RTDs and FMBs Are Finding Open Runways to Continued Growth
By: Joshua M. Bernstein
The desires of today’s drinkers are as unpredictable and fastchanging as the weather. Even five years ago, craft breweries could lavish IPAs with hops and expect customers to line up for cans—right after stocking up on hard seltzers.
The forecasts for beer and hard seltzer have since slowed, with dollar sales dipping 1.2% and 11.5% in the 26 weeks ending July 6, according to NielsenIQ (NIQ). In that same period, FMBs and spirit-based RTDs grew 6.6% and 19.5% respectively, and there’s ample runway for growth.
“New brands that launch have the opportunity to break into the top five [in overall sales],” says Kaleigh Theriault, the Director of Beverage Alcohol Leadership at NIQ. “People are excited about new and different in this world.”
To stand out among the crowded variety packs and single-serve cans, beverage alcohol companies are producing FMBs and RTDs built around real fruit and bold flavor blends with multicultural appeal. Additionally, brands are carving out new retail opportunities by developing malt-based analogues of spirited cocktails and liquors, while breweries are reaching for the RTD aisle to find new customers.
“The margarita is the number one cocktail in America, and Cayman Jack really delivers on those margarita cues.” — DAVID BARNETT, Mark Anthony’s Chief Commercial Officer
FMBs Are One Key to Reaching Gen Z Consumers
Linguistic gatekeeping can hinder beverage-alcohol adoption. Wrap a dryhopped West Coast IPA or Chardonnay in excess adjectives, and it can seem unapproachable to less-experienced drinkers. FMBs deliver bold yet familiar flavors that need no Cicerone or sommelier explanations.
This is relevant to diverse Gen Z consumers that have grown up in a world filled with snacks and drinks flavored with global peppers, spices, herbs, and citrus. A sparkling yuzu seltzer is nothing new.
When a Gen Zer reaches LDA, “they already have a much more refined palate and flavor experiences,” Theriault says.
Molson Coors Beverage Company is pursuing the latest LDA consumers with its Happy Thursday line. “It’s a brand defined by a few things that Gen Z really likes: bubble-free refreshment and delicious fruit flavors,” says Amanda DeVore, the Senior Director of Marketing Innovation at MCBC.
Released this spring, the spiked refreshers—ideally merchandized between FMBs and RTDs—take cues from the colorful non-alcoholic refreshers found at chain coffee shops. Happy Thursday comes in four flavors, including compelling blends such as pineapple starfruit, each variant’s technicolor label corresponding to its flavor.
Many successful FMBs entice customers with color. Jack Daniel’s Country Cocktails are sold in clear-glass bottles that showcase bright red hues of Watermelon Punch and Southern Peach’s pinkish pop.
“Our flavors are bold and fruit-forward, so the vibrant colors create a visual cue for consumers,” says Mark Champion, the Brand Manager for Jack Daniel’s Country Cocktails. Sales of the Cayman Jack brand family are typically growing by 20 to 30% monthly and are nearing 10 million cases annually.
This year, Jack Daniel’s Country Cocktails released a hard tea variant that’s relevant to its core demographic. “Tea is often our consumer’s non-alcoholic drink of choice, especially in the Southern regions of the United States where it’s ingrained in culture,” Champion says.
After water, tea is the world’s most consumed beverage, meaning it’s ripe for FMB crossovers that might be tougher for soda brands with comparatively narrower followings.
Lipton Hard Iced Tea debuted last year, and the cross-section of consumers includes “loyal Lipton non-alcoholic drinkers, current hard tea drinkers crossing over and others who are new to the segment,” says Lisa Texido, Brand Director for Lipton Hard Iced Tea.
Parsing research data, Texido discovered that Lipton Hard Iced Tea drinkers tend to be well educated, earn higher incomes, and lean millennial. High brand awareness helps “cut through the clutter,” Texido says.
Malt-Based FMBs Can Broaden Sales Opportunities
To adhere to America’s misaligned liquor laws, and find new sales opportunities, many beverage companies are creating malt-based analogues of both popular cocktails and spirit brands. As an FMB, Jack Daniel’s County Cocktails can be sold in retailers where the whiskey isn’t legally welcomed.
“The biggest opportunity for Jack Daniel’s Country Cocktails is the convenience channel, which is the largest channel for FMBs,” says Champion, the Brand Manager.
Popular cocktails are primed for an FMB approach. Mark Anthony Brands is finding massive success with Cayman Jack, its line of margarita-inspired FMBs made with lime juice and blue agave nectar.
“The margarita is the number one cocktail in America, and Cayman Jack really delivers on those margarita cues,” says Mark Anthony’s Chief Commercial Officer David Barnett. Sales of the Cayman Jack brand family are typically growing by 20 to 30% monthly and are nearing 10 million cases annually.
Another blockbuster hit is Pink Whitney, the pink lemonade–flavored New Amsterdam Vodka created in conjunction with podcast hosts and former hockey players Paul Bissonnette and Ryan Whitney. The brand debuted in 2019, and it sold more than 1 million cases by its second year in the market.
Despite the popularity, “our vodka base is limited in terms of where consumers can find Pink Whitney,” says Brandon Lieb, the Vice President of Spirit of Gallo, which owns New Amsterdam. “We saw a massive opportunity to create greater physical availability for consumers so that they could grab Pink Whitney across shopping occasions and moments.”
The company created a malt-based Pink Whitney sold in 50ml bottles, enticing customers in convenience and grocery stores to give the brand a shot. The format is “the fastest-growing size for the brand,” Lieb says.
The 50ml bottles of malt-based Pink Whitney entice customers in convenience and grocery stores to give the brand a shot. The format is the fastest-growing size for the brand.
For all FMB and RTD brands, the challenge is that early enthusiasm can sometimes wane as customers face cold cases filled with fast-changing options, leading to little brand loyalty. “Consumers have gotten into a mindset where there’s always going to be a new flavor,” Theriault says.
Navigating today’s market requires a constant recalibration of flavors, can sizes, and ABVs, staying on trend with today’s changing tastes. Finding the right flavor of the month can lead to success for years to come.
About the Author: Award-winning beer journalist Joshua M. Bernstein is the author of six books, including The Complete Beer Course.