Canned Cocktails Hit One Billion

In brief

• IWSR’s confirmed 2025 data: total alcohol volumes fell 2%, about 500 million cases, the third straight annual decline. Beer fell 2%, wine 5%, spirits 3%. RTDs were the only major category to grow, up 3%, and passed one billion nine-litre cases for the first time.
• Inside RTD the winner is the cocktail, not the seltzer: RTD cocktails grew 14% globally in 2025, while hard seltzer volumes have fallen every year since 2021 and US malt-based RTDs dropped 5%.
• IWSR forecasts RTDs up 17% by 2035 while wine falls 14%. Premium-and-above RTDs grew 15% by volume in 2025; US super-premium RTDs rose 37%.
• Diageo chief executive Sir Dave Lewis says the company “created this space with Smirnoff Ice 25 years ago, but we lost focus.” Its RTD share has fallen from about 25% in 2008 to under 10%, and it is now reorganising around “total spirits, including RTDs.” Analysts warn the category can be a fad.

Act One

A billion cases, while everything else shrinks

Start with the shape of the market, because it is unusual. According to IWSR’s confirmed data for 2025, total beverage alcohol fell 2% by volume, roughly 500 million nine-litre cases gone in a year, and the third consecutive annual decline. Beer fell 2%. Wine fell 5%, and for the first time since records began in 1990, the world drank less wine than spirits. Spirits themselves fell 3%. Every established category contracted. One did not: ready-to-drink grew 3%, and in doing so crossed one billion cases for the first time.

Two things about that table matter more than the headline. First, the growth is not evenly spread across cans; it sits in cocktails, up 14%, and at the premium end, up 15% by volume and 21% by value. This is not a race to the bottom. Second, the forecast. IWSR expects the can to grow 17% over the next decade while wine falls 14% and everything else drifts down. A category that is one billion cases today and the only thing on the shelf with a positive slope is not a trend. It is where the industry is going to have to live.

The why is the least glamorous part. In IWSR’s own words, consumers in 2025 were “seeking flavour exploration, convenience and ABV diversity to suit their consumption occasions,” and in the US, cost is now the single most common reason people give for drinking less, cited by 31% of drinkers. A can is a known price for a known outcome. Against a $16 bar cocktail or a $50 bottle, that is a proposition that does not need advertising.

Act Two

Hard seltzer won the pandemic and lost the war

Now look inside the billion, because it hides a reversal. In 2020 hard seltzer was the story: US volumes grew 130% in a year, IWSR predicted the category would triple by 2023, and White Claw briefly looked like the future of alcohol. It was not. Per the Spirits Business’s analysis, hard seltzer volumes have fallen every year since 2021, down 10% globally and 11% in the US between 2021 and 2024, and the US is 93% of the world’s seltzer, so there is no other market to save it. In 2025 US RTDs as a whole dipped 1%, the first annual decline since 2015, and the reason is entirely the seltzer: malt-based RTDs fell 5% while spirits-based RTDs grew 14%. Boston Beer has said outright that Truly lagged.

The interesting question is why, and IWSR’s three words answer it: flavour, convenience, ABV diversity. Seltzer had convenience and nothing else. Every can was the same proposition, five per cent, one hundred calories, a fruit, and once a hundred brands offered it the category became a commodity with nothing left to say. Canned cocktails have the opposite problem, which is a good problem: they are recognisable drinks with names people already order, they span everything from a 4.5% spritz to a 37% Old Fashioned in a 100ml can, they can be premiumised because there is a spirit inside to premiumise, and they can be blind-tasted against a bar drink and, occasionally, win.

I saw this in the glass before I saw it in the data. When I blind-tasted 17 canned cocktails against fresh versions, the best of them lost narrowly and one beat the bartender; when I ranked the hard seltzers, the honest conclusion was that the top ten were separated by fruit choice. One category has somewhere to go. The other has arrived, and there is nowhere to go from arrived except down.

Seltzer had convenience and nothing else. Once a hundred brands offered it, the category became a commodity with nothing left to say.

Act Three

Diageo invented the category, lost it, and wants it back

Which brings us to the company that saw all of this first and then forgot. In Diageo’s 2026 annual report, published last month, chief executive Sir Dave Lewis wrote something unusually candid for a document of that kind: “We should not treat RTDs as separate from spirits. Consumers come to many RTD occasions with similar motivations to spirits occasions, and RTDs are increasingly important to how consumers engage with our brands; they are portable, consistent and represent good value for money versus an on-premise purchase. We created this space with Smirnoff Ice 25 years ago, but we lost focus.”

“We created this space with Smirnoff Ice 25 years ago, but we lost focus. We are now aligning RTDs with our spirits brands and reassessing the opportunity.”

The numbers behind that admission are stark. Diageo’s share of the RTD market has fallen from about 25% in 2008 to below 10%, over exactly the period the category went from alcopop punchline to a billion cases. The brands that won, High Noon, Cutwater, Surfside, were new-to-world canned cocktail brands, not line extensions of a spirits portfolio, and Diageo owns none of them. What it does own is the original: Smirnoff Ice, which it calls the “OG” RTD, now close to a half-billion-dollar brand in the US, plus a range that runs from Casamigos Margaritas to a Johnnie Walker Old Fashioned and a Tanqueray Negroni in cans.

Lewis’s first results in February set the tone. Diageo’s spirits RTD portfolio grew net sales 17% in the half while the company as a whole shrank, Smirnoff RTDs grew around 13% and gained share in four of five regions, and Lewis told analysts that “young people are choosing RTDs, but they’re choosing RTDs with higher ABV, which gives some indication of their attitude towards this category. We believe there’s a very significant and profitable opportunity for Diageo in RTDs, but we have work to do.” The annual report goes further: the company is redefining the market it competes in as “total spirits, including RTDs,” with Guinness the other growth engine. That is a $60 billion company saying the can is not a sideline. It is the spirits business.

Not everyone is convinced. Deutsche Bank’s analyst called a more proactive RTD push positive for the shares but flagged the risk that it is “just a short-lived fad and any growth proves temporary.” A drinks strategist quoted by the Spirits Business called the category “fickle,” noting that a brand built for the 2020s is not guaranteed to work in the 2030s, which is exactly what happened to Smirnoff Ice and Breezer the first time round. The seltzer collapse in Act Two is the proof that the warning is not idle. The counter-argument is the billion cases and the ten-year forecast. Both can be true: the category is durable, individual brands are not.

What it means, honestly

For the industry, the arithmetic is uncomfortable and clear. The only growing category is one where the margin per serve is lower than a bottle, where the winners so far have been outsiders, and where the customer is explicitly trading down. Diageo, Brown-Forman, Sazerac and the rest are chasing growth into a format that pays them less per drink than the thing it replaces. That is why Scotland is switching off stills and Kentucky is idling distilleries while the same companies build canning lines: the volume is moving to a place where volume is worth less.

For the drinker, it is mostly good news with one warning. The competition among 750-plus US canned cocktail brands has made the good ones very good, and a $4 can that is 90% of a $16 bar drink is a real bargain. But cheaper is not the same as better, and a category that grew because people are counting pennies will contract the moment they stop or the moment the can stops being cheap. Read the ABV, because the standard-drink maths in a 37% can is nothing like a 5% one. Read the base, because the winners are spirits-based and the losers are malt. And read the room: the younger drinkers who made this category are the same ones killing the six-pint night, and they will move again when something suits them better.

Quick answers

How many cases of RTDs were sold in 2025?

One billion nine-litre cases globally, the first time the category has reached that level, according to IWSR’s confirmed 2025 data. RTDs grew 3% while total alcohol fell 2%.

Is the alcohol industry shrinking?

Yes. Total beverage alcohol volumes fell 2% in 2025, the third consecutive annual decline, with beer down 2%, wine down 5% and spirits down 3%. RTDs were the only major category to grow.

Why is hard seltzer declining?

Hard seltzer volumes have fallen every year since 2021, down 11% in the US between 2021 and 2024. The proposition became crowded and identical across brands, while spirits-based canned cocktails offered recognisable drinks, wider ABV choices and premium tiers. US malt-based RTDs fell 5% in 2025 while spirits-based RTDs grew 14%.

What has Diageo said about RTDs?

Chief executive Sir Dave Lewis wrote in the 2026 annual report that Diageo “created this space with Smirnoff Ice 25 years ago, but we lost focus,” and that the company now defines its market as total spirits including RTDs. Its spirits RTD sales grew 17% organically in the first half of fiscal 2026, though its RTD market share has fallen from about 25% in 2008 to under 10%.

Will canned cocktails keep growing?

IWSR forecasts RTDs will grow 17% by 2035 while wine falls 14%, beer 1% and spirits 2%. Analysts caution that individual brands in the category can be short-lived, as hard seltzer showed, even if the category itself endures.

Which RTDs are growing fastest?

Spirits-based canned cocktails, up 14% globally and in the US in 2025, and premium-and-above RTDs, up 15% by volume. US super-premium RTDs grew 37% from a small base.

The last word

For a hundred years the drinks industry sold the bottle and the bar, and the can was what you drank on the way to either. In 2025 the can became the only thing growing, and the men running the biggest companies in the business have stopped pretending otherwise. Hard seltzer was the first draft of that future and it has already been rewritten. The second draft is a cocktail, with a spirit inside, a name you know, and a price you can justify on a Tuesday.

The can did not win because alcohol is dying. It won because alcohol got expensive, and the can is the cheapest way to keep the habit. Everything else, the billion cases, the seltzer collapse, Diageo’s confession, follows from that one sentence.

Diageo invented the category, lost it, and wants it back. The category, meanwhile, has never needed Diageo less.