A ‘moderation motion,’ not Dry January, is driving the expansion of non-alcoholic beer

The class has been fast-expanding as customers search for more healthy choices, whereas not compromising on style and high quality. For a very long time, it wasn’t potential to attain that trinity. 

However with manufacturers—large and small, worldwide and native—venturing into the house, drinkers have extra selections than ever earlier than.

This development comes at a time when “regular” beer consumption is experiencing considerably of a decline. Take the instance of traditionally beer-loving Germany, the house of Oktoberfest. Folks there have been falling out of affection with beer in recent times with a marked decline in consumption—simply final yr, beer gross sales fell 4.5%, in keeping with official figures. Germany is now among the many prime European markets for non-alcoholic beer, knowledge from beverage market analysis group IWSR reveals.  

Whereas which may sound grim for some conventional brewers, it simply signifies that a brand new product class adjoining to beers is opening up for the alcohol-avoidant crowd. Globally, the non-alcoholic beer market was valued at $22 billion in 2022, and it’s anticipated to develop a steady 5.5% within the subsequent 10 years, market analysis group World Market Insights discovered. 

Shifting away from ‘tired and dusty’ 

With “Dry January” within the rear-view mirror, one factor’s clear—whereas it’s an effective way to get individuals to contemplate alcohol-free drink choices, choosing such drinks is effectively past a one-month fad. Take into account Fortunate Saint, Britain’s prime manufacturers devoted to alcohol-free beer, in keeping with market analysis agency Circana—the corporate noticed a whopping 158% gross sales development within the week main as much as Christmas in comparison with the identical interval a yr in the past.  

The development has additionally caught the eye of the world’s greatest gamers. Alison Payne, brewing behemoth Heineken’s international advertising and marketing director of zero alcohol drinks, has noticed over time that Dry January helps convey extra individuals into the rising marketplace for no-alcohol drinks.

“People who come into Dry January keep some of that moderation habit after January,” Payne advised Fortune. 

Amsterdam-based Heineken was among the many first well-established worldwide brewers to introduce non-alcoholic beer merchandise. Heineken 0.0 first launched in a choose few European markets in 2017, and now’s out there throughout 110 markets. The model’s “0.0” merchandise modified non-alcoholic beers from being seen as “tired and dusty” to drinks which are dynamic and modern, in keeping with Payne.

“It started with a sort of educational piece which is making sure consumers are aware,” she stated. 

Heineken, world’s second-largest brewer, launched its no alcohol vary with the “now you can” marketing campaign, the place individuals have been seen driving and making displays with a Heineken 0.0 bottle in hand to indicate what choosing non-alcoholic beers might be like.

U.Ok.-based Fortunate Saint’s CEO Luke Boase advised Fortune that accessibility has been one thing the model has labored onerous to attain and continues to consider. The corporate has achieved triple-digit development in 2022 and 2023 following the curiosity it’s gained. 

“The availability piece is something that we’ve massively prioritized as a business and kind of driven hard to get—[to] make sure that this is not just a product that sits at the bottom of a fridge and never gets seen. It’s available on menus…it’s available on draft now,” Boase stated. 

In an effort to try this, Fortunate Saint partnered with pub group Mitchell & Butlers for its “Thou shalt go to the pub” marketing campaign, freely giving 10,000 free pints of its non-alcoholic beer to have a good time Dry January. Fortunate Saint stated it had a file January as extra individuals selected its beers this yr, Boase stated.     

Such campaigns make a giant distinction in constructing consciousness so individuals actively think about non-alcoholic beers, Susie Goldspink, the pinnacle of no- and low-alcohol insights at IWSR advised Fortune.

“The quality of no-alcohol beer has improved markedly in recent years, products taste much better, are more comparable to full strength equivalents and are more widely available with a lot of marketing spend and campaigns driving awareness,” she stated. “We are at the stage of category development where the big players are helping to encourage category trial and confidence with their products which is benefitting the smaller independent players too.”

The ‘moderation movement,’ Gen Z and past 

Whereas individuals are typically trying to reasonable their alcohol consumption, it’s Gen Zs (who will probably be between 12 and 27 years outdated in 2024) coming of age who’re driving the expansion of non-alcoholic beers and reshaping a brand new period of social consuming, in keeping with Payne. 

Moderation, in as we speak’s age, means “a lot of fluidity” in consuming, she stated—one instance of that’s alternating between conventional and non-alcoholic beers on an evening out.  

Heineken’s non-alcoholic beer market can look very completely different based mostly on the nation—in Spain, for example, this section is well-developed and includes almost 10% of the general beer market. The Netherlands can also be among the many most mature 0.0 markets, Payne stated. Heineken’s objective in Europe is to supply extra non-alcoholic options for main strategic manufacturers within the area. 

The timing is particularly ripe now, Payne identified, as Gen Zers usually tend to think about changing their alcoholic drink with a non-alcoholic one. 

“Older consumers still have a bit of their old habits, which is that 0.0 beer is for when you’re giving up, whereas Gen Z are much more open to this fluidity in relation to moderation,” Payne stated. 

Fortunate Saint’s Boase echoes the concept that the youngest customers—belonging to Gen Z—have the best quantity of people that select to not drink in any respect. However a extra probably thread that attracts customers, no matter their age, to the Fortunate Saint model is their well being consciousness. 

“The biggest driver of the category and people coming into the category … is health,” Boase advised Fortune, including that Fortunate Saint beers have one-third of the energy than common beer have. He added that bodily in addition to psychological well being causes have been driving individuals’s have to reasonable, but it surely wasn’t down to 1 age group to develop the no-alcohol beverage market. 

“The moderation movement is affecting all age demographics,” Boase stated. 

Luring customers with innovation

With customers able to undertake non-alcoholic drinks and corporations investing actively on this section, the following few years will probably be about normalizing non-alcoholic beer additional and getting customers enthusiastic about it.

Heineken’s 0.0 class now affords flavored beers rivaling different carbonated drinks in some markets as a solution to provide customers new experiences. 

“We’re also seeing category boundaries blurring. So, we think there’s opportunity in areas like 0.0 beer cocktails … the sort of ready to drink cocktail space,” Payne stated. 

Within the firm’s 2023 earnings report, Heineken famous a double-digit development for non-alcoholic beer and cider in a number of markets. 

“Making sure we can do fantastic draft products is going to be a big focus in 2024 … I think we can continue to offer taste variety—consumers are wanting to discover new things,” Payne stated.