Crystal Light vodka seltzer launches in crowded RTD cocktail category

Growth in the ready-to-drink alcohol space is continuing to draw the attention of consumer packaged goods brands, with crossover products blurring the lines between supermarket shelves and liquor stores. The latest comes from Kraft Heinz, which is now marketing Crystal Light Vodka Refreshers, made in partnership with Massachusetts brewer Barrel One Collective. Crystal Light is betting that its existing brand attributes—a sugar-free formulation and association with healthier lifestyles—will create differentiation in a space primarily focused on social occasions. The brand’s confidence comes from Crystal Light’s own consumers, who’ve been using the powdered beverage to mix their own cocktails for years, the brand stated. Still, it is taking a measured approach, beginning with $9.99 four-packs at select retailers in the Northeast, with plans for “a larger expansion, new flavors and multipack options in 2026,” it stated. Become an All Access subscriber Get access to exclusive resources including Leading National Advertisers, World’s Largest Advertisers, Agency Report, Agency Review Tracker and TV Pricing Report. Click here Crystal Light is only the latest well-known brand to join the canned cocktail boom. Dunkin’ Spiked, an alcoholic iced tea associated with the Dunkin’ coffee chain, is also brewed by Barrel One. Drink brands Mountain Dew, Ocean Spray, Topo Chico and SunnyD are among those moving in recent years to share in the growth of RTDs. Coca-Cola Co. has a division (Red Tree Beverages) devoted to driving its growth in alcohol. Its deal with Molson Coors includes both Topo Chico Hard Seltzer and Simply Spiked. Coca-Cola also markets canned Jack & Coke via a partnership with Jack Daniel’s. ‘A few will succeed’ Observers contacted by Ad Age said the crowded RTD space could only accept so many brands, and those that succeed will need more than a good name. “The bladder isn’t big enough to handle them all,” said Gary Stibel, CEO of New England Consulting Group. “A few will succeed, but the ones that succeed will be based upon good marketing, not just good product.” Existing brand associations can give new alcohol products advantages in name awareness, distribution and retail support, and come with marketing budgets that are often larger than comparable startups, said Dave Williams, president of alcohol consultant Bump Williams Consulting. While that gives them an advantage at trial, sustained success requires something more. “Brand awareness comes with expectations among those consumers familiar with the non-alcoholic alternatives, and if those expectations are not met in the form of flavor, taste and/or experience, the repeat phase of the purchase cycle may be met with some struggles,” Williams said. “Alcohol is a different ballgame when it comes to space, regulation, marketing and competition, making it far from a sure thing despite the clear opportunity.” Health opportunity A health and wellness proposition is relatively new for the RTD space, which lacks the well-developed “light” division that beer has. Crystal Light’s vodka seltzers contain a mild 3.8% alcohol by volume, no sugar and just 77 calories per can—a formulation that speaks to current lifestyle and diet trends, said Barry Thomas, senior global thought leader for Consulting by Kantar and a former Coca-Cola executive. “The younger set is looking for decelerated occasions—a night to remember instead of a night to forget,” Thomas said. The practice of alternating low- or no- alcohol drinks with full-strength beverages—known as “zebra striping”—is what Gen Z wants in nightlife, he said. Around 10% to 12% of Americans are currently on GLP-1 drugs like Ozempic, Thomas said, “and when you get on that, your whole relationship to food changes. These consumers are looking for a healthier, lower alcohol solution.” GLP-1 users “are not just looking to reduce calories, they are looking to reduce alcohol consumption,” added Virginia Lee, a food and beverage consultant and writer for The Food Institute. Lee said consumers generally like nostalgic flavors from the CPG world “and want to get a light buzz.” According to Kraft Heinz, there are “tens of millions of social media videos” demonstrating Crystal Light as a cocktail mixer. That practice could fall out of favor as demand for more convenient pre-mixed cocktails grows. @jaki_alma My beat friend taught me this recipe, Spiked water for the beach! #spikedwater #crystallight #titosvodka #stanleycup ♬ TRR TAC TAC - De Parranda & Los Morales Expanding to the alcohol space can help brands find new audiences and new relevance, said Kaitlin Ceckowski, associate principal consultant at Mintel. “They are facing a lot of competition in the powdered drink mix space,” Ceckowski said of Crystal Light. “Brands like Liquid IV, LMNT and Gatorade have introduced advanced functionality. This move modernizes Crystal Light, because the seltzer space is relevant.” Competitors have grown While the total alcohol and spirits categories have declined since the COVID boom, RTD cocktails have gained household penetration, Debra Crew, CEO of Smirnoff Vodka Seltzer parent Diageo, said at last month’s Consumer Analyst Group of New York (CAGNY) conference. And among Gen Z, household penetration of spirits was up six percentage points to 55% in 2024, compared to 2020, she added. “We believe spirits-based canned RTDs have played a role in this as Gen Z increasingly enter [alcohol] in this category versus historically entering in beer,” Crew said. The category includes fast-growing brands such as Anheuser-Busch InBev’s Cutwater and Nutrl, which grew by 25% and 36%, respectively, over the four weeks ended Feb. 23, according to Circana figures reported by Beer Marketer’s Insights. The volume of brands in the emerging RTD space is such that it inspired a “Saturday Night Live” sketch, and observers will be watching to see how Crystal Light’s proposition plays out. “I don’t think the introduction of one more brand is going to send High Noon or White Claw scrambling,” Ceckowski said. “I do think the emphasis this places on low-calorie and low-ABV could encourage other hard seltzer brands to reconsider how hard they focus on those aspects. Historically, the marketing for these brands have focused on the social aspects over the health benefits—beaches or festivals. This intro could cause the existing players to reconsider how much they should flex their own better-for-you benefits.” Generally, native RTDs such as Twisted Tea, White Claw and High Noon have outperformed crossover brands like AriZona and Lipton hard teas, Simply Spiked and SunnyD vodka seltzer, said Williams. Many of those brands have encountered challenges in year two, had added, but it “does not seem to have slowed the pipeline very much … we have yet to see many of these crossover products really shoot up the rankings and sustain their performance.”

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