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Alcohol-free ‘spirits’ slow in UK as US booms

The growth of non-alcoholic ‘spirits’ in the UK has slowed in the past year, but the category is soaring in the US.

Lyre's US
Non-alcoholic ‘spirits’ brands like Lyre’s are focusing on the US

IWSR said the UK’s total no-and-low market is expected to have more than doubled in 2024, compared to the previous year. However, this is being driven by alcohol-free beer which is predicted to soar by 20% last year, with the segment representing more than 2% of the UK’s total alcohol sales.

IWSR attributed the alcohol-free beer segment’s growth to wider availability and duty changes that provided a one-off boost to volumes.

In comparison, non-alcoholic ‘spirits’ saw an estimated 7% growth in the past year, and alcohol-free wine increased by 8%.

IWSR previously noted that the alcohol-free ‘spirits’ category rose by 13% in the UK in 2023. At the time, the IWSR said the category would grow by approximately 4% in the UK between 2023 and 2027.

Volumes of the UK’s total no-alcohol market are expected to grow at a compound annual growth rate (CAGR) of 7% between 2024 and 2028.

In June 2024, IWSR found that the UK’s no-alcohol market grew by 17% in 2023 and estimated the sector to post a 4% volume CAGR increase (2023-2028).

In terms of demographic, IWSR found that UK no/low buyers are skewed towards younger legal drinking age (LDA) groups (aged over 18), with an even gender split, and are more likely than non-buyers of the category to be higher earners.

Availability of no-and-low remains a key challenge for driving growth of the category in the UK, particularly due to the dominance of beer alternatives on shelves, IWSR noted.

Zero-ABV ‘spirits’ boom in US

It’s a different picture in the US, where no-alcohol ‘spirits’ have emerged as the fastest-growing segment within the broader spirits category. The segment has a five-year CAGR exceeding 60% through 2024, IWSR found.

Spirits alternatives are outpacing growth of no-alcohol wines and beers in the States, according to IWSR.

“This growth in no-alcohol ‘spirits’ is driven by factors such as the sober-curious movement, lifestyle choices, and improved flavour innovations,” said Koryn Ternes, consulting manager – Americas, IWSR.

“Premium positioning and shifting social norms have propelled no-alcohol ‘spirits’ into mainstream drinking culture, offering sophisticated and stigma-free alternatives for a broader audience.”

January is the strongest month for non-alcoholic ‘spirits’ with volumes more than double the monthly average. Spring was also highlighted as another growth period due to outdoor gatherings and holidays such as Easter.

Midwest and Mid-Atlantic states, such as Pennsylvania, Ohio, Virginia, and New York, experience ‘heightened demand’ during January, with Consumer Demand Index (CDI) levels said to be 20% to 50% higher than their yearly averages.

The coastal states of California and New York collectively account for more than one-third of the segment’s total volume in 2023. CAGR volumes skyrocketed by 47% in California and by 44% in New York over the past five years.

The IWSR said: “With a focus on January and springtime events, and strategic investments in both coastal hubs and underserved states, the category is poised for continued expansion.”

The US has become a major focus for alcohol-free brands such as Lyre’s, according to its new CEO David Gimpelson.

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