Welcome back to the BevNET spirits newsletter. This week we dive into ready-to-drink (RTD) data to unearth the next hot segments.

What insiders are reading: Check out the latest RTDs on the shelf and another surprising distribution move in California.

Thanks for reading.

-BevNET spirits editor, Ferron Salniker

Are RTDs still booming? Yes, and thank goodness because they are a lonely bright spot for the bev-alc industry. 

We just got a round of juicy data from Bump Williams Consulting on “flavored alcohol,” which includes flavored malt beverages (FMBs), hard seltzer, hard cider and spirits- and wine-based RTD and ready-to-serve (RTS) cocktails.

First question: Is growth universal across those segments? Nope. When you extract FMBs, hard seltzer and hard cider, those three segments have seen a 4% drop in dollar sales YTD, outpacing declines for traditional beer. 

But spirit/wine total RTD dollar sales are still hot, reaching $1.9 billion YTD through July 5 (+23%) – and that’s despite limited distribution (40–50% of stores) compared to their malt-based counterparts.

RTDs have even achieved success while its leading brand, Gallo’s High Noon, is now starting to experience a YoY decline in sales – which speaks to the power of the other leaders (you can find out who those are in the full article).

Let’s dig in on some trends. As for base, vodka still leads, making up just under half of total RTD dollar sales, followed by wine and tequila. 

Spirits/wine RTDs are also driving the premiumization of flavored alcohol. While malt-based hard tea and hard lemonade are experiencing sales declines, spirits RTD tea and lemonade are seeing triple-digit growth, and wine based versions are also seeing a significant uptick this year. What is a wine-based lemonade? I have no idea and don’t think I want to find out.

Another trend? The high ABV (+8% ABV) carve-outs of FMB, seltzer, cider and RTD have all shown collective growth YTD, with their low ABV counterparts in most cases falling on the opposite side of break-even. The majority of sales still lie within the low ABV realm, but several major RTD brands are positioning the high ABV segment as a “key battleground in flavored alcohol going forward,” read the report. Get more insights and brand-specific data. 

Uncle Nearest – the country’s largest Black-owned distillery – still faces an uncertain future as a judge weighs its lender's request for a receiver to seize control of the company's operations.

• The legal drama kicked off late last month when Farm Credit Mid-America, a primary agricultural lender, sought the emergency appointment of a receiver to take over operations at Nearest Green Distillery, alleging the company misused loan funds and was in default for over $100M.
• Uncle Nearest fired back, arguing that it has made multiple payments to the lender, and claimed that a former CFO was responsible for fraudulently overestimating barrel inventory without leadership’s knowledge. 
• In court last week, the whiskey company repeated that argument and said that receivership would be catastrophic to the brand. But Uncle Nearest did not refute that it is in default and will not be able to make its upcoming payment. It’s likely the company may be aiming to leverage the compelling nature of the Uncle Nearest’s brand and story to keep the owners involved if a receivership takes place. 
• For now, the judge has ordered to preserve the collateral in question – primarily whiskey barrels – and has issued a gag order. 

Read more about what went down in court and what receivership could mean.

Want to encourage craft beer drinkers to pick up a craft ready-to-drink (RTD) cocktail? Try offering more beer. Now in its third release, this series is described as a first-of-its-kind RTD brand and brewery partnership that reimagines classic cocktails through the lens of craft beer. We talked to the Tip Top team about how they’re aiming to establish a clear bridge for craft beer drinkers to the ready-to-drink craft cocktail space. Check it out.

Drnxmyth, a pioneering startup in the RTD cocktail space, is now shutting down. Launched in 2020, the California-based company made a splash for partnering with top bartenders during the pandemic and for its unique packaging and high quality ingredients. The closure comes after a number of challenges, including struggles to lower margins, a tough pivot from its original e-commerce focus, and difficulties in securing a viable wholesale path. Insiders can read more about what went wrong.

RTDs are so hot even the royal palace is getting in on the game with the Buckingham Palace Gin & Tonic, a 250ml 6.8% ABV canned cocktail combining the palace’s dry gin with tonic water. Take a look.

Hard tea is all the rage right now, but one RTD company has been championing the style since 2013. After expanding into other spirits-based canned cocktails, Owl’s Brew has returned to its roots with a Sun Tea & Vodka line launched last month. As the brand’s portfolio now includes anything from its original line of hard tea seltzers to a co-branded line with comedian Chelsea Handler, the founders have grown to see their approach to RTDs similar to craft breweries. Read the interview.

Summer spirits distribution moves include new NA and spirit additions for Southern Glazer's Wine & Spirits (SGWS) and the continued spirits glow-up for Reyes Beverage Group in California. Get the latest.

 Nearly two years after the launch of their non-alc (NA) tequila alternative, Casa Lumbre and Formula One champion Lewis Hamilton are hitting the gas on a new product. The Pernod Ricard-backed zero-proof agave spirit line makes an entrance as the adult non-alc (ANA) category reaches a market value nearing a billion dollars in off-premise channels. Get the details.

Esquire looks into the “small but vocal world of MAGA-themed booze,” a very American phenomenon that has certainly graced our inboxes at BevNET (if you can let me know what “zero woke ingredients” means you’ll help us solve a mystery). “The political statements these brands are built on might be loud, but it turns out many of them are either failed business ventures or concepts…” Read the article.