Beverages: How Can Wine Fight Back Against RTDs?

Why It's Trending: A Cultural Shift in Alcohol Consumption

The battle between the wine industry and the ready-to-drink (RTD) category is a clear reflection of a broader cultural shift in how younger consumers approach alcohol. This isn't just about a preference for one drink over another; it's about a fundamental change in values, consumption habits, and the role of alcohol in daily life. The rise of RTDs is a direct response to this new consumer landscape, which prioritizes:

• Convenience and Lifestyle Integration: Younger consumers want products that fit seamlessly into their mobile, on-the-go lifestyles. RTDs, with their easy-to-carry cans and no need for special glassware or tools, are the epitome of convenience.

• Health and Moderation: The "sober curious" and "mindful drinking" movements are gaining traction, especially among Gen Z. RTDs often tap into this trend with clear messaging around low-ABV (alcohol by volume), low-calorie, and gluten-free options. Wine, by contrast, is often perceived as higher in calories and less transparent in its nutritional labeling.

• Aesthetic and Social Appeal: RTDs are designed to be "social media-friendly" with their eye-catching packaging and a vibrant, fun brand image. They are culturally resonant and often backed by celebrity influencers, which is crucial for attracting a generation that values authenticity and peer recommendations.

• Approachability and Exploration: The wine industry's traditional language—with its talk of "terroirs" and complex tasting notes—can be intimidating to newcomers. RTDs, with their straightforward flavors and simple branding, offer a low-commitment, easy entry point for consumers who want to experiment without a big investment.

Overview: A Clash of Generations and Categories

The wine industry is facing a significant challenge from the explosive growth of the RTD market. Still and sparkling wine's share of global alcohol serves has been in steady decline since 2019, while RTDs have doubled their market share. This trend is particularly pronounced in key markets like the US, Japan, Canada, and Australia, where RTDs have already surpassed or are on track to surpass wine volumes.

The article outlines several key reasons for this shift. The wine industry is struggling with an aging consumer base and a perceived lack of accessibility, while RTDs are successfully appealing to younger drinkers (Gen Z and Millennials) through convenience, flavor innovation, and modern marketing. The lines are also blurring, with a rise in wine-based RTDs and spritzers, but the core wine category still needs to "reinvent" itself to remain relevant and compete effectively.

The analysis provided by IWSR data highlights the urgency of this issue. Still wine is expected to continue its volume decline in many key markets, while RTDs are poised for sustained growth. The wine industry must address its fundamental weaknesses—its traditional packaging, complex branding, and outdated marketing strategies—to stem the tide and attract a new generation of consumers.

Detailed Findings: The Core Problems for Wine

• Packaging and Convenience: Traditional wine bottles require corkscrews and glassware, making them ill-suited for on-the-go consumption, picnics, or casual social gatherings. This is a major disadvantage against RTD cans, which are portable, recyclable, and easy to open.

• Flavor and Innovation: The wine industry's product development cycle is slow, rooted in seasonal harvests and long aging processes. This makes it difficult to respond to rapidly changing consumer trends and flavor preferences. RTDs, by contrast, can quickly launch new flavors, collaborations, and limited editions to create excitement.

• Health and Transparency: Younger consumers are increasingly health-conscious and seek transparent labeling. RTDs often highlight low-calorie, low-ABV, and gluten-free attributes. Wine is often perceived as high in sugar and calories, and a lack of nutritional information on labels makes it feel less transparent.

• Marketing and Cultural Relevance: Wine marketing is frequently seen as formal and exclusive, targeting traditional occasions. RTDs are "culturally resonant," using social media, influencers, and fun, playful branding to appeal to younger consumers. Wine brands have struggled to build this kind of digital presence and tap into user-generated content (UGC).

• Price and Accessibility: A full bottle of wine can feel like a significant financial commitment to a young consumer who may not know if they will like the wine. Single-serve RTDs offer a lower-cost, lower-risk opportunity to experiment.

How Wine Can Fight Back: A Strategic Roadmap

The wine industry must take a multi-pronged approach to combat the rising dominance of RTDs. The following strategies, based on a reinvention of product, packaging, and marketing, are crucial for future success.

• Modernize Packaging and Formats:

  • Embrace Alternative Packaging: The most direct way to compete on convenience is to adopt RTD-friendly formats. The growth of canned wine and wine in a box is a clear opportunity. Canned wine offers portability, single servings, and recyclability. Boxed wine addresses the issues of waste and spoilage, as it stays fresh for weeks after opening.

  • Focus on Single-Serve and Smaller Formats: Smaller bottles, pouches, and cans offer a lower-cost, lower-commitment option for consumers who want to try a new wine without buying a full bottle. This encourages experimentation and reduces the intimidation factor.

• Innovate with Flavor and Functionality:

  • Launch Flavored Wine-Based Drinks: The article notes the success of wine spritzers and flavored sparkling wines in markets like Canada. The wine industry can create a bridge to RTD consumers by offering fruit-forward, sweeter, and more approachable wine-based cocktails.

  • Develop "Better-For-You" Products: In response to the health and moderation trend, winemakers can innovate with low-alcohol or alcohol-free wines and be more transparent about calorie and sugar content. Highlighting attributes like "organic," "vegan," and "sustainable" on the label can also appeal to the values of Gen Z.

• Overhaul Marketing and Branding:

  • Demystify the Category: Wine brands must simplify their language and make it more approachable. Instead of focusing on complex jargon, they should create content that is educational, fun, and relevant to everyday life.

  • Leverage Digital and Social Media: This is a critical area for improvement. Wine brands need to:

    • Utilize Influencer Marketing: Partner with both wine experts and "lifestyle" influencers to make wine feel more aspirational and integrated into modern life. The success of brands like Whispering Angel shows the power of visual, lifestyle-focused content.

    • Engage with User-Generated Content (UGC): Encourage consumers to share their wine experiences on social media through campaigns, challenges, and contests. This builds an authentic brand community.

    • Create Engaging Content: Use short-form video on TikTok and Instagram Reels to tell stories, offer pairing suggestions, and show behind-the-scenes glimpses of the winemaking process.

  • Target New Occasions: Move beyond traditional dinner parties and special occasions. Market wine for picnics, concerts, casual nights in, and outdoor activities—occasions where RTDs currently dominate.

• Embrace Community and Experiential Marketing:

  • Create Memorable Experiences: Host fun, low-pressure events like informal tastings, food pairings, or even virtual tours of vineyards. These experiences can help demystify the category and build loyalty.

  • Build a Brand Community: Use email marketing and loyalty programs to foster a deeper connection with consumers, making them feel like they are part of an exclusive club without the stuffy, traditional feel.

Summary of Trends

• Core Consumer Trend: A Move Toward Convenience and Moderation: Consumers, particularly younger generations, are prioritizing convenience, health, and a mindful approach to alcohol consumption, favoring grab-and-go formats with transparent nutritional information.

• Core Social Trend: The Rise of "Casual Cool" in Alcohol: Alcohol consumption is shifting from formal, occasion-based rituals to a more casual, everyday part of life. Brands that are approachable, fun, and social media-friendly are winning over those that feel intimidating and exclusive.

• Core Strategy: The Reinvention of a Category: The wine industry is being forced to reinvent itself by adopting new packaging, innovating with flavors, and modernizing its marketing to appeal to a younger, values-driven consumer base.

• Core Industry Trend: The Convergence of Packaging and Branding: The success of a beverage is now directly tied to its packaging and branding. Eye-catching, convenient formats and an authentic, socially-conscious brand message are key to driving trial and capturing market share.

• Core Consumer Motivation: The Desire for Guilt-Free Experimentation: Younger consumers are motivated by a desire to explore new products without a big financial or health-related commitment. They want low-risk ways to discover new tastes, and RTDs are perfectly designed to meet this need.

Final Thought: A Call for Reinvention

The data is clear: wine cannot afford to stand still. The challenge from RTDs is not a temporary blip but a long-term threat driven by fundamental shifts in consumer behavior. For wine to fight back, it must shed its old-world image and embrace a future that is more accessible, more convenient, and more culturally relevant. By innovating with its products, modernizing its marketing, and focusing on a new generation of consumers, the wine industry can reclaim its relevance and ensure its long-term health in an evolving alcohol landscape.

Source: https://www.theiwsr.com/insight/how-can-wine-fight-back-against-rtds/