(Photo: Surfside)
The ready-to-drink market has rapidly evolved in the past few years. Were you to take a trip to your local convenience store in the 2000s, Four Loko would have been the prominently featured name. A few years later, hard seltzers trickled into the market and eventually kicked into full effect in around 2018 with brands like White Claw and Truly gobbling up the shelves. Fast forward to 2025, and the era of the Claw is drawing to a close. Nowadays, it's all about the spirits-based cocktail — oftentimes vodka sodas.
Surfside — an unassuming iced tea and vodka canned beverage — was the fastest-growing alcoholic beverage brand in America in 2024, according to the brand, witnessing growth of 360% within 365 days. On the shelf, it competes against products like High Noon (the best-selling spirits brand by volume in 2023) and Kylie Jenner's recently launched Sprinter Vodka Soda (easily the biggest celebrity-backed name in the category).
So what happened to the hard seltzers of yesteryear?
They certainly haven't vanished. Malt-based hard seltzers, which are made with the same alcohol you'd find inside a beer, as still the biggest player in the ready-to-drink beverage market. But their market share is decreasing fast. From 2021 to 2023, malt-based products shrunk from 91% to 83% of the RTD market volume. Spirits-based products doubled from 8% to 16% in the same time frame.
The trend could broadly be described as a move toward premiumization, a catchy buzzword within the alcohol industry that describes a "drink less but better" mentality.
It helps that these products often position themselves as direct replacements for their successors. High Noon is the spirits-based upgrade to White Claw; Surfside, the logical next step beyond Twisted Tea. This trend is especially apparent when it comes to fully flavored cocktails. For years, malt-based products like Lime-A-Rita and Chi Chi's proudly advertised themselves as margaritas despite lacking the key ingredient that defines the cocktail. Now, consumers can easily find a canned margarita made with actual tequila.
This movement shouldn't be misinterpreted as an upheaval of the status quo, especially when the same major players stand to gain. Cutwater and NUTRL, the second- and third-biggest spirits-based RTD brands in the U.S., are both owned by Anheuser-Busch InBev, the conglomerate behind Bud Light. We've also seen former favorites like White Claw adapt fast, rolling out vodka- and tequila-based twists that benefit from enormous name recognition.
The biggest struggle for the category from here on out is pricing and distribution. If you've ever purchased one of these products, there's a good chance you're already vaguely familiar with the issues.
For one, states like Texas, Florida and New York forbid the sale of liquor in grocery and convenience stores, cutting out a huge swath of potential customers that may otherwise be casually introduced to the product. Malt-based beverages, meanwhile, are available wherever beer is sold — that is to say, just about everywhere.
The bigger hurdle comes by way of taxes. Taxes are generally applied on a sliding scale that coincides with the alcohol content of a beverage; 5% ABV may demand a 5-cent tax, 10% ABV a 10-cent tax, and so on and so on. However, that sliding scale is applied differently to different RTD products. The federal excise tax on a 6% ABV malt-based is currently 5 cents. For a 6% ABV spirits-based, it's 15 cents.
Those higher prices are then passed on to the consumer, especially so in states that add on additional taxes. Adam Smith, vice president of state public policy for the Distilled Spirit Council of the United States, recently claimed that the North Dakota tax rate on spirits-based RTDs is more than 15 times the malt- and sugar-based RTD state tax rate.
States like North Dakota, Michigan and Nebraska have slowly but surely introduced laws to remedy the discrepancy. But it's an uphill battle; RTD prices have often remained high even in regions that have successfully passed tax reforms.
As heavy hitters like Anheuser-Busch muscle in on the market, there's a good chance that those reforms will be sent into overdrive. In a few years time, spirits-based RTD lobbyists (what a thought) may well spell the doom for hard seltzers once and for all.
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