No-alcohol is £800m opportunity for on-trade

The UK on-trade loses £800 million (US$985m) per year due to a lack of non-alcoholic options as a trade up from water, according to the founder of Club Soda.

Laura Willoughby MBE, co-founder of London’s alcohol-free off-licence Club Soda, made the comment during Distill Ventures’ second Non-Alc Summit on 24 January.

She was joined by Ellie Webb, founder of non-alcoholic ‘spirit’ brand Caleño, and Nick Bodkins, founder of US-based alcohol-free retailer Boisson. The virtual panel discussion was hosted by Justin Lew, marketing and strategy lead for Distill Ventures in North America.

The digital series of seminars explored the topic, ‘To January and Beyond: Seasonality and the Evolution of the Non-Alc Drinker’.

Webb noted that consumers struggle to find low-and-no options on the market despite considerable interest, demonstrated by the high online search volume for low-alcohol cocktails.

Bodkins said although consumers who take part in Dry January are more likely to continue for the rest of the year, he now sees non-alcoholic sales peaking at the same time as sales of alcohol.

This statement is backed by Distill Ventures’ data, which showed that non-alcoholic products grew steadily from 2020 through to October 2022, with noticeable spikes in sales around the festive period and sales declining through January.

Dry January persists 

Webb said consumers “have less appetite to go dry for an entire month” and that ‘Damp January’ is much more likely, whereby a consumer reduces alcoholic intake, perhaps during weekdays.

However, Dry January will continue to exist as it follows the festive period of high spending and alcoholic consumption, Webb concluded.

The panellists also agreed that while Gen Z and Millennials drive the market, it is not a traditional path to growth, with Bodkins noting it starts by drinkers asking for non-alcoholic options in the on-trade.

Data from Distill Ventures found that 19% of 25- to 34-year-olds in the UK have consumed a non-alcoholic ‘spirit’ in the past four months.

Data also showed 82% of no-and-low drinkers also consumed alcohol and are alternating between the two in a bid to moderate.

Willoughby believes that more alcohol-free versions of popular cocktails on menus would drive growth of the category.

She also noted that UK supermarkets have reduced their choice of low-and-no products, despite initially having wider availability.

The speakers also agreed that an ABV calculator would be beneficial for the on-trade to have on cocktail menus.

The value of the no- and low-alcohol category in 2022 surpassed US$11 billion in 10 key markets, according to IWSR Drinks Market Analysis.

Non-alcoholic ‘spirits’ volume climbed by 38% in the UK last year.