Non-alcoholic spirits are popping up everywhere. But the category still has a few lessons to learn
Our consumption habits have radically changed in 2020. While many of us were passing the time while pouring a glass of wine or cracking a beer, home drinkers were also looking for non alcoholic alternatives.
Citing Nielsen data, the free and low ABV sector has experienced an impressive growth of 506% since 2015, with additional data predicting that the non-alcoholic sector (including soft drinks) will reach $ 280 million in revenue this year. The category’s annual growth is expected to reach 7.1% by 2025.
A record 12 new non-alcoholic spirits brands launched in the United States and 11 new brands launched in the UK market. That makes a total of 29 and 42 brands in each market, respectively. With the expanded selection, non-attendees can choose from non-alcoholic tequilas, rums, whiskeys, and even amaro, along with an army of non-proof beers and canned options.
But new information has noted that if the category is growing rapidly, brands must learn how to make meaningful connections with home drinkers to truly be successful.
A study by the Diageo-supported Distill Ventures found that the ABV-free category faces three major challenges: “fluid excellence, education, and alcohol consumption experience.”
The study is based on research from the IWSR and CGA.
On-premise is an essential tool for brand discovery, with bartenders acting as the gatekeepers of the category. The bars are, for the most part, closed and without bartenders to present non-alcoholic spirits in various forms, home drinkers don’t quite understand the appeal. Distill Ventures notes that “developing delicious, elevated cocktail experiences through zero-proof offerings is both difficult and expensive.”
Without the educational teachings of bars and events, the sober-curious are not indoctrinated into the nonalcoholic spirit world as quickly as they were in pre-pandemic times.
Think of it this way. Spirits and beers without ABV have flourished as an alternative drink to sip at parties and in bars. With the parties canceled and the bars closed, they are losing some of their momentum. While I’ve always wanted to open up a non-alcoholic beer when the deadlines are looming (Brooklyn Brewery, Partake, and Suntory’s All-Free are particular favorites), my tee-totaling partner doesn’t see the point in the homemade – extra calories without the effects of alcohol? No thanks. Pick one up at a bar or party, maybe, but the raffle isn’t there for him at home.
These are relatively minor hurdles for the NA industry – growing pains, if you can.
Driven by increased interest in wellness and the growing selection of non-ABV drinks, 58% of consumers are drinking more non-alcoholic drinks than last year, while 61% of consumers want better choices when it comes to NA drinks .
The majority of these drinkers are not abstainers: they are average drinkers who are simply looking to take a break from drinking, whether it’s taking a night off or getting some rhythm between drinks. (I’m a martini fan, but more than one or two at a time will let me spin, so I break my martinis with something weak or no ABV.)
Investors take note, and non-alcoholic spirits brands get the most funding. Canadian-owned non-alcoholic brewery Partake in full swing $ 4 million in funding while CleanCo got $ 12 million. Diageo recently acquired a minority stake in Proof of ritual zero.
E-commerce is a big guarantee of success for the category: e-commerce through Amazon, grocery stores and branded sites have “ energized the segment ” this year, according to Distill Ventures.
The UK is currently the “most mature” market for the NA category, according to the study. (Not surprisingly, as this is the starting point for Seedlip, arguably the most popular alcohol substitute available.)
This year, the UK has seen established spirits brands enter space, launching unproven options to match their usual ABV traffic jams.
We haven’t seen this in the United States yet, but I think it’s imminent.
With that in mind, I’m curious how this year will go for the category. For one thing, after drinking too much until 2020, I’m sure people are looking for a reprieve. According to Alcohol Change UK, almost a third (29%) of adults surveyed said they drank more in 2020 than before. People reported drinking earlier in the day (26%) and drinking more often (31%).
Nielsen noted that sales of low-alcohol, non-alcoholic alternatives soared 30% amid UK lockdown and non-alcoholic beer sales increased by 44% in the United States in May compared to last year.
On the other hand, the way 2021 is going so far, we might need a collective strong drink.
Either way, the dry month of January will mark the rhythm of the year – it’s Christmas for the alcohol-free world. Drinkers are looking to give their bodies a break from the holiday season and start the year off on the right foot.
Search results for “ dry January ” increased 25% in the United States and 10% globally between 2019 and 2020, according to Google
As I mentioned earlier, Alcohol Change UK noted that 6.5 million people worldwide are expected to participate in Dry January 2021, up from around 3.9 million in 2020. These are impressive numbers considering that when the movement was launched in 2013, only 4000 people signed up to abstain.
As the Distill Ventures study found, non-alcoholic brands need to capitalize on in-home experiences. If so, Dry January will be the time to implement measures to entice new consumers, whether through social media or other discovery channels.
Our options for dry January are quite attractive. Mediterranean-influenced aperitif without ABV Ghia is fantastic: bright and bitter from the combination of Riesling grape juice, gentian root and ginger. A worthy substitute for an after-dinner amaro.
I recently opened a bottle of APLós, a spirit infused with alcohol-free hemp. It relies on mood-altering benefits rather than alcohol, and it quickly became one of the only NA options I would actually sip on, although it was truly refreshing enriched with soda and citrus. Seedlip helps with a low ABV Negroni, while I sip Gruvi prosecco with vermouth for the same reason. I can’t wait to try both Curious Elixirs and Proteau.
A few years ago, quality and variety was the biggest obstacle for alcohol-free brands. Liquids excellence is always a major challenge, but now, with drinkers stranded at home, brands need to focus on building meaningful brand relationships and experiences without the help of bartenders.