Dry January: what’s in store for the no and low alcohol sector?

2021 has got off to a rocky start for millions of Brits participating in Dry January. Although a record number of people in the UK signed up to the month-long alcohol-free challenge – 6.5 million, up from 3.9 million last year, according to the charity Alcohol Change UK – a snap poll revealed that 2.7 million people had fallen off the wagon just five days into the new year.

Polls by KAM Media revealed that 30% of UK adults intended to take part in Dry January. By 1st January that figure had dropped, with 31% of respondents saying they changed their mind. And the most recent poll found that 24% of those who started had since consumed alcohol. “Given the new lockdown restrictions, it probably doesn’t come as a huge surprise,” the group said of the results.

But despite the unique challenges consumers are facing because of the pandemic, YouGov’s research found that there was no significant change in how many people had fallen broken with Dry January in the first week of 2021 compared with the first week of January 2020.

Plus, KAM Media said awareness around no and low alcohol brands and varieties was soaring, with three in four familiar with the drinks that are available.

Retail giants and major drinks brands have continued to up their investments in no and low alcohol into 2021, signalling their confidence in the trend. Pernod Ricard, which owns brands such as Jameson, Malibu and Beefeater, recently bought a majority stake in the alcohol-free spirit brand Ceder’s, while Gordon’s has launched its own alcohol-free alternative.

Sales of low and no alcohol drinks increased by 30% over 2020, according to data from Nielsen. What’s more, forecasts by IWSR Drinks Market Analysis predict that no and low alcohol beer will remain resilient through to 2024, while traditional beer and wine sectors will take “several years” to recover from the impact of Covid-19.

“No and low-alcohol beer accounts for over 80% of the total global no and low-alcohol beverage market and is expected to continue to lead the segment’s strong volume growth over the next few years,” explained Sophia Shaw-Brown, Senior Insights Manager at IWSR Drinks Market Analysis.

“The global no/low alcohol beer category is forecast to grow strongly, growing by 15% in 2021 and will continue on its growth path through to 2024,” she added. No-alcohol spirits, meanwhile, will grow at a slightly slower pace due to the pandemic’s closure of the hospitality sector, which is “seen as key to bringing the category closer to consumers”, the group said.

The IWSR credited the increasing popularity of no and low alcohol drinks to ever-growing trends around moderation and wellness, and Sophia added that no and low alcohol beverages have benefitted from the Covid-19 pandemic “as consumers increasingly are searching for sophisticated alternatives to traditional non-alcoholic options, such as soft drinks. The pandemic has also increased awareness around health and wellbeing, with research showing that a significant proportion of over-40s are turning to the no and low-alcohol category to reduce their alcohol intake and to try to be healthier,” she said.

Mintel corroborates this in its 2021 Global Food and Drink Trends report: “In the coming years, more brands will position themselves as mindful choices, for example, by facilitating reduction in alcohol consumption.”

Alistair Frost, the founder of Cornish non-alcoholic spirit brand Pentire told Speciality Food that he sees the no and low alcohol sector “going from strength to strength because of people being so open minded to trying things and so aware of the long-term impacts of small day-to-day changes and habits, good or bad”.

Paul Matthew, founder of Everleaf non-alcoholic aperitifs, agreed, telling Speciality Food that the business has seen a stunning 1,500% rise in its direct-to-consumer sales. “Even across all sales channels, we were +400% for the last three months of 2020 vs 2019, in spite of the on-trade being closed (where we were seeing the strongest growth prior to Covid),” he added.

The alcohol-free beer brand Lucky Saint had a similar experience over 2020. “Last year, despite Lucky Saint losing 70% of its volume when UK on-trade shut down during the first lockdown in March 2020, it has grown 300% year-on-year (2019-2020). It predicts a further 300% revenue increase for the year ahead (2020-2021),” said founder Luke Boase.

“The no/low category is accelerating at pace and is projected to be worth £450m by 2024. Within this, beer will be the biggest subcategory by 2021, worth £172m,” he added.

Pentire, which is marketed as a healthier alternative for those who want to keep up an active lifestyle, also saw its sales spike during lockdown last year, and in November, it launched a limited-edition product that quickly sold out. “We feel like [the pandemic] has really solidified the no and low sector for anyone that might have been sceptical of it. It’s been a great year for people to try and to bring non-alc into their lives and feel the benefits.

“There’s a lot of long term potential, and a lot of value-add for consumers that are really excited about this sector,” he added. With much of the alcohol sector still reeling from the impact of Covid-19 on hospitality, no and low options provide an opportunity for growth that ties in with the wider industry’s move towards health and wellness.

Image: Courtesy of Pentire, photographer: Pentire;Jack Beavan and Ben Pryor