Beverage trends: no- and low- outperform full-alcohol drinks

Once just a sliver of the global beverage alcohol market, no- and low-alcohol beer/cider, wine, spirits and ready-to-drink (RTD) products grew by more than +6% in volume in 10 key global focus markets in 2021 and now command a 3.5% volume share of the industry, according to a new study published by IWSR Drinks Market Analysis.

Among the 10 focus markets examined in the 2022 IWSR ‘No- and Low-Alcohol Strategic Study’ (Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the United Kingdom, and the United States), the market value of no-/low-alcohol in 2021 was just under US$10 billion, up from $7.8 billion in 2018.

The IWSR forecasts that no- and low-alcohol volume will grow by +8% compound annual growth rate (CAGR) between 2021 and 2025, compared to regular alcohol volume growth of +0.7% CAGR during that same period.

“While January has become a popular month for people to cut back or abstain from alcohol, interest in no- and low-alcohol drinks has increasingly become a year-round trend among consumers across the world,” said Emily Neill, COO of IWSR Drinks Market Analysis. “To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products, and many established mainstream brands have recently crossed over to develop no-/low-alcohol versions of their popular beer, wines and spirits.”

Other key statistics from the study

• Beer/cider is the largest no/low category (at 75% volume share), with no-alcohol beer projected to drive growth at more than +11% CAGR over the study’s 2021–2025 forecast period.
• No-alcohol RTDs and no-alcohol spirits are both expected to post about +14% CAGR volume growth.
• The wine category is the exception, as the taste of low-alcohol wine is perceived by many consumers to be superior to that of no-alcohol wine.
• Low-alcohol wine is expected to grow almost +20% CAGR 2021–2025 vs no-alcohol wine projected at +9% CAGR.
• By volume, Germany dominates no-/low-alcohol, and is more than three times that of the next-largest market, Spain, followed by the US, Japan and the UK. However, the UK and the US are two of the most dynamic ones, and are growing at a faster rate.

Who is the consumer?

According to the new IWSR research, 43% of adults across the focus markets who have purchased no- and low-alcohol beverages say they are substituting those products in place of full-strength alcohol for certain occasions, rather than abstaining from alcohol overall. The majority of no/low drinkers also enjoy standard strength alcohol too — only 17% of people report they are drinking no/low to avoid alcohol completely.

The country with the largest proportion of alcohol abstainers is the US, with 23% of no/low drinkers avoiding alcohol completely.

“The no-/low-alcohol market is still very much in its early growth stage in many categories and geographies, as the sector continues to define itself,” Neill added. “Brands that will ultimately dominate in the no/low space are those that are successful in navigating the barriers of taste, price, pack format, availability and overall consumer education.”

Image credit: ©stock.adobe.com/au/WavebreakmediaMicro