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No and low alcohol drinks may account for only a small portion of the global drinks market today, but over the coming years that could all change. IWSR Drinks Market Analysis expects consumption to soar, growing 31% by 2024, and the sector’s performance during Covid shows just how resilient it is in the face of disruption and changing consumer behaviour. We’ve taken a look at four key trends driving new product developments and changes in consumption habits which fine food retailers should be aware of.
The days when consumers could only choose from a few brands of non-alcoholic lager are long gone. Today, shoppers are flocking to the sector in such large numbers that The Society of Independent Brewers (SIBA) named no and low alcohol and ‘free from’ beers as one of the fastest-growing segments of the market last year. The group said almost 8% of its members produce no and low alcohol beers today, up from 5% in 2019, meaning that craft producers are increasingly interested in the sector. And this growth is set to continue “exponentially,” SIBA said. Brands like Big Drop are developing extensive ranges of craft, low alcohol beer, from ales to sour beers and IPAs to stouts.
A big driver of the low and no alcohol drinks market is a growing concern about health. Younger generations are thinking more about moderation and are concerned about alcohol’s impact on their health and wellness. In fact, according to YouGov research commissioned by Portman Group, Covid-19 led to a fifth of existing semi-regular consumers to increase their consumption of low and no alcohol drinks, and the most commonly cited reason given for making the switch was that they were trying to live a healthier life, to moderate alcohol consumption at home or reduce their overall alcohol consumption.
Today’s no and low alcohol drink producers often play up their healthy credentials to cater to these consumers. Brands like Fungtn, an adaptogenic alcohol-free beer brewed with functional mushrooms to give consumers an extra kick in the form of mind-boosting benefits, are transforming what an alcohol-free drink can be.
The market for non-alcoholic spirits has been growing apace ever since Seedlip launched onto the scene with its groundbreaking non-alcoholic distilled botanical drinks. Today, nearly every taste can be catered for with zero-alcohol products – from lagers and pale ales to gin-like botanicals, to darker spirits, aperitifs and wine.
According to data from IWSR Drinks Market Analysis, no and low beer and cider still accounts for a whopping 92% of the of the total market, but no and low beer registered a flat performance for the 2019-2020 period while spirits shot up by 32.7% by volume thanks to new interest in home experimentations among consumers. No and low alcohol wine also grew by nearly 5% globally in 2020, making the strongest gains in the UK and US.
According to YouGov and Portman Group’s research, the use of low and no alcohol products is being driven by current alcohol drinkers rather than teetotalers, with more than two-thirds at least trying alcohol free drinks and a quarter being semi-regular consumers. Indeed, the most commonly cited reason for the appeal of low and no alcohol was that it enables consumers to drive home and not drink excessively at social events, the research found.
Research by IWSR backs this up, with more than half (58%) of global no/low consumers reporting that they choose to switch between no/low and full-strength alcohol products on the same occasion, while only 14% said they do not drink alcohol at all.
For retailers, these trends paint a clearer picture of the typical no and low alcohol consumer. With producers making leaps and bounds in flavours and styles of alcohol-free drinks and more customers looking to moderate their consumption of alcohol with no and low versions of their favourites, this is a sector that fine food retailers should keep a close eye on.