Australians’ love of the ready-to-drink (RTD) beverage is at a record high, with the latest data from Roy Morgan finding “well over” one in five of us regularly enjoying them. RTD consumption has more than doubled since pre-pandemic, but what else has changed?
According to Roy Morgan’s latest Alcohol Consumption Report, Australians are drinking more alcohol than they were pre-Covid. More than 14 million (68 per cent) people had an alcoholic beverage, in an average four-week period, in the year to September 2023. What has been driving the consumption climb is the ongoing popularity of RTDs (ready-to-drink).
In the year to March 2020 – pre-Covid – 13 million (66.3 per cent) consumed alcohol in an average four-week period, with the latest figures revealing an increase of nearly one million people.
Roy Morgan CEO Michele Levine said, “The ‘shock’ of the pandemic disrupted, and has apparently ended, a longer-term trend of declining alcohol consumption amongst the Australian population. In the year to June 2006 nearly three-quarters of Australian adults, 73.5%, drunk an alcoholic beverage in an average four weeks.”
Over the last two years, consumption of the ‘big three’ alcoholic beverages – wine, beer, spirits – has declined as a share of population, but RTDs more than doubled. It grew from 2,138 million people (10.8 per cent) pre-pandemic to 4,319 million in late 2023, a massive increase of more than 2.1 million people for one drink segment.
“The rapid increase in the consumption of alcohol during the pandemic years of 2020-21 was driven by increases for all four of the major alcohol categories – wine, beer, spirits and RTDs. However, as the pandemic subsided, these four categories experienced very different trajectories of consumption.
“Consumption of RTDs has continued to increase, consumption of wine has plateaued at a far higher level than pre-pandemic, consumption of spirits has largely returned to its pre-pandemic levels and consumption of beer – which had the smallest pandemic increase – has continued its long-term decline,” Levine said.
Endeavour Group director of Merchandise and Buying, Tim Carroll, told Food & Drink Business that while the premix category has gone from strength to strength over the last few years, he expects it to continue with flavour-led innovation driving consistent growth.
“During FY23, the vodka premix range has delivered the most growth to total liquor than other subcategories with the biggest driver being lemon flavoured drinks. It was followed by premix Bourbon and Whisky.
“An influx of new product lines offered customers a diverse range of options to explore during the summer months and beyond,” Carroll said.
In FY23, Gen Z and Millennials made up almost 60 per cent of premix category sales, 1.5 times above the category average, with Carroll adding that innovation is fundamental in the premix category.
“New products account for more than 20 per cent of the category sales,” he said.
Other category movements
While RTDs have been the standout, wine has retained the most popular alcohol, with the number of people drinking wine increasing by almost one million from 8,096 million (41 per cent) to 44 percent (9,068 million).
The boost spirits experienced during the pandemic of an extra million consumers has receded. Its trajectory was 28.7 per cent pre-Covid, 33.8 per cent pandemic peak, and now 27.3 per cent of consumers.
Less than a third of Australians (6,725 million, 32.7 per cent) now consumer beer – down from 7,413 million (37.6 per cent) in the 12 months to March 2020.
Cider was the fifth most popular category, which countered the pandemic peak of the other four and dipped to 1,620 million (8.1 per cent). Pre-pandemic consumption was 10.7 per cent and by September 2023, cider had regained some ground to 1,953 million (9.5 per cent).
Demographic drinking changes
Numbers from research by the Australian Institute of Health and Welfare (AIHW) found that in 2019, young people aged 18–24 were most likely to drink alcohol monthly, but not as often as weekly.
In 2022–2023, the proportion who drank alcohol monthly decreased from 34 per cent to 29 per cent (see Figure 1), which meant that young people were most likely to drink alcohol weekly, but not as often as daily, for the first time since 2010.
AIHW said the long-term increases in the proportion of young people who did not drink any alcohol, or did so infrequently, continued in 2022–2023: one in five (20 per cent) drank alcohol less often than monthly (up from 13.6 per cent in 2001) and 16.3 per cent had never had a full glass of alcohol (up from 7.5 per cent in 2001).
That said, the proportion of daily drinkers and ex-drinkers among people aged 18–24 has remained stable since 2001 and did not change between 2019 and 2022–2023 (Figure 1).
AIHW asked people who had consumed alcohol in the previous 12 months were asked which type of alcohol they consumed most often. Across all young people surveyed, the most chosen beverages were premixes (RTDs - for example, Vodka Cruisers or Bourbon and Cola). However, preferences varied by both age and gender (Figure 2).
Among people aged 14–17 who recently consumed alcohol, RTDs were the main drink of choice. This preference was higher among females (64 per cent) than males (35 per cent). Bottled spirits were the next most common.
For females aged 18–24, RTDs were also the most common choice for an alcoholic drink (48 per cent), followed by bottled spirits and liqueurs (26 per cent).
Choices were different among males aged 18–24, who were most likely to consume regular strength beer (36 per cent) followed by RTDs (24 per cent).
At the checkout
Latest numbers from consumer insights company, NIQ, into liquor purchasing found Australians are visiting the liquor store more often but spending less.
NIQ found there was a 3.2 per cent decline in the number of households purchasing liquor, but those who were went 3.5 per cent more often. The spend per trip also fell (-2.3 per cent) as did the number of items were bought (-3.2 per cent).
NIQ Pacific managing director, Pete Sheridan, said, “The competition for share of consumer wallet is ramping up for liquor brands and retailers.”
NIQ’s Omnishopper liquor data showed Queenslanders were the most frequent liquor shoppers and averaged 16 trips in the latest 12-month period. South Australians spent the most per liquor shopping trip, averaging $62 per trip.
The data revealed that most major liquor retailers reported declines in the 12-month period to October 2023 versus the prior corresponding period.
Sheridan said its data found online liquor value sales declined by 18.1 per cent across major liquor retailers compared to the prior corresponding period, with all categories experiencing double digit declines. Surprisingly, RTDs experienced the steepest decline in online value sales by major liquor retailers.
“Online liquor sales experienced a boom in 2020/2021 and we are seeing this taper off and normalise,” Sheridan said. “Despite the current declines off the back of an arguably inflated period the prior years, we expect online sales to normalise and return to growth in the future.”
