The no/low alcohol revolution

Whether it’s a symptom of living through a year in which the importance of personal health and wellbeing was thoroughly hammered home, or a case of the younger generations setting the trends, the conclusion is the same: no and low alcohol drinks are selling.

The popularity of zero-alcohol drinks is clear for brands of all shapes and sizes. Brewing giant Carlsberg noted that its no and low alcohol segment grew by 11% in 2020, making it one of the most successful areas of the business. Meanwhile, the fine food sector is seeing an eruption of new beverages marketed as the alcohol-free options.

In the global drinks sector, no and low alcohol drinks account for just 3% of the market, but IWSR Drinks Market Analysis predicts that consumption will increase by 31% by 2024. The trend is sweeping through key global markets, including the UK, where a record 6.5 million people took part in Dry January 2021. Data and analytics company GlobalData even dubbed the 2020s the ‘decade of no and low spirits’.

The health factor

Why the sudden interest in alcohol moderation? “The growing popularity of no/low spirits is intertwined with consumers becoming more mindful of the health benefits of moving away from traditional alcoholic drinks,” says Andrew Stacey, co-founder of zero-alcohol spirit Herbarium Drinks. After a year like 2020, which took a toll on the mental and physical health of many, it’s no surprise that these concerns are at the forefront of consumers’ minds.

Mark Livings, who founded alcohol-free spirit brand Lyre’s said the company’s own research shows that a good proportion of its customers are still drinkers – they’re just keen to take a balanced approach. “The vast majority of the people coming into the category are not abstainers, but rather moderators,” he tells Speciality Food, “people looking to rebalance their lives around health, wellness or mindfulness.”

It’s a popular proposition. Despite Lockdown 3.0 cutting off the on-trade market in January, Lyre’s sales volumes across retail channels exploded during Dry January, growing 1,300% in the UK.

As alcohol-free beverages shift from a little known category to one that millions are happy to explore – a process Mark describes as moving from ‘hello’ to FOMO – higher and higher quality non-alcoholic drinks are coming to the market. “This has driven the ever-increasing choice and quality in the low/no spirit options available, so a low/no drink is no longer viewed as second best; it’s becoming a socially accepted first choice,” Andrew says.

And this trend isn’t restricted to Generation Z, although with a fifth of that cohort choosing to abstain from alcohol, they’re often referred to as the ‘sober generation’. Mark Wong, founder of Impossibrew Co and a member of Gen Z himself, explains: “For me and many others, health is the number one reason for moderation. Having a few drinks with friends or going out is great fun, but painstaking hangovers, headaches and feeling bloated the next day just isn’t worth it.”

What do consumers want?

So why choose a non-alcoholic beverage imitating an alcoholic one when there are so many alternative drinks on the market? “Drinking alcohol is a social ritual that is deeply woven into our culture,” Impossibrew Co’s Mark explains. “For those who are moderating or are teetotal, suddenly breaking away from a thousand-year-old tradition without any alternatives or ‘social prop’ makes it very difficult. No/low alcoholic drinks serve as a much needed replacement that reminds us of the familiar, without any negative health implications that come with alcohol,” he says.

Such a solution to this conundrum has only been achieved after many years of experimentation by drink makers. “As the number of no/low alcohol drinks increases, manufacturers have had to be more innovative and ensure that their drink offers something new and distinctive. Today’s no/low drinks are seen as ‘adult’ drinks and a credible alternative to alcohol, rather than a soft drink,” Andrew says. “There’s now a greater variety of tastes and options available, so no matter what someone’s preference, they’re sure to be able to find a low/no drink to suit their taste and also importantly, the occasion.”

Indeed, for a category that only a few years ago was restricted to a handful of brands of low alcohol beer, it is now buzzing with innovative alternatives to beer, wine, spirits and liqueurs. “Consumers are increasingly discerning about all aspects of their low/no drinks choices – they have expectations as to the use of natural ingredients, ethical production and sustainability, as well as health benefits,” Andrew explains. “They are looking for a unique drink experience that doesn’t feel like a compromise and can even be a talking point. Taste and flavour always has to be the priority though.”

Alternatives to alcohol

While it’s true that many consumers are keen to move frictionlessly between alcoholic and non-alcoholic versions of their favourite tipples – an alcohol-free botanical spirit for the gin and tonic fans, a low-alcohol beer for the craft beer lovers – there is another segment of the population that is keen to explore beverages that push the crucial health element even further.

Laurie Freeman founded his drinks business Zingi Bear after falling for the switchel, an all-natural apple cider vinegar and ginger beverage once drunk by farmers as a refreshing elixir to stay hydrated in the field. Also inspired by the digestive health benefits of apple cider vinegar is Mollie Obileye, who created Jitterbug Apple Cider Vinegar seltzers after falling ill and looking for drinks to support a healthier lifestyle. The ever-trendy drink kombucha is also said to aid in digestion, wellness and immunity, and brands like Good Earth are jumping on the fast-growing £16m market to offer customers a healthier alternative to alcohol.

But what elevates a brand from an ordinary soft drink to a stand-in for a cocktail? Quality of ingredients, Laurie says. “Our food scene is one of the best in the world, likewise with our craft beer – people are happy to pay a little bit extra for better; however soft drinks have been left in the dust. Why not make a soft drink that stands up to the quality of food on our plates? I guess that’s why we’ve been a hit with some of the UK’s top chefs and restaurants. We’ve even been on a Michelin Star tasting menu replacing a wine – how mad is that?”

Pev Manners, managing director of drinks brand Belvoir Farm agrees that telling customers the stories behind your ingredients is key to catering to discerning health-conscious consumers. “At Belvoir we are very proud of our carefully selected, simple ingredients with no artificial additives that allow the natural flavours to shine through, while being completely transparent with ingredients and labelling. Our hero line is Elderflower, but sparkling Ginger Beer, Lime & Soda, Raspberry Lemonade and new sparkling Ginger & Lime and sparkling Strawberry & Lime are also very popular.”

Belvoir’s drinks are increasingly seen as mocktail material. “There’s a real movement for ‘virgin’ drinks and mocktails that still deliver great taste, and this has gathered pace during lockdown, with the nation’s drinking habits and alcohol consumption put under the spotlight,” Pev says. Belvoir’s new launches reflect this no and low alcohol trend, he adds, “with naturally tasty drinks that can be enjoyed in a favourite tipple but, more importantly, as a delicious alcohol substitute. During lockdown, all 11 of our cordial flavours enjoyed good growth as consumers looked to hit their daily hydration targets without feeling like it was a chore, and we’re now the UK’s fastest-growing premium cordial brand”.

For Laurie, appealing to consumers’ tastes today comes down to one factor. “The world is full of different people wanting different things, however I feel more than ever that collectively we are all looking for better.” Better ingredients, better for the environment, better tasting and better for you. By meeting this set of criteria, the fine food sector can ensure that every category of drinker is catered for.

Stocking the right mix

For retailers, the current low and no alcohol market appears as a patchwork of possibility – but also a minefield of potential misses. What’s a shop to stock to provide
for all types of drinkers?

Andrew Stacey, co-founder of Herbarium Drinks

“It’s important that retailers understand the subtle differences between their no/low alcohol products. Drinks can still have 0.5% ABV to classify as non-alcoholic, whereas alcohol-free is 0% ABV. For some customers this may not matter too much, but for others having a truly alcohol-free 0% drink is essential.

“It goes without saying that every customer will have different priorities and taste preferences, but with some specific product knowledge the fine food retailer can ensure that their customer has the best opportunity of getting the most enjoyment from their no/low alcohol drink experience.”

Mark Livings, founder of Lyre’s

“Retailers are over-indexing botanicals – gin, and gin-style products – and their shelves are not representative of how people are drinking the category. Gin consumption is 30% of the traditional spirits category in the UK. For the most part, there’s 70% of the market left unaddressed by retailers because they’re not stocking the bitters, liqueurs, vermouths or brown spirits to the ratios that people are looking for them.

“And the second big problem is if it’s all gin, then there’s none of that premium experience. You are pretty limited in terms of how you elevate that experience with either in-home mixology or how the trade can do it once it starts to reopen. We need a broad palette of colours to paint with.”