While many Brits stocked up on the hard stuff in March during the lockdown, sales of ‘nolo’ (no- and low-alcohol) beverages also rose by 32.5% (Nielsen). As consumers’ thirst for zero and low-alcoholic beverages continues to grow, beverage manufacturers are creating innovative, new products that satisfy the market while appealing to the health, wellness and sustainability trends.
Here, FoodBev takes a look at the top three no- and low-alcohol trends set to emerge in 2020.
The non-alcoholic drinks industry is going through a time of unprecedented growth and innovation, gaining attention and momentum from beverage manufacturers to produce new, premium nolo alternatives without compromising authenticity, quality and exclusivity.
Brands already tapping into this new trend include Brewdog with its 0.5% ABV range and Bacardi’s introduction of two non-alcoholic martini aperitivos. “The category is in its infancy and its scale is unprecedented when you think about where we could be in five to ten years if people continue to moderate their lifestyles,” says Alex Carlton, founder of zero-proof spirits brand Stryyk.
Innovation with a focus on quality, enhanced experience and distinctive ingredients is key to creating original and engaging beverages that excite consumers and enhance sales. Recent innovations include Real’s premium kombucha, which is fermented as a sparkling wine from exquisite loose-leaf teas; O. Vine’s wine grape infused water; and Highball’s alcohol-free cocktails. However, despite the increase in nolo products, there is still plenty of room for growth in this category.
A study undertaken by the International Wines and Spirits Record (IWSR) found the UK’s no- and low-alcohol brands represented only 1.3% of the country’s total beverage alcohol market. In the US that number is even smaller, at 0.5%.
However, as investors, wellness enthusiasts, and sober curious millennials demand more exciting nolo drinks, these figures are set to rise in the coming years. Fitch Solutions predicts that global non-alcoholic drink spending will expand by 4% year-over-year in 2019, up from 3.9% year-over-year in 2018, and that the category will gain steam over its medium-term forecast to 2023.
Consumers want authenticity and are moving away from ‘glorified’ soft drinks that provide little justification for a premium price tag. It is therefore important that brands find innovative ingredients and bespoke processes to replicate the complex tastes found in spirits, wine and beer.
Ingredients being utilised to create convincing tastes include allspice, grapefruit, green cardamom, ginger, rosemary and oak. Botanicals and CBD infused beverages are also trending due to their ability to create bespoke and distinct flavour profiles. While botanicals offer floral flavours such as geranium and rose, CBD presents zesty lemon and juicy mango aromas, creating a natural bitterness commonly associated with alcoholic beverages. These ingredients and flavourings will continue to fuel nolo drink innovations.
One driving force behind the consumption of nolo drinks is younger consumers’ awareness of the health risks associated with excessive alcohol intake. According to the Society of Independent Brewers’ (SIBA) British Craft Beer Report, the number of 18-24-year olds who say they don’t drink has increased by 6% in the last 12 months, to 23%. Consumers are more conscious of their physical and mental health than ever before, and this has led to a fall in alcohol consumption, especially within the millennial demographic
No- and low-alcoholic beer is hitting the mainstream and is set to become a serious player in the beverage industry in 2020 and beyond. Sales volumes of low- and non-alcoholic beer have risen by approximately 18% in the past five years in Western Europe, according to Euromonitor, and are forecast to climb another 12% by the end of 2022. Growth has been even stronger in the UK.
The world’s largest brewers and drinks manufacturers have seized the opportunity for nolo beer, with brands such as Budweiser and Heineken launching extensive ranges of low- and non-alcoholic beers. Smaller-scale and craft brewers are also finding space to explore this new trend: London-based, alcohol-free craft brewer Big Drop released a range of beers that includes lager, pale ale and IPA.
Previously, alcohol-free beers were labelled as tasteless and bland, however, suppliers have upped their game with creative and flexible products that offer a respectable and refreshing alternative to regular brews. Now, these brews are popping up in bars and restaurants in the form of draft beer, rather than the traditional glass bottle. According to John Hardingham, managing director at St Peter’s Brewery, alcohol-free draught is the way forward for the hospitality industry: “We all know bar taps are at a premium in pubs, but given the rapid growth of this sector, I suspect it will not be long before alcohol-free on draught become more common, especially as international brands continue to enter the category”.
Multinational brewery and pub chain Brewdog are opening the ‘world’s first alcohol-free beer bar’ in central London, and it’s likely that we may see other no- and low-alcohol experiences popping up across the UK and further afield. These bars provide one way to challenge the myth that alcohol-free beer has somehow become tasteless, while creating an inclusive space for health-conscious consumers to socialise and relax.
Packaging and sustainability
With young millennials putting significantly higher priority on sustainability, it is important that the no-and low-alcohol market designs packaging that is sustainable.
Several leading bottled water and soft drinks manufacturers hope to eliminate packaging waste in their value chain by 2030 and aim to achieve at least 70% recycled material by 2025. Beverage brands such as PepsiCo announced its plans to use 25% recycled content in its plastic packaging by 2025, while Coca-Cola Amatil produced carbonated soft drinks bottles made from 100% recycled plastic.
A noticeable trend occurring among no-and low-alcohol offerings, is the rise of the canned format. According to a market analysis report carried out by Grand View Research, the global beverage cans market size was estimated at $39.93 billion in 2015, growing at a CAGR of 4.6% from 2016-2024.
A number of brands have transitioned from traditional glass bottles to convenient, creatively labelled cans, aligning with consumers’ busy lifestyles and demand for healthier, sustainable alternatives. Brands such as Vita Coco Sparkling Coconut Water, Dram Sparkling Water and Recess’ infused sparkling water are the latest to tap into this trend.
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Written by Lily Benham
© FoodBev Media Ltd 2020
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