COVID-19 Impact on RTD Beverages in the Food and Beverage Industry | DBMR

Posted by Prakash on April 19th, 2021

COVID-19 Impact on RTD Beverages in the Food and Beverage Industry

The COVID-19 pandemic is reshaping everything around the globe. It has impacted almost every industry around globe in positive or negative ways. The impact of the COVID-19 pandemic on global economic conditions has impacted and may continue to impact the proper functioning of financial and capital markets, as well as foreign currency exchange rates, commodity and energy prices and interest rates.

The food & beverages industry has also got affected due to the COVID-19 pandemic situation. As the COVID-19 pandemic turning lives upside down, the trends such as RTD beverages are accelerating in the beverages industry. The beverage companies are taking exciting initiatives such as RTD beverages which are easy to consume and available. RTD coffee continues to perform well in China which is growing in double digits year-over-year in 2019. Also many Chinese dairy companies have also entered the RTD coffee sector with their own drinks. With the on-trade shut down in many major markets and the movement of people severely restricted, e-commerce sales have grown exponentially in the past few weeks. Sales of ready-to-drink cocktails in the U.S. off-premise have been soaring in the past few weeks.

Many companies have shut down or working well below full capacity. These companies may struggle to supply markets such as China as they emerge from the worst of the crisis. This situation has created a potential opportunity for local players, as there will be real pressure on markets and it may push people back to local suppliers, but it will likely be a short-term change. The retail sales of ready-to-drink coffee have doubled in the past five years. According to Beverage Marketing Corp (BMC), the sale has risen to .25 billion in 2018. Most of the grocery stores and convenience stores have selections that include Monster Energy Coffee, Starbucks, Coke, Forto Organic Energy Coffee, and Califa nitro latte with oats milk among others.

For instance,

“In mid-March, North America-based online beverage alcohol platform Drizly reported business growing at three-and-a-half times the rate of earlier in 2020, with wine and spirits growing twice as fast as beer.”

The pandemic could also accelerate the development of e-commerce in markets where it has been in its infancy until now.

For instance,

“According to IWSR, Ready-to-drink (RTD) products in 2019 were the fastest growing beverage alcohol category, up +19.6% in volume and +18.8% in value.”

As the effects of COVID-19 beverages that support immunity, sleep and stress reduction will likely remain strong throughout the year. The low alcohol content, low sugar and natural ingredients attract health-conscious consumers and also the price of RTD cocktails is half the cost of on-trade servings. The drinks enhanced with functional ingredients such as turmeric, blue majik and coconut water, kombucha are more demanding due to their health benefits.

Many companies are planning for the expansion or new product developments in the ready-to-drink beverages.

For instance,

“In July 2020, Quintessential Brands Group has launched The Opihr Gin RTD brand which is available in two flavours such as a dash of ginger and twist of orange.”

 “In June 2020, Calm Drinks has launched an immune booster CBD beverage, Calm water immunity +CBD.”

 “In May 2020, Aquarelle, Molson Coors Beverage Co.’s line of vodka-based canned drinks has launched across Canada with a multi-million-dollar marketing blitz.”

 “In June 2020, The Coca-Cola Company and Costa Coffee have today unveiled Costa Coffee Ready-to-Drink (RTD), a chilled, canned coffee brewed with Costa Coffee beans, designed for consumers looking for a genuine coffee hit.”

INITIATIVE

COVID-19 outbreak has affected every sector in the market which also includes beverages industry. The industry has affected as the supply and demand are badly disrupted. Many companies are losing their key revenue sources as food services outlets are closed or decreased sales. Many companies have closed their production facilities or lowered the workforce to mitigate potential risks from COVID-19. Read more…