World Spirits Report 2022: low & no
The low-and-no sector is developing at a rapid pace, as drinkers seek to moderate their alcohol intake.
The abundance of choice in the category has extended beyond ‘gin’ replacements, and diversified to include Tequila alternatives, vermouth substitutes and even canned alcohol-free cocktails.
A report by IWSR Drinks Market Analysis at the start of 2022 forecast that no- and low-alcohol volume would rise at a compound annual growth rate (CAGR) of more than 8% between 2021 and 2025, outpacing alcohol volume growth by more than 0.7% CAGR over the four-year period. Non-alcoholic ‘spirits’ and ready-to-drink products are both expected to post more than a 14% CAGR.
Due to its little or no alcohol content, products in the segment can capture consumers for new occasions, whether it’s at sporting events, spas or hair salons.
“Success for the category globally lies in greater distribution and increased exposure, and this has very much been at the forefront for many non-alcoholic brands this year,” says Mark Livings, CEO of alcohol-free producer Lyre’s. “Low-and-no ‘spirits’ are now showing up across a range of channels, such as retail, in the on-trade, across food service, sporting and music venues, as well as travel stations.”
Non-conventional channels represent a huge opportunity for Lyre’s, with the company last year entering the Middle East, and securing new UK partnerships, including the UK’s Luna Cinema Drive In, and Bluewater Shopping Centre. Livings has also seen “considerable interest” in low-and-no options in experiential bars, such as Hijingo Bingo, Boom Battle Bars, and Ballie Ballerson.
Livings estimates that more than 95% of Lyre’s buyers “continue to enjoy alcohol-containing products”, he says. “It’s about delivering choice, and in doing so, this shift will deliver to the non-alcoholic category growth that we believe will exceed the traditional categories for the next 20 to 30 years.”
Like Livings, Paul Mathew, founder of UK based alcohol-free brand Everleaf, believes the category must work on attracting a wider audience. “We have to stop talking about abstinence and being for non-drinkers (something we avoid at all costs),” he says.
“Those consumers are a minority; they’re well aware of the category, and their shelves are full of amazing options. For the category to grow we have to appeal more widely. Fifty five per cent of UK adults are trying to cut down on alcohol (according to KAM Media, 2022), but only one in three knows the non-alcoholic ‘spirits’ category exists.”
Established brands such as Tanqueray, Dead Man’s Fingers, Whitley Neill and De Kuyper have also moved into the category with alcohol-free options, and ultimately bringing more attention to low-and-no.
But, Mathew notes: “The explosion in the number of brands joining the category is an opportunity to raise consumer awareness and drive things forward, but also a challenge, in that the category isn’t growing fast enough for everyone to succeed.”
Brands to watch in 2023
Danish producer Ish Spirits sold a 26% stake in its business to Nordic drinks group Anora Group during the summer. The move will enable the alcohol-free producer to expand globally, and ramp up its sales and marketing. The brand’s portfolio includes London Botanical Spirit, Caribbean Spiced Spirit, and Mexican Agave Spirit, and the investment will help the distiller create new ‘ambitious’ products.
Founded by conservation biologist and bartender Paul Mathew in 2019, Everleaf recently made its debut in the US, and launched a summer campaign to reinforce its positioning as “the alcohol-free Spritz of choice”. October 2022 was the company’s “biggest month ever, selling almost as much as we did in the whole of our first year”, says Mathew. We expect more to come next year.
With a portfolio of 17 alcohol-free ‘spirits’, Lyre’s has been a leader in diversifying the category. The brand has been working hard to expand its presence in bars and restaurants in the UK, boasting more than 3,500 distribution points, including The Ivy, Drake & Morgan, and Marston’s. Lyre’s will kick off 2023 as the non-alcoholic ‘spirit’ partner of Dry January in the UK – a huge opening gig for the brand.