inclined to skip the bar for healthier pursuits.
Amid trade tensions and cost-of-living pressures, distillers are also suffering a glut of whisky. Jim Beam, owned by Japanese company Suntory, has halted production at its main distillery in Kentucky for a year.
Unsurprisingly, brewers’ and distillers’ stocks are drooping. Taken together, Diageo, Rémy Cointreau, Pernod Ricard and Brown-Forman have lost something like half their market value over the past two years.
Despite their popularity, ready-mixed drinks are unlikely to turn the tide for drinks giants. The market is fiercely competitive. The category sits at the intersection between wine, beer, spirits and soft drinks, with the result that brewers, distillers, wineries and even the likes of Coca-Cola are fighting over the same consumers.
Worse, the nature of ready-mixed drinks doesn’t play to the core strengths of beverage giants — especially those that focus on premium brands. Established spirits brands have not performed particularly strongly when poured into a can, and others have shown remarkably little staying power: Bernstein estimates that the category market share of AB InBev — which gave the world the Bud-Light-Lime-Rita — halved between 2020 and last year. The leader in ready-mixed drinks in the US is privately held Mark Anthony Group, owner of White Claw.
Big, listed beverages companies do have a foothold in the sector. Diageo’s Smirnoff Ice is the elder statesman of pre-mixed tipples. Coca-Cola’s various partnerships, including one with Brown-Forman for Jack & Coke, collectively make up 4 per cent of the market. Brewers have the advantage over distillers in that the distribution channel of ready-to-drink products is closer to that of beer than spirits.
But when one’s successful competitors include privately held BuzzBallz — purveyor of chilli-mango flavoured cocktails in a plastic spherical can — it’s clear premium spirits brands are getting outside their comfort zone.