Market Trends

As Consumer Demand Fuels Premiumization of RTDs, Is Your Brand Ready?

Diana Goff
 | Global Foresights Manager, O-I Glass

In an ever-evolving world of consumer preferences, one remarkable transformation is taking place in the realm of Ready-to-Drink (RTD) beverages. Traditional RTDs, once thought of as the less glamorous cousin of classic cocktails, are currently experiencing a premium makeover due to rising consumer demand for convenience and sophistication. As a brand in this rapidly changing landscape, are you prepared to seize the opportunities presented by the premiumization trend? 

Market Shifts: The Winds of Change in RTDs

Consumers have historically perceived RTDs as a quick and easy alternative to a well-crafted cocktail. The tides are shifting, though. In today’s world, where premium products hold a special allure, RTDs are poised for a significant transformation. Innovation within this space now represents a fusion of convenience and sophistication, making them a preferred choice among consumers. 

The global RTD market is expected to witness an impressive growth rate of over 12% through 2027, ultimately reaching a staggering US $40 billion by the end of this period. The driving forces behind this expansion are the rise in popularity of cocktails and long drinks, coupled with the ascent of premium RTD offerings. According to IWSR data, the proportion of RTD consumers who enjoy these beverages more than once a week increased from 39% in 2022 to 43% in 2023, indicating a clear shift in consumer preferences. 

To truly harness the power of premiumization in the RTD market, brands need to adapt and position themselves strategically. And one of the most effective ways to do that is through packaging. 

Stat graphic on the rise of RTD consumption

Overcoming Poor “Shoppability” through Packaging Differentiation

One of the challenges facing the RTD market is the difficulty consumers encounter while navigating the retail shelf. The current array of RTDs often looks remarkably similar, making it challenging for consumers to distinguish between products and make informed choices. This poor “shoppability” issue is highlighted by VideoMining data, which reveals that only 27% of shoppers who engage with RTDs in a grocery aisle ultimately make a purchase. In other words, 73% of shoppers walked away after stopping in front of the RTDs shelf. 

This lack of differentiation on the shelf is where your brand can truly shine by opting for premium glass packaging. Not only does glass convey an immediate sense of sophistication, but it also ensures that your RTD stands out amidst a sea of similar-looking alternatives. With unique bottle shapes, elegant labels, and a commitment to quality, your RTD can capture the attention of discerning shoppers, ultimately leading to increased sales and market share. 

Consumers Equate Glass Packaging with Premium Experience

Consider this: According to the 2023 Hart Research Consumer Survey conducted by the Glass Packaging Institute, consumers overwhelmingly prefer glass bottles over plastic and aluminum containers. This clear preference for glass packaging is a testament to the intrinsic value that consumers associate with premium products. According to IWSR research, more than a third of consumers prefer glass bottles for RTDs, and this is even higher for African Americans – nearly one in two prefer glass over other pack types. 

But it doesn’t stop there. The GPI survey also highlights another compelling statistic – consumers opt for glass not only because of its aesthetic appeal but also because of its sustainability. In fact, the preference for glass leaps to a remarkable 73% when consumers are informed that containers and aluminum cans often contain plastic liners. This trend signifies that consumers are not just looking for sophistication; they want sustainability and integrity in their choices. 

Stat graphic on consumer preference for RTDs in glass

Elevating the RTD Drinking Experience with Glass

The importance of packaging extends beyond mere aesthetics. It has a profound impact on the overall drinking experience. According to research by The IWSR, when it comes to RTDs, most consumers prefer to drink them poured into glass over ice – thus, the choice of packaging can significantly influence how consumers perceive and enjoy their beverages. Glass, in particular, has a unique ability to elevate the drinking experience. 

Studies have shown that drinking from a glass bottle can get you as close as possible to the feeling of sipping a meticulously crafted cocktail from a traditional glass. What’s more, the weight, texture, and sound of clinking glass provide a sensory experience that plastic and aluminum containers simply cannot replicate (I dare you to try). It enhances the sense of occasion, making the consumer feel that they are indulging in a premium beverage. 

For those who appreciate the fine details of enjoying a well-made cocktail, the choice of glass packaging conveys a level of respect for the craft that resonates with discerning consumers. It’s not just a drink; it’s an experience. 

Position Yourself in This Hot RTD Market with Glass Packaging

As the RTD market continues its journey towards premiumization, your brand has an incredible opportunity to differentiate itself and capture the imaginations of discerning consumers. By embracing glass packaging, you can align with the evolving desires of your target audience and set yourself apart from the competition. 

The beauty of glass goes beyond aesthetics; it embodies the essence of premium quality. It not only enhances the visual appeal of your product but also speaks to consumers’ desires for eco-friendly and sustainable choices. 

To truly prepare your brand for the premiumization of RTDs, it’s time to reevaluate your packaging choices. Glass can be the key that unlocks the doors to this thriving market, as it signifies both luxury and sustainability. By making the switch to glass packaging, you’ll not only meet consumer demand but also show your commitment to delivering a superior drinking experience. 

Finally, the premiumization of RTDs presents an exciting opportunity for brands to differentiate themselves in a market characterized by low “shoppability.” To thrive in this volatile environment, you must consider the impact of your packaging choices and switch to glass. Furthermore, by using glass packaging, you are not only embracing premium aesthetics and sustainability, but you are also addressing the issue of retail shelf differentiation and enhancing the overall drinking experience. Making this packaging move can increase your brand’s visibility and shelf appeal, while creating a connection with consumers who appreciate the finer aspects of enjoying their beverages. Premium glass packaging can be the competitive edge your brand needs in a market where standing out is crucial. The time to prepare your brand for RTD premiumization is now. 

Diana Goff
Diana Goff
Global Foresights Manager, O-I Glass
Diana Goff loves translating information into engaging stories that help unlock growth and innovation opportunities to transform the future of glass. She’s passionate about consumer behavior, social media, avocados and a strong cup of coffee.
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