Consumers prefer no rather than low-alcohol

10 May 2021

Beverage market analysis firm IWSR expects the no- and low-alcohol category to grow 31% by 2024, according to a new report that reviewed 10 key markets representing 75% of the global consumption of these beverages. The anaylzed markets were Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, UK and U.S.

Within this emerging beverage segment, no-alcohol is taking the lead and outpacing the growth of the low-alcohol segment. Between 2019 and 2020, the no-alcohol category increased 4.5% whereas the low-alcohol segment declined 5.5% during the same time period. Within the markets analyzed, zero-alcohol beverages accounted for 66% of the volume.

Consumers prefer no rather than low-alcohol

While zero alcohol was more popular overall, the U.S. proved to be an exception to this trend where consumers prefer low-ABV beverages. Particularly for wine and RTD beverages in the U.S., low-alcohol wine represented 86.6% of the market share while low-alcohol RTD beverages held a 70% share.

However, In the UK, no-alcohol spirits far outweigh their low-alcohol counterparts, but in Australia and Germany, the popularity of the two types of reduced alcohol beverages are split down the middle.

In markets outside of the U.S, the fact that consumers prefer no-alcohol in their beverages does not mean that they are not imbibing. In fact, research from ISWR in February found that 58% of consumers are enjoying both full-strength alcoholic beverages alongside no- and low-alcoholic choices on the same occasion. Only 14% of consumers do not drink any alcohol.

Consumers are increasingly interested in curbing their alcohol consumption for health and wellness reasons, but few are willing to forego alcohol completely. Instead, they are searching for alternatives to moderate their intake. IWSR posited that this trend toward moderation for wellness has been a headwind for the low-alcohol beverage segment outside the U.S. since consumers are confused about ABV levels. Due to a lack of education and outreach, the analysis firm said that consumers remain uncertain how much low-alcohol is too much to consume before operating motor vehicles. With a non-alcoholic choice, these concerns are no longer a factor.

Despite consumers favoring non-alcoholic options, large distillers and breweries are focused on building both low- and no-alcohol alternatives. Diageo recently acquired a minority stake in Ritual Zero Proof, but it also manufacturers a lower-alcohol version of its Smirnoff vodka with 30% ABV rather than the 40% ABV bottled in the original Smirnoff.

Breweries have been particularly keen to jump on the bandwagon as beer sales have continued to slip over the past several years. AB InBev’s announced that it is working toward converting 20% of its global beer volume sales to no- and low-alcohol offerings by 2025. Guinness has introduced several non-alcoholic versions of its well-known brews and Heineken has its own zero-alcohol lager.

Despite the growing popularity of this segment, it remains small in comparison to the overall alcohol category. But, IWSR pointed to RTDs as a potential bright opportunity for manufacturers to continue to push the growth of low- and no-alcohol options due to the explosive growth of these beverages and the fact that they attract millennials, 66% of which are looking to reduce their alcohol consumption, according to Nielsen.

Related news

PepsiCo doubles down on nonalcoholic cocktail mixers with Unmuddled

PepsiCo doubles down on nonalcoholic cocktail mixers with Unmuddled

8 Jul 2021

Legacy soda manufacturer PepsiCo is moving deeper into the non-alcoholic cocktail space with the announcement that it will debut a line of premium mixers called Unmuddled. The product line will be available beginning in September at Fresh Thyme and on ...

Read more 
Carbios technology creates first enzymatically recycled bottles

Carbios technology creates first enzymatically recycled bottles

6 Jul 2021

French biochemistry firm Carbios announced that, in partnership with a consortium of CPG manufacturers, it has produced the world’s first food-grade PET plastic bottles made entirely from enzymatically recycled plastic .

Read more 
Soonish debuts natural beer with gluten-free baking ingredients

Soonish debuts natural beer with gluten-free baking ingredients

29 Jun 2021

Los Angeles micro brewer Soonish now has a beer that is aiming to take the gluten-free beer space and transform it into the “natural beer” category. Soonish-Natural Beer is made using banana, millet, sorghum, and honey, but rather than resulting in a f...

Read more 
Dogfish Head releases oat-milk hazy IPA beer

Dogfish Head releases oat-milk hazy IPA beer

1 Jun 2021

It’s only been a few years that oat milk has been on grocery store shelves, but the plant-based milk alternative has made waves with its latest inroads being in the beer sector. In partnership with oat milk maker Elmhurst 1925, beer brand Dogfish Head ...

Read more 
Startup Bevry takes first mover advantage in Indian oat milk category

Startup Bevry takes first mover advantage in Indian oat milk category

5 May 2021

Indian startup Bevry has developed its own oat milk formulation, which it is manufacturing and selling exclusively in India with the goal of becoming the “Oatly of India.” According to the company, it is the first brand to manufacture and sell an oat-b...

Read more 
Sugar tax in South Africa results in ‘positive changes’

Sugar tax in South Africa results in ‘positive changes’

23 Apr 2021

A study published in The Lancet found that following the 2018 implementation of a 10% tax on sugar-sweetened beverages in South Africa, the overall consumption of sugar from these beverages fell 35% from 16.25 grams per person daily to 10.63 grams per ...

Read more 
Danone Manifesto Ventures makes first UK-based investment

Danone Manifesto Ventures makes first UK-based investment

8 Apr 2021

Danone’s VC arm, Danone Manifesto Ventures (DMV) made its first investment in a UK-based business with its commitment to a £2.5m funding round for the healthy drinks brand Moju. Moju said the French Dairy giant’s minority investment in the company will...

Read more 
Topo Chico finally debuts its hard seltzer

Topo Chico finally debuts its hard seltzer

1 Apr 2021

Molson Coors Beverage Company, which is exclusively manufacturing Topo Chico Hard Seltzer through a brand authorization agreement with Coca-Cola, finally released the concept onto shelves on March 29 after announcing the development of the brand in Jul...

Read more 
Chobani enters into pilot program with PepsiCo

Chobani enters into pilot program with PepsiCo

30 Mar 2021

Greek yogurt maker Chobani recently entered into a distribution partnership with PepsiCo to sell its new yogurt drinks at convenience stores, colleges and universities in the northeastern part of the U.S. In the original report on this news, Bloomberg ...

Read more 
Danone revamps itself, ousting CEO and adding to its portfolio

Danone revamps itself, ousting CEO and adding to its portfolio

24 Mar 2021

As Danone continues to face pressure both from industry competition as well as activist investors, the company has decided to separate its chairman and CEO roles, which are currently held by Emmanuel Faber. Additionally, Danone is searching for a new C...

Read more