You’ve seen the statistics and the headlines – RTDs are catching a buzz right now with consumers. If you’re contemplating adding a Ready to Drink (RTD) cocktail to your product lineup, now is the time to do so. As a spirit producer, you’re likely well-versed in the topics for consideration listed below when it comes to booze, but as Mark Shilling of Uncle Billy’s Spirits says, RTDs often require “an entirely new business plan” and way of thinking to ensure success. Keep reading for our compilation of important considerations for distilleries of any size when expanding into RTDs.
If you’re a distillery diversifying your product line with RTDs, the obvious starting point for your recipe will be your spirits or a high-quality NGS. As with any spirit recipe, all RTD recipes must be approved by the TTB. RTDs are recognized by the TTB as Distilled Spirit Specialties (DSSes) and there are strict regulations around what a DSS can and cannot contain. Perfecting the recipe is easier said than done and requires a different thought process than developing recipes for behind the bar. Of the many considerations, some of the most important to note are:
- Keeping the integrity of the flavor of your spirit and ensuring the canned version lives up to its reputation when pre-mixed and canned/bottled
- The shelf-life of citrus, a major consideration in fresh-squeezed citrus vs. pasteurized fruit juice (which often compromises flavor but doesn’t degrade as quickly)
- Ensuring you have consistent suppliers for all necessary ingredients
- Striving to make your recipe stand out from the (highly saturated) crowd
The first decision for packaging your RTDs is whether you’ll be using bottles or cans. There are arguments to be made for both – cans are more durable and compact than glass and are allowed in a wider variety of drinking settings (such as pools), in addition to costing less to ship thanks to less weight. Glass is more widely available and does not necessarily require the purchase of additional equipment like a canning line. This decision is an important one to make early on and will likely dictate your production process going forward. Some additional considerations:
- Canning and carbonation are technical processes that require additional capital investment in equipment
- Current supply chain issues and shortages with aluminum cans
- Product storage, as aluminum cans can warp or change the flavor of the RTD
- Supply storage for the additional bottles and cans required
- Waste management, as RTD producers estimate 30% of volume produced is lost to exploding cans and broken bottles
An alternative route some distillers have chosen is to work with a co-packer for their RTDs to eliminate the trial and error (and therefore large amounts of waste) in figuring out bottling and canning themselves.
Finally, when it comes to packaging, branding will play a huge part in whether your RTD gets picked up off the shelves over a competitor. As influencer marketing becomes a larger avenue for companies to increase brand awareness and generate demand, your packaging plays a more important part in your success than ever before. Will you use sleeves or print directly on your bottle/can? Will you use your distillery’s branding or launch a completely new product line with a new name and branding?
Distribution proves itself the most difficult part of the spirits industry time and time again, with challenges ranging from finding the right distributor for your goals to ensuring they deliver what is promised. Will you begin with test locations with your existing clientele? Do you have a tasting room from which you can test and generate demand for your new product? Do you already have a solid relationship with a distributor you can leverage for your new SKU(s)? Before you begin producing your RTDs, cover these bases first:
- How many points of distribution are you aiming for?
- Do you already have a relationship with a distributor? If so, consult them about their capabilities in distributing RTDs.
- What is your distributor’s track record? Will they deliver?
- Does your state allow self-distribution?
Arguably one of the most important factors in running a successful distillery is staying compliant. Regardless of what you’re producing, you’re responsible for accurate and timely TTB reports. If you’re producing spirit and RTDs, spreadsheets and paperwork can get confusing and out of sorts fast. Below are just a few ways software can save you from compliance headaches and stress:
- FIVE x 5 systems automatically convert spirits to DSS and maintains records of a change in standard identity.
- You only have to record an RTD recipe or formula once. Once you save a recipe/formula in your system you can apply it to bulk spirit runs and the system will apply automatic material adjustments and conversions.
- DISTILL x 5 has a dedicated RTD resource center with guides on setting up an RTD in your system, production processes, and co-packing resources such as how to transfer in-bond, and blending or withdrawing bulk spirit.
- Keeping track of all of your data (inventory, production, reports) for your spirits and RTDs in one place means you aren’t ever caught off guard by shortages.
- Your TTB reports are auto-generated by your system along with timely reminders to submit.
Current DISTILL x 5 customers can access the RTD Resource Center by searching terms in the Support Hub such as RTDS, Ready to Drink, Canned Cocktail, Co-pack, etc. If you’d like more hands-on guidance (whether you’re a current client or not), you can schedule a Consulting Session with our in-house expert. Finally, if you’re looking to launch your own RTD and are still relying on spreadsheets for TTB reporting, contact us today to see how software can make your life easier!
*featured image from Washington Post