New RTD products are increasingly driven by sustainability, premiumization: IWSR

GLOBAL – Only 1% of new Ready to Drink (RTD) products used plastic-only packaging in the second half of 2021, down from 5% in the first half of the year, IWSR’s innovation tracking data shows.

The number of RTD products using plastic-only packaging is reducing since environmentally-focused packaging cues are increasingly important to consumers, according to the Global alcohol market research firm.

IWSR research shows that 44% of alcohol drinkers in the US feel that their purchasing decisions are positively influenced by businesses with an active environmental or sustainability agenda.

Some markets are moving away from plastic more quickly than others, especially in Germany, Japan, and South Africa, where no new products used plastic alone last year.

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On the other hand, Brazil and Mexico are progressing away from plastic but still have some way to go, the report says.

IWSR’s innovation tracking data also shows that RTD product launches are increasingly leaning into super-premium pricing, packaging with less plastic, fewer direct health claims, and greater diversity of alcohol content.

The market research firm details that the observation was evident in Australia, Brazil, Canada, China, Germany, Japan, Mexico, South Africa, the UK, and the US – which represent 85% of the global consumption of RTDs.

Moreover, the category is growing quickly in countries like China, Canada, and the US, which is the world’s largest RTD market.

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IWSR notes that the ability to respond to consumer needs goes some way toward explaining the rapid rise of RTDs.

IWSR has also observed that as an extension of evolving flavors, new RTD brand owners, as well as established producers, are increasingly introducing products with higher ABV rather than focusing on the more traditional 3-5% range.

Around half of all new RTDs launched in the second half of 2021 had an alcohol content of 5% or higher principally in China, the US, and Australia, but is not universal, IWSR highlighted.

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The firm reports other countries such as Germany and Japan are seeing a decrease in new innovations with higher ABVs.

Even as RTD launches are increasing, the number of health claims associated with new RTD products is decreasing.

The share of launches that included messages about low calories, sugars, carbs, or gluten dropped from 38% in the first half of 2021 to 29% in the second half of the year.

IWSR points out that as RTDs shift towards more premium, sustainable examples with fewer direct health claims and a greater diversity of alcohol levels, consumers have a broad and varied range of options in this fast-growing category.

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