The Surge of No and Low Alcohol Beverages
According to an IWSR report, sales of alcohol free and low alcoholic drinks in key global markets reached $10 million US dollars in 2021, up from $7.8 billion in 2018.
Once a rarity in the market, sales of no and low alcohol spirits, beer, cider, wine, and ready-to-drink (RTD) beverages increased by 6% in 2021.
They now command a 3.5% volume share of the industry. And this is only the beginning for no and low alcohol beverages in key markets such as the UK, the US, Australia, France, Germany, Canada, Brazil, Japan, South Africa, and Spain.
In fact, it’s predicted that no and low alcohol drinks will grow by 8% CAGR between 2021-2025. It’s a slightly different picture for regular alcohol, which is predicted to grow 0.7% CAGR during that same period.
This blog article looks at the alcohol-free and low alcohol drinks trend which is shaking up the industry. What does the growth of this sector mean for regular alcohol? And is this growth, a fad, trend, or the future?
What’s Causing the Growth of Alcohol-Free and Low Alcohol Beverages?
While January has become a popular month for reducing alcohol intake or cutting it out completely, interest in alcohol-free and low alcohol beverages has increasingly become a year-round trend among consumers throughout the world.
One of the key reasons for the growth is due to consumers becoming more health conscious. As a result, they are seeking out no and low alcohol beverages which meet their health and wellness desires and offer lower ABV, lower sugar, and lower calories.
The COVID-19 pandemic was also pivotal for the alcohol-free and low alcoholic beverages movement, with lockdowns significantly affecting alcohol drinking behaviour. Many people cut down or just stopped altogether during the pandemic.
It’s also important to note that many no and low alcohol beverage options now taste as good as their alcohol counterparts. So, consumers can now drink them without having to compromise on taste and quality (and ultimately avoid the dreaded hangover).
The Role of Younger Consumers
There is also a sense that the demand for alcohol-free and low alcohol beverages is being driven by younger consumers – and there’s data to back this.
According to GlobalData, 28 per cent of global consumers said they were buying less beer during the pandemic, with 27 per cent of consumers citing that they were concerned about their physical health. What’s interesting is that these trends correlate with age. Therefore, out of those surveyed, millennials (born 1981 – 1996) were the most concerned about their health and were most likely to be buying less beer than they were before the pandemic.
Gen Z (1990s – early 2000) are another generation concerned about their health, with many opting to reduce their alcohol intake as a conscious lifestyle choice. And what better way to do this then by substituting alcohol with low or alcohol-free alternatives.
Drink Brands are Responding
With demand for these types of beverages at an all time high, supermarkets now have dedicated shelves for no and low alcohol drinks, and some pubs and bars are starting to offer a wider selection.
Some of the largest brands have introduced no and low alcohol beverage options. For example, Beck’s released Beck’s Blue, a light, crisp, fruity, and alcohol-free alternative to beer. In addition to containing no alcohol, it’s also fat-free and just 53 calories per 275ml bottle.
It’s a similar picture for beer brand Heineken. As of 2020, Heineken has over 130 non-alcoholic line extensions. And this will continue to increase, with the manufacturer promising investment in innovations across its no and low alcohol portfolio.
Spirits giant Diageo has also taken Gordon’s into the low and no alcohol space with a 0% version of their gin brand. According to the beverage producer, the Gordon’s alcohol-free gin contains the same distilled botanicals as Gordon’s Dry Gin. Despite containing no alcohol, the distillation process is still complex with each botanical being individually immersed in water, heated, and then distilled before being expertly blended.
And the beverage giant isn’t stopping at Gordon’s. In fact, Diageo recently announced its latest move in the alcohol-free spirits category, with the launch of Tanqueray 0.0%, another alcohol-free gin alternative.
The End of Regular Alcohol?
So, with alcohol-free and low alcohol beverages booming and not showing any signs of slowing down, does this spell the end of regular alcohol?
Not quite, as there’s still a long way to go before the no and low alcohol drinks catches up with or even overtakes regular alcohol.
And from an industry perspective, alcohol is very much still thriving (well some categories are anyway!) In the US, the distilled spirits category achieved strong growth in 2021. According to figures by the Distilled Spirits Council of the United States (DISCUS), supplier sales in the United States were up 12% in 2021 to a total of $35.8 billion.
Premixed cocktails were the fastest growing category in the US surging 42.3% to $1.6 billion compared with a year earlier. Tequila and mezcal was also in demand in 2021, trailing only premixed cocktails as the second-fastest growing spirits category.
It’s a slightly different story for beer and wine where overall sales have remained mostly flat and short of pre-COVID levels.
However, there is still no indication that any of these categories are on the edge of oblivion.
Low and No – The Future of Alcohol or Just a Fad?
So, the question remains; are low and no alcohol beverages just a fad, or are they the future of beverages?
The cultural trend towards improved mental and physical wellbeing doesn’t seem to be going anywhere. This is one of the biggest drivers of the no and low industry. So, while this trend is around, low and no alcohol beverages will likely continue to storm the beverage space.
Technical advances have also meant no and low alcohol taste as good as their full-strength counterparts. So, what’s not to like?
And it’s only going to get better for no and low alcohol beverages, with innovative ingredients and combinations expected to improve the category’s positioning and encourage even more drink brands to create their own alternatives.
So, whether it’s 0% Gin on Christmas day, a month-long detox in January or switching to no and low alcohol drinks completely, it seems the sector is on the up, with their popularity showing no signs of slowing down.
Pigging Systems for Beverages
Wondering what this blog has to do with HPS? HPS specialize in liquid product recovery (pigging systems) for companies that manufacture beverages.
Our proven solutions are used with an extensive range of alcoholic and non-alcoholic beverages.
This includes distilled spirits such as whisky, gin, rum and tequila and ingredients such as pulps, musts, and sugar syrups. Our pigging systems for beverages are also used with soft drinks, juices, plus much more.
From speeding up changeover times, reducing water and cleaning chemicals, to preventing contamination and saving extensive amounts of usable product each year, the benefits HPS systems deliver to beverage processing are extensive. That’s why pigging systems are in wide use in beverage process plants throughout the world.
And with alcohol-free and low alcoholic drinks surging, pigging will likely be an important part of their production process too for years to come.
Find Out More
As well as beverages, other key industries benefiting from HPS technology include food, confectionery, homecare, personal care, cosmetics, pet food, lubricants, paint, coatings and many more.
Our proven, high-performance solutions are providing companies that process liquids with tangible benefits, a high return on investment and quick payback.
To learn more about the benefits of pigging systems for process industries, then please contact HPS.