Canned shakes are on the rise as sodas sizzle

Boxes of canned Cutwater Tiki Rum Mai Tai shakes at a retail store in Pleasant Hill, California on February 11, 2022.

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Strong seltzer has lost its fizz. Now canned cocktails are in fashion.

Also known as ready-to-drink, or RTD, cocktails, canned beverages were the fastest growing liquor category last year with $1.6 billion in revenue. That’s up 42% from a year earlier, according to the U.S. Distilled Liquor Board. By comparison, soda sales were down 5.5% last year, according to NielsenIQ, a research firm.

A growing number of beer companies are also dabbling in canned cocktails, releasing pre-blended versions of margaritas, pina coladas and daiquiris.

On Thursday, Molson Coors — the brewer of Coors Light, Miller Lite and Blue Moon — announced the development of Topo Chico Spirited, a new line of canned cocktails made with spirits like tequila and vodka. The company did not say which three flavors will go on sale next year in US markets, but said the drinks will be modeled after “familiar cocktails” already found on “bar and restaurant menus.”

In a recent report, DISCUS shed light on why so many companies, especially traditional beer producers, are entering the market. The report found that 94% of consumers choose RTDs because they offer a preferred flavor choice, while 92% said it’s because they’re convenient. Eighty-two percent said it was simply because they taste better than beer.

“American consumers are increasingly prioritizing convenience, taste, variety and quality in their beverage choices,” said Robert Blizzard, partner at research firm Public Opinion Strategies, who collaborated with DISCUS on the report.

While the canned cocktail market still accounts for a relatively small percentage of total U.S. liquor sales — just 4.6% in 2021, the report says — the category is expected to grow even more as beer companies continue to enter to the market and offer consumers even more variety of rich-tasting cocktails that they can drink at home or on the go, without mixing or measuring. (According to DISCUS, beer sales have not declined, but the drink’s market share is declining.)

In the summer, Heineken, together with the tequila producer Dos Equis, introduced a classic-style Margarita cocktail made with Blanco tequila and lime juice.

“Inclusion of a major brand in a fast-growing category where not all brands are immediately recognizable is a big opportunity,” said Heineken marketing director Johnny Cahill.

Cahill said the cocktail was a hit.

“The level of sales in the store exceeds our expectations. That’s almost double what we expected,” Cahill said, adding that the company hopes to expand to more states and introduce more flavors after this “promising start.”

The world’s largest brewery, owner Budweiser Anheuser-Busch Inbev, is also enjoying success in its foray into the industry. The beer maker, also known for its Stella Artois and Michelob Ultra brands, announced in March that it would expand its portfolio “beyond beer” with the acquisition of Cutwater Spirits. Three new cocktails include ranch water, rum-based mojitos and vodka and soda.

Fabrizio Zonzini, president of Anheuser-Busch’s beer division, said that while the company is not phasing out hard seltzer, “fast-growing spirits continue to be a bigger focus for us, with Cutwater our top priority.”

Hard times for hard seltzer

At the time, Boston Beer, known for Sam Adams, was forced to scrap millions of cases of oversupply of its Truly hard Seltzer, Mark Anthony Group’s biggest White Claw competitor, citing slowing sales in the industry. The company, which also makes Angry Orchard, said it had “outbid” materials for its Truly Hard Seltzer.

“Strong seltzer has lost its freshness as consumers have been distracted by the plethora of new non-beer products entering a crowded market,” Boston Beer CEO Dave Berwick said on a July conference call with investors.

However, some companies believe there is hope for hard seltzer. While Molson Coors ramps up its efforts in the canned cocktail market, there is room for both Topo Chico hard seltzer and the Topo Chico Spirited line, according to chief executive David Course.

“I think [hard seltzer’s] have proven their resilience. I think it has been proven that this is a large, significant and stable category,” he said.

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