Diageo increases ready to drink beverage market again

On March 31, Beijing business daily learned from Diageo that Diageo North America plans to invest US $80 million to install two filling lines to expand the production of ready to drink drinks (RTD), including Smirnoff seltzers and strong cocktail brands, such as Crown Royal and ketel one drinks. It is expected to start commercial production this summer. The investment will enable Diageo to produce more than 25 million cases of ready to drink drinks per year. A reporter from Beijing business daily consulted Diageo on this matter. As of the time of publication, the other side has not yet replied.

This investment is another addition to Diageo’s ready to drink beverage track. Before that, Diageo had reached cooperation with domestic light alcohol tea brand Baitiao Weijiu and other brands, and many of its liquor brands also launched ready to drink beverage products. Industry insiders said that at present, the lifestyle of consumers has changed, and the layout of the ready to drink beverage market of liquor manufacturers is not only to meet the consumption needs of consumer groups, but also to optimize the industrial chain and enhance the brand image.

It is understood that Diageo’s preferred “ready to drink drink” is actually RTD, which is fully known as ready to drink. In Chinese, it can be expressed as less alcoholic drink, including premixed liquor, hard soda, etc., and can be understood as soda bubble water with a small amount of alcohol.

According to the wine and spirits Research Institute, global ready to drink beverage sales increased 43% last year, and it is the only alcoholic beverage category with sales growth. The agency also predicts that the compound annual growth rate of the ready to drink beverage market in the US market will increase by 35.3% in the next five years from 2019.

Another set of data shows that the global alcohol consumption dropped by 1.5% last year. Among the young consumers, the proportion of low-grade premixed liquor and flavored beer increased year by year. The data shows that consumers are now inclined to consume less alcohol and no alcohol, and the growth of instant drink market is more in line with the health needs of consumers.

Yin Kai, a senior person in the wine industry, said that the ready to drink beverage market in the United States has been booming in the past two years. In order to meet the needs of contemporary young consumers, old wine companies such as Smirnoff, corona and Budweiser have begun to produce their own ready to drink drinks. Therefore, it is not uncommon for Diageo to increase its ready to drink beverage market, but to conform to the overall market trend and develop the choice of young consumers.

According to the analysis of industry insiders, Diageo is a traditional liquor brand, and the premixed liquor and alcoholic drinks in ready to drink drinks are also the extension products of liquor. Therefore, it is more feasible for liquor brands to expand into the beverage industry, and ready to drink drinks can bring new business increment for Liquor Enterprises.

Yin Kai believes that Diageo has many global first-line liquor brands and has rich experience in brand operation and channel management. Therefore, Diageo’s in-depth layout of ready to drink drinks will further enlarge the market of this category and promote the market to pay more attention to young consumers and their consumption demands.

Beijing Business News (reporter Zhao Dan)

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