Low- and no-alcohol category ‘poorly served’

8th February, 2019 by Nicola Carruthers

The low- and no-alcohol ‘spirits’ category is expected to grow 81.1% between 2018 and 2022 in the UK, however the booze-free sector is “poorly served with few clear category leaders”, according to the IWSR.

The low- and no-alcohol is forecast to “grow significantly”

In the IWSR Global Opportunities in Low- and No-Alcohol report, the Dry January movement is described as “the start of a wider health and wellness trend that is gaining traction across the world, providing new opportunities for the global beverage alcohol industry”.

The study assessed market sizing by volume, key players in the industry, the on-trade, product innovation and consumer trends.

“The Dry January movement isn’t new, but one of the reasons we’ve heard so much more about it this year is the broader trend that points to consumers’ increased interest in physical and mental health,” said Mark Meek, IWSR CEO.

“And that’s creating an interesting shift in consumer preference for low- and no-alcohol beverages, outside of soft drinks.

“For leading producers of beverage alcohol, this obviously presents considerable opportunity to develop new products, claim their share of the category and ultimately grow revenue.”

While the category is predicted to “grow significantly”, the IWSR claims the current marketplace “is still small in most parts of the world”.

In the UK, low- and no-alcohol brands represent 1.3% of the country’s total alcohol market, while in the US the category represents only 0.5%.

In the on-trade, most venues surveyed offered non-alcoholic beer, but zero-alcohol wine “was notably absent”.

The off-trade offers “significantly more” low- and no-alcohol products than bars and restaurants.

Looking at the US market, 52% of consumers surveyed said they were trying to reduce their alcohol intake, while more than 70% said they had not considered drinking low- or no-alcohol offerings.

Ready-to-drink (RTD) products are expected to lead the low- and no-alcohol sector in the US, forecast to increase by 38% CAGR between 2018 to 2022. Wine will follow at 17.7%, then spirits at 7.1%, with beer predicted to grow by 5.6%.

In the UK, spirits are expected to lead the growth of the low- and no-booze sector (81.1%), followed by RTDs (44.3%), cider (13%), wine (6.6%) and beer (4.9%).

According to the IWSR, 65% of the UK’s heaviest drinkers (25- to 34-year-olds) are trying, or have tried, to cut back on their alcohol intake.

The IWSR also noted that Spain is one of Europe’s largest and most well established markets for low- and no-alcohol, led by beer and mixed drinks. The country’s low- and no-alcohol sector is expected to grow by 36.8% CAGR between 2018 and 2022, with wine growing by 19.8% and beer by 6.7%.

In Australia, non-alcoholic beer represents the largest share of the low- and no-alcohol market in Australia but is expected to decline by 0.1% (CAGR 2018-2022). The low- and no-alcohol ‘spirits’ category is predicted to grow 28.6%.

The German market for low- and no-booze is showing growth with 60% of drinkers stating they have, or would consider consuming products in the category.

The sector is forecast to be led by spirits, which are expected to grow by 14.4% in Germany by 2022. This is followed by RTDs (13.3%), cider (11.4%), wine (4%) and beer (1.6%).

A number of leading drinks producers have launched low-alcohol versions of their existing brands, while others have joined the alcohol-free ‘spirits’ category.

To explore the issue of education and transparency in alcohol-free ‘spirits’, see SB’s recent in-depth feature on the topic. 

As the low- and no-alcohol trend continues its unstoppable rise, we rounded up the latest zero-alcohol ‘spirits’ offering an alternative to booze.

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