High spirits.(alcoholic beverages demand, prices and marketing)(Industry overview)

Despite rising VAT and tough economic conditions, the white spirit market is strong, with RTD products shaking up the sector, writes Jane Bainbridge.

Only a few years ago, the decline of the ready-to-drink (RTD) market, as brands such as Bacardi Breezer and Smirnoff Ice lost their lustre, looked unlikely to be reversed. Stories of its demise, however, appear to have been premature, as premium ready-to-serve cocktails and spirit-and-mixer combinations have reinvented the sector. Although far removed from the era of alcopops and FABs (remember those - flavoured alcoholic beverages?) they are nonetheless aimed at 18- to 24-year-old drinkers.

While innovation in any category is good news, there is a real risk that this wave of new RTDs will cannibalise the white spirits market. RTDs are fulfilling a need all round. They are convenient, affordable and bringing in a better margin for producers, thanks to the lower tax applicable to these reduced-ABV drinks compared with straight spirits.

A surge in the popularity of …