Taste, health and ESG commitments drive no- and low-alcohol drinks

Sales of no- and low-alcohol beer, cider, wine, spirits, and ready-to-drink (RTD) products grew by more than 6% in volume in 10 key markets in 2021, and now have a 3.5% volume share of the industry, according to a new study published by research group IWSR. The market value of no- and low-alcohol drinks in 2021 was just under $10bn (£8.2bn), up from $7.8bn (£6.4bn) in 2018. 

Volume sales in the UK grew 17%. UK-specific data, published by the FT, showed drinkers here bought $454m (£392m) of no- and low-alcohol drinks in 2021, up from $240m (£207m) in 2016.

“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 IWSR chief operating officer Emily Neill. 

Some 43% of adults across the focus markets – Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the UK and the US – 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- and low-alcohol drinkers (83%) enjoy standard strength alcohol too. 

Among adults who have purchased no- and low-alcohol beverages, 37% of people say the reason for doing so is to avoid the effects of drinking alcohol. A third of drinkers buy them because they enjoy the taste. Low-alcohol wine is perceived by many consumers to have a superior taste to its equivalent with growth of 20% forecast between 2021 and 2025.

The investments made by brands in making better products seem to be paying off. Health is also driving sales, while the technology in the brewing process for producing no- and low-alcohol beers has also improved, according to Anheuser-Busch InBev. 

Neil told the FT that as well as the pull from consumers, there is also the push coming from companies as they look to meet their commitments around ESG and “actually do something about the issues around responsible drinking”.

Evening occasions at home – including socialising and mealtimes – are the most popular times to have these drinks. IWSR said many of the brands targeting late night partying and dark spirits occasions have found it “tougher to gain consumer acceptance”. 

Between 2021 and 2025 volumes are forecast to increase 8%, compared to 0.7% for regular alcoholic drinks.

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