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Swing low: industry experts weigh in on the state of alcohol
The non-alcoholic sector has been gaining increasing attention in light of the booming wellness trend. Callum Tyndall talks to industry experts to find out what you need to know about the state of the sector and where it’s headed.
Image Courtesy of Stephanie Frey/Shutterstock.com
The demand for alternatives to alcohol has been growing in recent years as consumers increasingly seek products that align with the wellness trend. The struggle has been to find products that could qualify as ‘adult’ soft drinks, going beyond the staples of high-sugar sodas or fruit juices to provide an experience equivalent to an alcoholic beverage.
The tide is turning, however, as producers both big and small invest into the sector and unveil everything from no-alcohol versions of established beers to entirely new botanical concoctions.
The sector is still fairly nascent in its success however, and there is a long road ahead before we can consider it a full challenger to the behemoths of the alcohol market. Questions remain over how much this is tied into the wellness trend and whether that could lend to such success being a fad, and what the future holds for the market.
In order to get a better grasp on the low- and no-alcohol sectors and how they are evolving, we gathered experts from across the industry to lend their insight.
Inside Drinks: What's your view on the current state of the low and no-alcohol markets?
Mike Nolan, CEO of Product of the Year UK and co-owner of Black Dog Sparkling Wine and Hairy Dog Beer
Attitudes to drinking have changed in a big way over the years. Health awareness, rising cost of drinks in pubs and bars and changing trends around drinking alcohol have all contributed to this attitude shift. In terms of our health, the current, but ever changing view is that there are potential damaging effects of having even one glass of wine, let alone many - yet we cannot deny that drinking is a huge part of our culture. We Brits love the pub!
Alcohol brands have responded to this shift in consumer interest with an array of non-and-low-alcohol options that have emerged over the years. These range from non-alcoholic imitations like Heineken Alcohol-Free 0.0% Lager which seeks to provide an almost identical taste experience to the original alcoholic Heineken and it is a serious contender in the hangover-free lager space. Meanwhile, the alcohol-free spirit drink Seedlip has disrupted its sector with its mock gin geared at the premium market, artfully concocted with herbs and botanicals. Both aim to offer the experience of alcoholic drinks but also allow people to safely drive home at the end of the night.
Andrew Turner, director of Wine for Halewood Wines & Spirits, which manufactures Eisberg Alcohol Free Wine
World Health Organisation data found Britons are on average drinking less alcohol, with consumption falling from 12.6 litres of pure alcohol a year per adult in 1990 to 11.4 litres in 2017. Just over one in ten of us say they are looking to cut down their alcohol consumption. And while most are doing this by simply drinking less, some are turning to low or no-alcohol products (Neilson April 2018 to April 2019) - with the ONS reporting that drinking rates are at their lowest in 18 years.
Drinking habits are changing, inspired by an increasing desire from consumers to be more health conscious. As a result, the alcohol free sector continues to grow across the UK and in all channels as a supplement to soft drinks, with an increase in demand for alcohol free beverages aimed at adults who want alternatives to sugary fruit juices, stand-alone tonics and sparkling water.
John Hadingham, MD at St Peter’s Brewery
We are seeing growth across the on and off trade for our Without brand of zero alcohol beer. The off trade is definitely leading the way with interest in exploring new options to meet the consumer demand. We are seeing volumes grow with our current retail listings and are actively working on many new opportunities.
Within the on trade we are seeing great gains across the UK within managed and free trade. Rate of sale from the fridges for our bottle listings are above expectations and perhaps suggest the growing consumer interest and motivations towards alcohol-free drinks. We also see operators meeting this opportunity with better menus communicating low and zero ranges.
We are working to help operators meet the opportunity with brand training and point of sale materials. Low and zero should be served with as much diligence as any other drink. Too often consumers asking for a low/zero beer receive a second class serve oddly, which just shouldn’t be the case.
Draught is also growing. We all know competition is fierce for taps on the bars but we are seeing growth. Perhaps an advantage here for the larger brewers who can control many of the available taps, although this can only be good to support the consumer demand and overall category penetration.
Inside Drinks: What do you think is driving growth in these markets?
According to analysis from the NHS, young people in the UK are not drinking anywhere near as much their elders. Nearly a third of the 10,000 16-24 year surveyed said they never drink.
Brands are cleverly finding ways to tap into this mind-set and, most importantly, not infantilising or ‘making fun’ of non-alcoholic options. Brands are having to work harder to impress with complex flavours, beautiful designs and creating their price category.
There is a sea change in attitudes to non-drinking (especially from my youth) to a far more enlightened, smart and tolerant view amongst that key group. This is giving rise to the opportunity for brands to create genuinely cool and desirable non/low alcoholic drinks without the fear of being sneered at among our peers. It is a truly exciting prospect for this sector.
Wise brands build a story around their product in order to have that competitive edge in the busy drinks market. Tenzing clearly does this with a passage to India - the product inspired by Himalayan Sherpas, whereas Fentiman’s Rose Lemonade is like an English garden in a glass bottle, with a rose tint and botanical ingredients.
Look, it’s clear and obvious that alcohol isn’t going anywhere, but actually what has changed is that we now have far more variety and compelling options should we choose not to drink.
The latest Moving Annual Total shows that the alcohol free beverage category has increased by £1.6m (Nielsen 52 weeks to 08/09/2018). Eisberg is leading the way in alcohol free wine, with 60% market share (Nielsen 52 weeks to 23/03/2018).
This means alcohol free drinks, and organic options, continue to be a massive trend. As many as one in five people - one in three of those under 24 years old - are choosing not to drink because of the increased awareness of the health risks associated with alcohol.
But your teetotal consumers still want premium soft drinks at home and when they are socialise. We still have a loyal base across all age groups both older and younger, thanks to a combination of Britain as a whole moving towards healthier choices, as well as the increasing crack-down on drinking and driving. This isn’t limited to those who choose not to drink at all, but also those who simply want to cut back on their intake.
Sonja Mitchell, founder of Jump Ship Brewery
Growth in the sector is being driven by a younger generation who have never started drinking alcohol, and existing drinkers who want to cut back on alcohol for their health and wellbeing. Increasingly stringent laws on drink driving, especially in Scotland, also play a part. For years, the alcohol-free choices on offer were pretty dismal, but now consumers are being offered an increasing range of delicious, high quality alternatives.
The low and alcohol free sector is growing fast, and that is set to continue. Britain has still got a way to go before we catch up with European neighbours such as Spain, where about 13% of the beer market is no or low-alcohol. Significant investment from brand such as Heineken and Budweiser will help to grow the category - as they've improved the quality of their beers and are putting serious money into convincing consumers to try alcohol free.
There are many reasons for the growth of the low/no alcohol sector, whether for total alcohol abstinence or alcohol moderation, health lifestyle, religious reasons, or simply a tasty beer for the designated driver.
From my own experiences it is great to see more low and zero-alcohol products being listed. Being almost teetotal myself due to health reasons (apart from enjoying the sampling sessions at SPB) and often the designated driver, I no longer have to resort to soft drink syrups from the gun. Instead I have a considerable choice of delicious low and no-alcohol drinks to choose from.
There have been 271 premium soft drink launches in the UK in the past 12 months, while there were 42 non-alcoholic spirits on the market in October 2018, up from only four in April. More than half of restaurants in London provide non-alcoholic spirits, while 42% of respondents who work in the capital’s on-trade expect non-alcoholic spirits, aperitifs, beer and wine to play a key role in their overall sales mix during the next twelve months, driven by consumers wanting a better choice of non-alcoholic drinks. Key trends focus on meaningful experiences, curiosity around flavour and more options. In the UK, 59% of people order non-alcoholic drinks on a night out when they are also drinking alcohol, while three quarters of “influential consumers” expect venues to offer “niche and interesting drinks”.
Inside Drinks: Big alcohol brands increasingly look at producing no-alcohol products or buying up no-alcohol brands. Do you think this is a self-preservation move?
No, but it is smart and it also looks to give people what they want. I don’t think releasing a non-alcoholic drink to the market is a survival move for alcohol brands, but I do think it is a smart move for any brand to remain a competitive force in the marketplace. Expand your product options to increase choice for your customers and then maybe they will buy more.
Many brands are also responding to their customers calling out for a non-alcoholic version of the originals. People might choose not to drink for any number of reasons, but still want to enjoy the flavour of their favourite drinks. The non-alcoholic options just provide more variety and a sense of occasion, which is surely a natural progression for alcohol brands?
Luke Boase, founder of Lucky Saint
The big brewers are all making non-alcoholic variants of their existing brands, be it Becks 0.0, San Miguel or Heineken Blue. The big question is whether these products and brands resonate culturally with modern consumers who are seeking more than a “less than” version an existing product. I don’t think there is any doubt that the moderation trend poses a threat to big alcohol brands.
But, out of a cultural shift of this magnitude, there are an enormous number of opportunities to create new exciting products and build new brands that meet a changing consumer need. While there will be a raft of new independent brands, I suspect the big brewers and alcohol conglomerates will be just fine, whether they are incubating their own brands or acquiring others.
Inside Drinks: Lastly, where do you see the low and no-alcohol markets in the next five to ten years?
Tom Evans, Adnams’ Low and No Alcohol ambassador
The market will continue to grow alongside the alcohol market. People will recognise the need or better products and they will become widely available. Just like we have seen the boom of coffee shops over the past ten years I think the same will happen with low and no drinks. With an attitude shift in society in understanding what alcohol is and how we are exposed to it more often than we think on a daily basis, people will, for example, start considering a 0.5% beer with lunch.
I think to see a fice-year forecast we just need to look over the English Channel to see how other European countries have embraced the revolution and low/no drinks feature heavily. Sporting companies and teams are big supporters of the movement and see the health benefits behind the drinks. It is difficult to predict the future but there is change out there and I think here at Adnams we are on the right path to stay strong in the market.
We currently live in a world where “not drinking” is a conscious decision: you consciously choose the occasions that you don’t drink, for example if you are in a pub you deliberately have to choose not to have a drink. And the options when you do haven’t been great. I’ve long had a belief that, for many consumers, this will completely flip, such that “drinking” will become a conscious decision: so for most of the time we will drink alcohol-free and then we will consciously select the moments and occasions that we do drink. This would be a huge cultural shift, but I become ever more convinced that it will happen in a shorter and shorter period of time.
Drinking habits are changing, inspired by an increasing desire from consumers to be more health conscious. As a result, the alcohol free sector continues to grow across the UK, with an increase in demand for alcohol free drinks aimed at adults who want alternatives to sugary fruit juices, stand-alone tonics and sparkling water.
Consumers want choice, they want a premium feel and they want to feel they’re not missing out on any social occasions.
Drinking rates are at their lowest in 18 years. According to the Office for National Statistics, around one in five adults in the UK is now teetotal — about eight per cent more than ten years ago. Indicating that this isn’t a trend that is set to die out any time soon as the younger generations grow up and instil this belief in moderate drinking to those to follow. As long as brands like Eisberg can continue to provide premium, interesting and most importantly, tasty, low and no alternatives then it’s a category that can only grow.
Jeremy Hill, CEO of Proof Drinks
Whilst I don’t believe that the current shifts will see the demise of the bar scene as we know it, I do believe that every on-premise business will need to meaningfully accommodate for mindful drinkers, just as restaurants have had to adapt for mindful eating.
Thus far, the majority of new alcohol-free spirits have been botanical, gin alternatives. Whilst these are delicious in their own right, consumers now want more from the market.
We’ve just partnered with an incredible new alcohol-free brand as their UK distributors: Lyre’s Non-Alcoholic Spirits. It’s a truly revolutionary concept. Lyre’s didn’t want to create confusing, original botanical flavours. Instead, each drink is designed to be an exact replica of its alcoholic original. Remarkably, the range already consists of an astonishing 13 different spirits and liqueurs, with more to follow. For otherwise downgraded consumers, bartenders can now conjure up an espresso martini, amaretto sour, negroni without having to compromise on taste or cocktail flare.
I think the future is the best possible quality alcoholic alternatives, staying as faithful as they can be to their alcoholic counterparts. Soon, I’m envisioning no- and low- cocktails will be on the same menu as the usual alcoholic cocktails, as they will be revered in the same manner.