Capitalizing on the Co-Branded RTD Surge

Introduction

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The ready-to-drink (RTD) segment has been experiencing exponential growth, fueled by consumer demand for convenience, premiumization, and innovative flavor profiles. A notable trend within this segment is the rise of co-branded RTDs, where renowned spirits brands collaborate with iconic non-alcoholic beverage companies to create unique offerings. This article examines recent developments in the co-branded RTD space, including collaborations between Bacardi and Coca-Cola, Jack Daniel's and Coca-Cola Cherry, the expansion of Jack Daniel's Hard Tea, and the new partnership between Captain Morgan and Pepsi Max. We will explore the strategic implications of these partnerships and provide actionable insights for alcohol marketing leaders and brand owners looking to navigate this dynamic market.

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The Rise of Co-Branded RTDs

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Bacardi Mixed with Coca-Cola

In September 2024, Bacardi announced the launch of Bacardi Mixed with Coca-Cola, set to hit shelves in selected European markets and Mexico next year. With an alcohol by volume (ABV) of 5%, this RTD will be available in 355ml cans. This collaboration taps into the historical association between Bacardi rum and Coca-Cola, a combination famously known as the Cuba Libre, which originated in Havana in 1900.

Mahesh Madhavan, CEO of Bacardi Group, emphasized the strategic value of this partnership:

"Through this relationship, we will expand our reach and accessibility so that even more consumers of legal drinking age can enjoy this classic Bacardi rum and Coca-Cola cocktail."

This move positions Bacardi to leverage Coca-Cola's global brand recognition and distribution networks, enhancing market penetration and consumer engagement.

Jack Daniel's & Coca-Cola Cherry RTD

Building on their existing partnership, Jack Daniel's and Coca-Cola introduced a limited-time release of Jack Daniel's & Coca-Cola Cherry RTD in September 2024. This offering blends the taste of Jack Daniel's Tennessee Whiskey with the notes of Coca-Cola Cherry, catering to consumers seeking novel flavor experiences.

Mary Beth O’Mara, Jack Daniel’s RTD Brand Director, highlighted the innovation:

"Building on our tradition of innovation, we're excited to present a fresh take that marries the renowned character of our Tennessee Whiskey with the timeless taste of Coca-Cola Cherry. This new Canned Cocktail embodies the perfect blend of sweetness and strength, making it an ideal choice for the season."

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At 7% ABV, this seasonal product expands Jack Daniel's RTD portfolio, which already includes Jack Daniel’s & Coca-Cola, Jack Daniel’s & Coca-Cola Zero Sugar, Jack & Ginger Ale, and Jack Honey & Lemonade. Priced at $12.99 for a four-pack and $3.50 for single cans, it is positioned to attract both loyal customers and new consumers interested in innovative RTD offerings.

Expansion of Jack Daniel's Hard Tea

In September 2024, Jack Daniel's announced the nationwide U.S. rollout of Jack Daniel's Country Cocktails Hard Tea, following a successful test launch earlier in the spring. The RTD combines Tennessee whiskey with black tea and fruit flavors, available in Original, Peach, Raspberry, and Blackberry variants. Offered at 5% ABV in various can sizes, including 12-ounce cans and variety packs, the Hard Tea line caters to the growing consumer interest in flavored malt beverages.

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To promote the launch, Jack Daniel's partnered with ACM and two-time CMT Music Award-winning country musician Lauren Alaina, leveraging her influence to engage with target demographics. Additionally, a sweepstakes in collaboration with Southern Living magazine offers fans a chance to win tickets and flights to meet Alaina at her concert in Las Vegas, enhancing consumer engagement and brand visibility.

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Captain Morgan Original Spiced Gold with Pepsi Max

In September 2024, Diageo announced a new partnership between its rum brand Captain Morgan and Pepsi Max to launch a co-branded RTD beverage: Captain Morgan Original Spiced Gold mixed with Pepsi Max. This collaboration brings together two iconic global brands to inject excitement into the fast-growing RTD segment.

The new RTD perfectly balances the smooth flavors of Captain Morgan Original Spiced Gold rum-based spirit with the bold taste of Pepsi Max, a popular zero-sugar cola. With an ABV of 5%, the RTD is available in various formats, including a 330ml can, a 250ml slimline can, and a multipack of 6 x 250ml cans. Priced at £2.59 for the 330ml can, it launched exclusively in Great Britain on September 25, 2024, across major retailers such as Tesco, Sainsbury's, Morrisons, Asda, convenience stores, and wholesalers.

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Nuno Teles, Managing Director GB at Diageo, emphasized the synergy between the two brands:

"With a shared emphasis on fun, our partnership with Pepsi Max brings together two iconic brands to create one epic taste that will inject excitement into the RTD category. Both brands bring their own distinctive flavor profile to the mix, creating the ultimate combination that’s been expertly blended to deliver a great taste experience."

Natalia Filippociants, General Manager Beverages at PepsiCo GB, added:

"PepsiCo is always looking for new opportunities to meet the changing tastes and demands of consumers by bringing new, innovative products to market. Our partnership with Diageo brings together two drinks powerhouses who share a passion for innovation. Together, we’re mixing up the ready-to-drink category by creating a premium, iconic blend of flavors fans know and love with Captain Morgan Original Spiced Gold and Pepsi Max – the first alcoholic beverage to feature our flagship Pepsi brand."

This launch responds to the growing consumer demand for RTDs featuring well-known brands. Diageo's research indicates that 81% of consumers are more likely to purchase an RTD mixed with a branded mixer.

To support the availability of the new RTD, there is a comprehensive marketing campaign designed to drive excitement and raise awareness. The campaign includes Out of Home (OOH) advertising, Broadcast Video on Demand (BVOD), digital video, paid social media support, a disruptive sampling program, and cultural activations. The hero ad is a video that takes the audience inside the serve, featuring a collision of animated splashes representing the two liquids with the message "Two Greats, One Epic Taste."

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Strategic Implications for Alcohol Brands

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Leveraging Iconic Partnerships

The collaborations between spirits brands and Coca-Cola exemplify the strategic advantage of partnering with globally recognized non-alcoholic beverage companies. These partnerships offer several benefits:

• Brand Synergy: Combining two iconic brands creates a powerful market proposition that can attract a broad consumer base. For example, Captain Morgan and Pepsi Max both bring strong brand recognition and loyalty.
• Expanded Distribution: Access to the extensive distribution networks of companies like Coca-Cola and PepsiCo enhances market reach and availability.
• Consumer Convenience: Offering popular mixed drinks in a convenient, ready-to-drink format meets consumer demand for ease and portability.

Alcohol brands can consider similar partnerships to strengthen their market position and tap into new consumer segments.

Innovation in Flavor Profiles

Introducing new flavors, such as the Jack Daniel's & Coca-Cola Cherry RTD, addresses consumers' desire for variety and novel taste experiences. Seasonal and limited-time offerings can create a sense of urgency and exclusivity, encouraging trial and repeat purchases.

• Consumer Engagement: Novel flavors can rejuvenate brand interest and attract younger demographics seeking unique experiences.
• Market Differentiation: Flavor innovation, such as the use of Pepsi Max (a zero-sugar cola) with Captain Morgan, sets brands apart in a crowded RTD market, providing a competitive edge.

Brands should invest in research and development to explore innovative flavor combinations that align with their brand identity and consumer preferences.

Capitalizing on the RTD Trend

The RTD category is experiencing significant growth, with the UK market, for instance, seeing a +25% increase. Collaborations like Captain Morgan and Pepsi Max address this demand directly. The RTD market is diversifying beyond traditional offerings, and brands that adapt can capture emerging consumer trends.

• Product Portfolio Expansion: Diversifying product lines to include RTDs caters to consumers' evolving tastes and occasions.
• Cross-Promotion Opportunities: Collaborations with influencers and media partnerships, such as Jack Daniel's alliance with Lauren Alaina and Southern Living, enhance brand reach and engagement.

Alcohol brands should monitor market trends and consumer behavior to identify growth opportunities within the RTD segment.

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Actionable Insights for Marketing Leaders

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1. Explore Strategic Partnerships: Consider collaborations with non-alcoholic beverage brands or other complementary partners to leverage shared brand equity and distribution strengths.
2. Innovate with Purpose: Develop new products and flavors that align with consumer demands for novelty while staying true to the brand's heritage and identity.
3. Enhance Market Presence: Utilize limited-time offerings and seasonal products to generate buzz and maintain consumer interest throughout the year.
4. Leverage Influencer Marketing: Partner with celebrities or influencers who resonate with the target audience to amplify marketing efforts and build authentic connections.
5. Expand Distribution Channels: Ensure availability across various retail and convenience store channels, and consider e-commerce platforms to reach a wider audience.
6. Engage in Cross-Promotional Activities: Collaborate with media outlets or lifestyle brands to create integrated marketing campaigns that enhance consumer engagement.

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Conclusion

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The surge in co-branded RTDs presents significant opportunities for alcohol brands to innovate, collaborate, and expand their market presence. The partnerships between Bacardi and Coca-Cola, Jack Daniel's and Coca-Cola Cherry, and Captain Morgan and Pepsi Max illustrate the potential for brands to leverage iconic partnerships, introduce innovative flavor profiles, and capitalize on market opportunities. By aligning with consumer preferences for convenience, familiarity, and health-conscious options, brands can position themselves for success in the dynamic RTD landscape.

Marketing leaders and brand owners should proactively adapt to these trends, harnessing the potential of co-branded offerings to meet evolving consumer preferences and drive growth.