Dry January may be long over, but the growth trend for low and no-alcohol drinks persists. Whilst still a small percentage of the overall market, the low and no-alcohol category is one where there is significant consumer interest coupled with category innovation. The low-alcohol beer brand Lucky Saint has just opened its first pub in London and Guinness 0% features prominently across the Six Nations rugby. But what’s driving this? We see three trends - acceptance, availability and accessibility.
The stigma of moderating or eradicating alcohol has gone. It has become more acceptable for more people across more social occasions. Questions and eyebrows used to be raised when asking for a non-alcoholic soft drink in a pub, now nearly one in three pub visits don’t include any consumption of alcohol. The same survey showed 55% of adults plan to moderate their alcohol intake in 2023 and a massive 72% of UK adults had tried a ‘low or no’ alcohol drink. Clearly, something is changing in the way people think about drinking.
Some of this has been fuelled by a desire to reverse excessive pandemic drinking habits, but there are also more fundamental generational and lifestyle forces afoot. For example, less than half of 16 to 24-year-olds surveyed in an ONS survey had had a drink in the previous week, compared with nearly two-thirds of 45 to 66-year-olds. There is a whole host of reasons for this, from the digitisation of socialisation (less face-to-face, more phones and app-based chats) to drinking losing its potency as a marker of rebellion. For 20 and 30-somethings, there is a greater degree of self-awareness of the general well-being trend, as well as the cost-of-living crisis. This change in drinking habits doesn’t feel like a passing fad. A significant proportion of consumers are seeking to drink less, drink better and drink more mindfully. Habits have irreversibly changed, and this is being reflected in innovation and investment trends.
The British Beer & Pub Association (BBPA) claims 85% of pubs now serve alcohol-free beers. That’s nearly 40,000 pubs serving low or no-alcohol beers alongside their existing range of other non-alcoholic drinks and spirits. There is also an increasing amount of physical and digital shelf space dedicated to alcohol-free options. Tesco has 34 different beers, wines and spirits available online. Waitrose has 50, Amazon has 20+ different beer brands. Dedicated ecommerce platforms like Wise Bartender, Drydrinker and BoozeFree also offer consumers more choice. If you want a low or no option, it has never been easier to get one in a pub, supermarket, or delivered to your front door. This means the visibility of these options has increased, reaching a mass audience and raising overall awareness.
In the past opting for a low or no option meant limited choice and sacrificing taste. Luckily this time has long passed and there is proper innovation and curation by skilled mixologists, wine producers and beer makers. Historically it has been the spirits category that has seen the greatest flow of investment and new product launches. This market has been boosted by new entrants like CleanCo and Caleño as well as big names like Diageo adding alcohol-free drinks to their lines. In the UK there are now over 300 alcohol-free spirits available. Beer and wine are increasingly now the focus for established big producers and craft manufacturers, which is going to increase consumer choice.
So, looking into our crystal ball, what do we see happening in the future? Well, three things. First, the low-no category is going to get a lot bigger. Consumer habits have changed, innovation is increasing, and investment is flowing; continued future growth is inevitable. AB InBev, which owns brands like Budweiser, Corona, Michelob, and Modelo, had previously set a goal of making 20% of its beer volume non-alcoholic and low alcohol by 2025. Global View Research predicts the overall market for non-alcoholic drinks could be worth $1.6 trillion by 2025.
Second, it’s going to get more physical. We’re going to see more dedicated retailers and pubs where low and no play a leading role vs supporting. This is important as it showcases the category, makes it more accessible and encourages sampling and experimentation. The Club Soda, a shop and tasting room in Covent Garden is a brilliant example of this, with events and training to encourage mixologists to design new ways of using ingredients.
Third, we’re going to see more hybrid and functional products available, appealing to a broader audience. Some of these will be for health-conscious consumers (e.g. Rally with extra electrolytes to aid recovery), others will be for those seeking a ‘buzz’ similar to alcohol but without the risk of a hangover – like Impossibrew and Fungtn, made with mushrooms.
Whilst these changes won’t happen overnight, they’ve been brewing for some time and now the bar has been raised, the world of low and no-alcoholic drinks has come out of the shadows.