State-level Legislation Continues to Grow Alongside Ready to Drink Market

By FOCUS, a Leonine Business

The alcoholic beverage industry is known for its ever-changing landscape, and one particular segment that has witnessed remarkable growth in recent years is the realm of ready-to-drink (RTD) alcoholic beverages. These convenient and pre-packaged drinks, also referred to as RTDs, have gained popularity among consumers seeking convenience, portability and a wide variety of flavors. However, just like the broader alcohol industry, RTDs are subject to a complex web of state-level laws and regulations. Also like the alcohol industry, legislation surrounding RTDs has soared in recent years. The alcohol industry has seen seismic shifts over the past decade, with at least 3,010 enacted bills since 2012. While only a more recent phenomenon, RTD legislation has boomed since 2020, with at least 134 bills introduced across the states.

Over the past few years, RTDs have experienced exponential growth in the marketplace, catering to consumers’ desire for convenience and diverse taste profiles. These beverages typically combine spirits, wine or beer with mixers and flavors, resulting in a range of refreshing options such as canned cocktails, hard seltzers and alcoholic iced teas. The appeal of RTDs lies in their portability, ease of consumption and the ability to enjoy a professionally mixed drink without the need for specialized bartending skills.

Like the broader alcohol industry, the regulation of RTDs falls under the purview of state laws, with each state possessing its own set of regulations and restrictions. This decentralized approach allows states to adapt regulations to their unique cultural, social and economic considerations. Consequently, it has led to significant variations in how RTDs are produced, distributed and sold across different states.

However, the rapidly evolving nature of RTDs poses challenges for both states and the federal government. As consumer demand for innovative RTD products continues to grow, state legislatures are frequently updating their regulations to keep pace with the evolving market. This rapid rate of change, coupled with potential inconsistencies between state laws, has led to a complex patchwork of regulations that can be difficult for businesses to navigate.

Given the interplay between state-level regulations and the desire for a standardized framework, the question arises as to whether there should be more federal oversight in the regulation of RTDs. A comprehensive federal framework could provide consistency and clarity for both businesses and consumers, ensuring a level playing field and facilitating nationwide distribution. However, since the prohibition era, regulation of alcohol has been almost entirely delegated to the states and any attempt to claw back such regulatory powers from the states would be difficult.

The world of ready-to-drink alcoholic beverages continues to expand, providing consumers with an array of convenient and refreshing options. However, navigating the complex landscape of state regulations while meeting evolving consumer demands remains a challenge. Striking the right balance of state-level regulation is essential to ensure the growth and sustainability of the RTD market. As the industry continues to evolve, collaboration and thoughtful dialogue among all stakeholders will be key to shaping a regulatory framework that fosters innovation, consumer safety and responsible enjoyment of RTDs.