Diageo Backs Declining RTD Category with $20M Investment

Diageo Australia is on a mission to turn the ready-to-drink category around and, in the coming weeks, the company will be rolling out a new range of products through the on and off-premise channels that aim to break the mould of traditional RTDs and prove that this category can offer great tasting, better-for-you products that are lower in sugar and in alcohol.

These new products are backed by Diageo’s biggest brands, including Bundaberg Rum with the release of Lazy Bear Rum & Dry, Smirnoff Pure, Pimm’s Sparkling Cup, Pimm’s Lemonade & Ginger Ale and Gordon’s Elderflower Spritz.

The launch represents one of Diageo’s biggest investments to date, supported by a $20 million investment and deep consumer and trade insights.

Over the last two years, Diageo’s innovation and marketing team has been receiving feedback from consumers and trade on the category, which has shown a need for an increase in great tasting, easy-drinking premix products that look great, save time for consumers, i.e consumers can share these products when entertaining, and are acceptable (lower in alcohol and sugar).

David Smith, Diageo Australia’s Managing Director said, “The RTD category has been in decline for the last eight years. There are fantastic products in the category, but the audience who is drinking them is a little bit older and they’ve all got Cola in them. So we need to do something, especially because the consumer is changing and the way that the consumer is changing is creating a big opportunity for the RTD category to grow again. And that’s what you see here; in the five new products that we have created, you see the first wave of Diageo’s response to the fact that this category is going to be a growing category over the next eight years, not a declining category, and we are incredibly excited about that.

“[Trade] should also be incredibly excited about that because RTDs make some great margin and we really believe that we’ve got something here that can start to turn around the category and start to grow the category.”

Targeted predominantly at men who are spending more time relaxing at home with friends at occasions such as BBQs, and going out less, Lazy Bear Rum & Dry offers an easy-drinking daytime beverage with just 3.5%ABV. A combination of Bundaberg Original Rum, ginger ale and lime, the product its light and refreshing, and is available in a six-pack. The new product also sees the return of Bundaberg’s famous mascot, the Bundy bear, who will be making an appearance in the new campaign for this RTD. RRP $21.99.

A mix of Smirnoff Vodka, soda and only natural ingredients, Smirnoff Pure brings a refreshing and clean product to millennials aged 20-25 years old that almost dares consumers to check the transparency of its ingredients. This new premix product is targeted at a demographic that desires a balanced and healthy lifestyle and products that enable them to achieve that. A bottle of Smirnoff Pure contains only 1.1 standard drinks and is lower in sugar than most RTD products on the market. It is available in a four-pack. RRP $17.99.

Available in a 750ml, Pimm’s Sparkling Cup is targeted at consumers entertaining at home, providing a product that can be shared, poured and served quickly and easily, and that tastes great. The product combines lemonade and ginger ale with natural fruit flavours and an ABV of 5.5%. All consumers have to do is pour into a glass, add ice and garnish. RRP $14.99.

A further extension of Pimm’s, Diageo has also created Pimm’s Lemonade & Ginger Ale, available in a 330ml bottle in a four pack. This same format has been created for Gordon’s Elderflower Spritz, a fusion of Gordon’s Gin, elderflower and soda. Both offer sophisticated, fun and refreshing products that are ready to sip from these two popular brands. RRP $19.99.

Read more on the insights behind these products and predictions for the future of this category in the RTD feature in the October/November issue of drinks trade magazine.

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