Growth trends in the non-alcoholic sector

The trend for consumers seeking alternatives to drinking alcohol has increased rapidly with 84% of global consumers actively trying to reduce or moderate their alcohol intake, according to a Global Data report.

The trend is especially widespread among young people with over 25% of 16 to 24-year-olds choosing not to drink. However, consumers of all ages are becoming more health conscious and increasingly embracing sobriety due to concerns over the potential damage of alcohol. According to Heineken USA’s incoming CEO Maggie Timoney, “If you look at the consumer trends globally, moderation, health and wellness, are key trends.”

Greater choice of non-alcoholic drinks globally is one of the key factors increasing the product popularity leading to increased consumption.

UK alcohol consumption fell from 3.07 units per day in 2003 to 2.57 units per day in 2017 and the global non-alcoholic beverage market is expected to reach $1.60 trillion by 2025.

£43m was spent on no/low alcohol beers in 2018, that’s an increase of 28% in one year.  Volume has increased by 21% and works out to the equivalent of over 12.2 million pints sold. Two major brands to launch Non-alcoholic drinks were Heineken 0.0% and Budweiser Prohibition Brew. Combined, these brands sold over £6.5m in the first year after being released in 2017.

Non-alcoholic spirit company Seedlip launched in 2015. Their first sale was 1,000 bottles to London department store Selfridges, which reportedly sold out within a week. By August 2018, 3 years since launch, the British start-up was producing 30,000 bottles per month, and is now distributing to 25 countries. In 2016, Diageo purchased 20% of Seedlip and last month announced a significant increase of its shareholding, demonstrating their commitment to the non-alcoholic spirit market.

Another fast growing ‘alcohol free spirit’ brand is ISH spirits, founded by Danish serial entrepreneur and CEO, Morten Sorensen, with the aim to ‘make it easier for mindful drinkers to lower their alcohol intake while still getting the familiar flavours of the cocktails they are used to.’  The Ish spirits themselves contain 0.5% alcohol and are therefore still considered alcohol-free. Currently selling in all Holland and Barrett stores in the UK and various retailers across Denmark, Sweden and Norway, the business is enjoying significant growth.

Last week the company won the scale-up 2019 award. Scale-Up Denmark is an ambitious training concept for entrepreneurs and small enterprises. The aim is to establish an elite of high growth companies in Denmark.

Speaking recently to Connect Search Morten explained some of the challenges of growing customer awareness in a no/low alcohol business, ‘Educating people that the flavour can come without the alcoholic content and getting consumers to try it. The media picking up on this trend, including programmes like Sunday Brunch showcasing ISH, has helped encourage the public to try the product. In addition to raising awareness finding the right talent on a budget in such a fast growth environment has also been a challenge and the ISH team requires agility and flexibility from staff.’

So, what is the future for ISH spirits and where do growth opportunities lie? ‘We’re looking to branch more into on trade, we recently developed a book of non-alcohol cocktail and drink recipes for this reason so bars and restaurants can use them.’

Morten explains that data shows ‘consumers are turning to the alcohol free trend due to health and being more mindful as to what they’re drinking as well as eating. In the UK alone 33% of consumers lowered their alcohol intake last year.’ A wider range of alcohol free options are helping people to achieve this.

Beyond what some may see as the obvious health benefits of a reduction in alcohol intake, there seems as well to be a social/behavioural reason to change, again driven by the younger generation, a concept Morten describes succinctly;

‘The underlying trend of Non-alcohol is confidence; it’s not cool as a person to go out and have to get drunk to have fun’