Providing weather forecasts, warnings of hazardous weather, The National Weather Service notes that when conditions such as warm, humid air collide with cold, dry air, they converge to create a tornado. Within the beverage marketplace, experts note that the convergence of many consumer trends is fueling the ascent of ranch waters.
“The growth of ranch water in the marketplace is the culmination of three major consumer trends that we have seen in the past couple of years,” notes Joey Parris, CMO at Texas Ranch Water Co., MPL Brands, Sausalito, Calif.
The global tequila boom, paired with the seltzer craze and better-for-you categories, made for the “perfect storm” for Texas Ranch Water, Parris says. “Being an agave-based product that is light and refreshing with only 100 calories and 2 grams of carbs is an easy choice for consumers in this market,'' he adds.
Cara Piotrowski, client insights at Information Resources Inc. (IRI), Chicago, notes that simple ingredients, as well as the convenience of a ready-to-drink (RTD) cocktail experience and tequila-based cocktail trends, likely influenced the proliferation of ranch water.
“Canned ranch waters tend to have a similar taste profile as the original Texas-based ranch water, which lends itself to a more authentic cocktail experience,” Piotrowski says. “Some brands also offer fewer calories or carbs compared to top hard seltzers on the market.”
Typically made of tequila, experts note that the ranch water cocktail has quickly spread from its west Texas origin across the United States.
Liz Paquette, head of consumer insights at Boston-based Drizly, notes that, with the rise of ranch waters, Drizly has seen significant increases in consumer demand.
“Within the hard seltzer category on Drizly, popular ranch water brands like Lone River have experienced growth over the past few years — with Lone River scaling 700% of share from 2020 to 2022 to date,” she says. “Distribution has also increased signiﬁcantly year-over-year for Lone River’s variety pack; in January 2021, it was available in two states, and in January 2022, it was available in 28.
“With a rich history as the native cocktail to west Texas, a classic ranch water features tequila as the spirit base of the cocktail,” Paquette continues. “Tequila has been the fastest-growing spirits category in terms of share gains on Drizly over the past few years.”
Moreover, along with tequila’s strong performance, the growing reach of ranch water has been empowered by trends such as the continued growth of hard seltzers, according to London-based IWSR Drinks Market Analysis.
In its article, titled “Why have Diageo and Heineken invested in Ranch Water?” IWSR notes that ranch waters’ easy-to-mix and refreshing characteristics now have a much broader appeal.
“The growing reach of ranch water has been enabled by a host of ancillary trends, most notably: the continued growth of hard seltzers and RTDs; the strong performance of tequila; demand for refreshing cocktails that are easy to make at home; and low-calorie/low-sugar beverages,” it states. “Spying the opportunity presented by ranch water, in February 2021, Dutch brewer Heineken unveiled a line extension for its Dos Equis lager brand: Dos Equis Ranch Water Hard Seltzer. Then, in March 2021 Diageo acquired Texan producer Far West Spirits, maker of Lone River Ranch Water hard seltzer.
“With the backing of these companies and access to their extensive distribution networks, there is potential for ranch water to reach new consumers across the United States and perhaps further afield,” it continues. “For tequila brands, ranch water presents an opportunity to demonstrate relevance and ramp up consumer interest.”
Ranch waters’ expanding appeal
As tequila-based cocktails have historically focused on drinks like Margaritas, ranch water offers a low-sugar option for consumers looking for a lighter, tequila-based cocktail. In turn, the low-calorie/low-sugar nature of ranch water also reinforces tequila’s “better-for-me” image in the minds of consumers, experts note.
“Ranch water presents an opportunity for tequila brands to broaden their appeal and increase interest by diversifying the ways in which consumers can enjoy tequila,” Drizly’s Paquette says. “Ranch water likely has, and will continue to, beneﬁt from macro consumer wellness trends due to it being lighter in [alcohol by volume] (ABV) and calories.”
IRI’s Piotrowski notes that, although spirits-based RTDs have more brands with higher ABVs, most sales are in 4.5% ABV brands.
“There is not much variance in ABV between ranch waters and other hard seltzers,” she explains. “Most ranch water dollars fall into 5% ABV or less product offerings, while beer-based seltzer sales are driven by 5% ABV brands.”
Moreover, as ABV varies by brand, it is typical for canned ranch waters to have under 10% ABV, Drizly’s Paquette notes.
“The alcohol content in canned ranch waters is typically on par to popular RTD brands like High Noon, whose portfolio features 4.5% ABV, The Long Drink Co., whose portfolio ranges from 5.5-8% ABV, and Cutwater Spirits, whose portfolio ranges from 5-14% ABV,” she says.
Tequila Cazadores recently announced the launch of its new RTD canned cocktail: Ranch Water. The latest flavor, inspired by the Texas drink, joins the lineup of three additional Tequila Cazadores RTD cocktails: Margarita, Spicy Margarita and Paloma, which launched nationally last year. Ranch Water is a blend of sweet Tequila Cazadores Blanco, crisp sparkling mineral water and a hint of fresh lime juice, the company says. With a 5.9% ABV, each slim 12-ounce can of Ranch Water RTD is naturally gluten free and includes real ingredients and no artificial flavors, it notes.
“Tequila Cazadores has received an overwhelmingly positive response to the line of ready-to-drink (RTD) canned cocktails released last year. And the rise in popularity of ranch water cocktails felt like a natural progression for our consumers who enjoy the ease of a RTD beverage that has real tequila and real ingredients,” said Ashley Campbell, senior brand manager at Tequila Cazadores, in a statement. “As we celebrate the 100-year anniversary of our original tequila recipe this year, we’re excited to continue innovating with new products while staying true to our original tequila recipe developed in 1922.”
Although classic ranch water includes blanco tequila combined with lime juice and neutrally ﬂavored carbonated water or mineral water, canned ranch waters fall into two categories, Drizly’s Paquette explains.
“The ﬁrst is a ready-to-drink, which means it is a canned cocktail that is spirit-based and contains tequila — for example, brands like RANCH2O and Ranch Rider Spirits,” Paquette notes. “The second, a hard seltzer, is a shift from the traditional recipe and the alcohol comes from fermented cane sugar or malted barley — for example, brands like Lone River, Karbach Brewing Co. and Topo Chico’s new Ranch Water Hard Seltzer.”
More opportunities ahead
As ranch water broadens its reach across the beverage marketplace, innovation has spurred new ﬂavor varieties, experts note.
Texas Ranch Water’s Parris notes that introducing an agave-based hard seltzer, gives consumers a new flavor profile that rings true to a traditional tequila ranch water or tequila soda.
“From there we can innovate and create different flavors the consumers are looking for while still leaning on the fresh agave profile everybody loves,'' Parris says.
As lime, grapefruit and spicy are the most common flavor profiles, IRI’s Piotrowski predicts flavor expansion into other citrus and fruit profiles, as well as brands leveraging existing seltzer, tequila and RTD brand equities to offer a ranch water flavor/variant.
Drizly’s Paquette notes that innovation for canned ranch waters has also been a catalyst for new ﬂavor varieties.
“We’ve also seen new innovation in canned ranch waters, with brands branching into new ﬂavor territory,” Paquette says. “For example, Lone River makes ﬂavored varieties, such as Spicy, Rio Red Grapefruit and Prickly Pear.
“The alignment to the ready-to-drink category also provides opportunity for growth for ranch waters,” she continues. “Few other categories saw more growth over the past few years than ready-to-drink (RTD) cocktails, driven by consumers’ desire for high-quality, easy-to-enjoy, highly portable cocktails. Though the RTD cocktail category remains small on Drizly, it has made major gains.”
With endless opportunities in this space, consumer education is key, Parris says.
“Outside of Texas, a lot of people are just now becoming familiar with the cocktail. … As more and more people learn about the famous cocktail, [the category] will only continue to grow and find success especially amongst tequila lovers,” he concludes.