A Distiller’s Guide to Creating a Winning RTD Pricing Strategy

You’ve crafted the perfect ready-to-drink (RTD) cocktail. Now, what’s the right RTD pricing strategy? It’s a question every distiller faces when entering the booming RTD market. The right price can position your product as a must-have for consumers, while the wrong price could leave it languishing on the shelf — or worse, eat into your profits.

The RTD market is fiercely competitive, and getting the price right is more than just math — it’s a balancing act between your costs, market trends and the story your brand tells. Whether crafting a premium canned cocktail or an everyday seltzer, pricing is the key to standing out, scaling up and keeping profits flowing. Whether you’re targeting weekend adventurers with a crisp spiked seltzer or cocktail connoisseurs with a premium pre-mixed Old Fashioned, your pricing strategy will determine how far your RTD can go.

Why Your RTD Pricing Strategy Matters

When it comes to RTDs, pricing isn’t just a number on the label — it’s a signal. The price tells consumers what they can expect regarding quality, taste and experience. Too low, and you might undermine your brand’s premium image. Too high, and you risk pricing yourself out of the market.

A strategic approach to pricing ensures you’re:

• Covering costs: Including every factor that goes into production.
• Capturing value: Reflecting the quality and uniqueness of your product.
• Staying competitive: Hitting the sweet spot that resonates with your audience.

So, how do you find that balance?Expanding into the RTD category requires agility. A multi-category beverage ERP is your best ally for:

• Tracking profitability across product lines: See how your RTDs stack up against your core spirits business.
• Simplifying compliance: Manage taxes, regulations and reporting requirements with ease.
• Scaling efficiently: Expand into new beverage categories without adding operational headaches.

A single source of truth for your distillery ensures you have data-driven insights into pricing competitively and profitably.

Key Factors for an RTD Pricing Strategy

1. Understand Your Costs Like a Pro

Your Cost of Goods Sold (COGS) is at the core of every pricing decision. This includes:

• Raw materials: Spirits, mixers and flavorings (Pro tip: Don’t forget seasonal fluctuations in ingredient pricing.)
• Packaging: Cans, labels, shrink wraps and other design choices
• Labor: Both direct (production) and indirect (overhead) costs

Why it matters: If you’re not tracking every cost, you’re flying blind. For instance, premium RTDs with high-quality ingredients will naturally cost more to produce, but they also justify a higher price point.

How to nail it: Leverage your beverage ERP to track COGS in real time. This ensures you capture every expense, from the smallest citrus zest to the last canning seal, so you know your break-even point before the product hits shelves.

2. Know Your Market — and Your Competitors

The RTD market is diverse, spanning everything from budget-friendly spiked seltzers to high-end espresso martinis. To price your product effectively, you need to know where it fits:

• Who’s your competition: Are you against major players with mass-market appeal or boutique brands targeting a niche audience?
• What’s trending: Packaging formats, serving sizes and alcohol content vary widely. For example, single-serve 250ml cans often carry higher margins than multi-packs.

Pro tip: Thanks to perceived quality, premium spirits-based RTDs typically command higher prices than malt-based alternatives. Use distributor and retailer insights to benchmark your price against similar offerings.

3. Consumer Perception is King

How do your customers perceive your RTD? If you’re marketing a pre-batched Old Fashioned as “bar-quality,” your pricing should reflect that. On the other hand, if you’re offering a fun, casual seltzer for beach days, your price needs to stay approachable.

Ask yourself:

• What does your target audience value most?
• Are you highlighting premium features like natural ingredients, craft distillation or unique flavor profiles?

The goal is to match your price to the story your brand is telling.

4. Think Beyond the Shelf Price

Your RTD pricing strategy isn’t just about what consumers see at the store. You must also factor in pricing for distributors, on-premise accounts (bars and restaurants) and direct-to-consumer channels.

Key considerations:

• Volume discounts for wholesale partners
• Pricing tiers for different markets
• Promotional strategies, such as limited-time offers or seasonal pricing

5. Keep an Eye on Regulations

Depending on your region, you may need to comply with minimum pricing laws, excise taxes or other rules. Make sure you’re familiar with the legal landscape to avoid surprises.

Leveraging ERP Data for Smarter Pricing Decisions

If your pricing process feels overwhelming, you’re not alone. This is where a robust multi-category ERP solution helps you win. With the right tools, you can streamline pricing, from cost calculations to sales analysis.

Here’s what that looks like:

• Centralize your data: With all your key metrics in one place, you can make informed decisions based on real-time insights.
• Track costs in real time: Monitor fluctuating ingredient and packaging costs so no expense goes unnoticed. Adjust your pricing accordingly without undercutting your bottom line.
• Analyze sales performance: Track the performance of your RTDs across different markets and channels. Are specific price points driving higher sales volume? Are premium SKUs outperforming value-oriented options?
• Optimize for profitability: Calculate margins, test pricing scenarios and identify opportunities to improve efficiency.
• Scale quickly: As you expand your RTD offerings, your ERP software grows, handling everything from new SKUs to compliance tracking.

5 Steps to Building Your RTD Pricing Strategy

1. Crunch the numbers: Start with an accurate COGS calculation. Use your ERP software to ensure accuracy and identify potential cost-saving opportunities.
2. Research the market: Understand competitor pricing and market trends. Consider direct competitors (other RTDs) and indirect competitors (wine, spirits, beer).
3. Define your goals: Are you prioritizing margins, market penetration or brand positioning?
4. Set your price: Combine your COGS, competitor insights and pricing goals to determine your baseline price. Don’t forget to include channel-specific pricing and volume discounts.
5. Launch, test and refine: Monitor performance and track data in your ERP. Be prepared to tweak your pricing strategy as needed.

Crafting a successful RTD pricing strategy requires more than guesswork. It combines data, market insights and a clear understanding of your brand’s value. With the help of Crafted BevX, distillers can confidently navigate the pricing process and set their products up for success.

So, what are you waiting for? Contact us today to see how Crafted ERP BevX can simplify your pricing process and drive profitability. Let’s get those RTDs flying off the shelves!