How to Use RTDs for LTOs
by David Klemt
The RTD, aka ready-to-drink, category continues to grow and gain greater market share, particularly in the US.
However, the common association with RTDs is that consumers mostly drink them at home.
That begs a simple question: How can operators generate revenue with this popular, in-demand beverage category?
Massive Growth
Unsurprisingly, the RTD cocktail category is still one the rise.
These drinks are convenient. New brands come to market regularly. They tend to fall in line with rising consumer desire for lower-ABV options. And many brands speak to consumer desires—sustainability and outdoor interests, for example—via their visions and missions.
Per the IWSR, the US leads the charge when it comes to demand for RTDs. North America as a whole is driving growth.
However, the category grew 43 percent globally in 2020 alone. According to multiple sources, RTDs are worth USD $782.8 million. Projections have the category more than doubling by 2028: $1.7 billion.
Tequila and gin RTDs appear to be the most popular within the category, but rum, whiskey, and vodka are also growing.
So, what’s the point of all these numbers? Operators need to know what consumers are drinking and leverage that demand for the benefit of their businesses.
Simple LTOs
One of the most obvious ways to deliver on RTDs is to treat it like beer. Add a “Canned Cocktails” section and list your options. Or, hey, do what some venues do and add White Claw and other RTDs to the beer list.
After all, millions of people order canned beers every day in restaurants, bars, hotels, and entertainment and sports venues.
However, there are guests who perceive ordering an RTD instead of a traditional cocktail at a bar as a sub-par experience.
The bartender, after all, is just popping a top and handing over a can.
One way to elevate the experience is via limited-time offers. A great example comes from Nickel City, which has two locations in Texas: Austin and Fort Worth.
The award-winning neighborhood bar offers a monthly Boilermaker, and this month’s was the Rise & Shine:
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As you can see, a High Noon Grapefruit Vodka Soda comes with a 50/50 pour of Aperol and Altos Tequila for just $8.
Other restaurants and bars—with vessels large enough—are offering riffs on the Corona-rita with RTDs. The bar team builds the cocktail as usual, then inverts and inserts the RTD.
Such a drink can certainly be leveraged via monthly LTOs.
There are a few keys to succeeding with RTDs: understanding your guests, knowing your market, and getting creative. Guests willing to spend on the RTDs they enjoy at home while at your restaurant or bar? Great. Guests unwilling unless there’s added value? Convene your bar team and tap their creativity.
Image: Maria Oswalt on Unsplash
