Global players focusing on surging demand for no/low alcohol beverages to drive growth

WORLD – “This is a movement,” pronounced Marcus Sakey, the founding partner and chief brand officer of Ritual Zero Proof, as the World’s largest spirits maker Diageo announced a minority investment in the US-based alternative spirits producer, that replace gins and whiskies in cocktails.

“Just like almond milk and veggie burgers, spirit alternatives are changing the landscape,” he added, predicting that within 18 months, the non-alcoholic options will be on every menu and the shelves of every grocery store in the US.

He further added that Ritual Zero Proof is the only American-made spirit alternative that echoes the taste, smell and burn of a spirit – without the alcohol or calories.

He is right. Young, millennial consumers, and adults who are adventurous are turning the tide on the trends in the alcoholic beverages market – be they beers, spirits or wine – around the World, as consumer demand for complex, flavorful and interesting alternatives to alcohol surges and as more people choose not to drink alcohol or go for lower alcohol alternatives.

Drinkers shy away from high alcohol drinks

According to a 2019 Distill Ventures data study, 58% of consumers are drinking more no-and low-alcohol content drinks than last year, adding that globally, consumers explicitly mention “non-alcoholic” 81% more often than they did one year ago, according to a Google Trends survey that was done between May 2018 and 2019.

Furthermore, according to leading research company Global Data, 59% of global drinkers ensure they do not drink too much alcohol in general and about 50% are concerned about the long-term health impact of drinking too much alcohol.

The company also adds that moderation and avoidance of alcohol is a key trend driving demand for adult soft drinks among alcohol drinkers.

Pushed on by the rising focus on health and wellness, majority of 18-24 year olds in a survey in the US were found to aim at reducing their alcohol consumption, with a focus on lower alcohol or lower calorie products – while seeking to mark a moment with something more than club soda, creating a demand for even more spirit alternatives.

Research company Global Market Insights (GMI) opines that strong growth prospects in Islamic countries owing to religious concerns are expected to further drive market growth, riding on popularity of these beverages in the Middle Eastern countries, while stringent regulations in many countries due to the legal alcohol consumption age will promote further demand.

Lower taxes imposed on lower alcohol beverages will also push the introduction of these drinks across the world.

GMI reveals that the demand for low alcohol beer variants is becoming more popular among women and geriatric population in North America and Europe, while vital benefits such as negligible post-drinking side effects, addition of healthy antioxidants and enzymes to the drinks and a reduction in the effect of insomnia after consumption will lead to further industry expansion.

Surging demand for no/low alcohol beverages

The global non-alcoholic beer market size was valued at over US$ 13.5 billion in 2016 and is expected to see growth of 7.5% CAGR, according to a study by GMI, hitting US$ 25 billion by 2024, out of the total US$ 600 billion beer market.

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In terms of volume, global sales of non-alcoholic beers and alcohol-free mixed beers beverages totaled 4,091 million liters in 2018, with sales of 4,353 million liters for 2019 projected.

While mainstream beer volumes are at best, stagnant, in many developed markets, including the US and Europe, Global Data low alcohol beers are projected to grow 3.5% while that of no alcohol ones to surge 4% across the World.

According to GMR, Europe dominates the non-alcoholic beer market with over 30% revenue share in 2016 owing to wide-ranging product availability, established distribution channel, and a large number of product launches. The UK is among the key markets in Europe due to high adoption rates and increasing penetration of events such as Dry January.

The Asia Pacific region is expected to experience the highest CAGR growth rate of about 9.5% during the years to 2027 due to stricter government regulations on alcohol consumption, drunk driving norms, growing inclination towards adoption of western lifestyles and increasing health awareness regarding the ill effects of alcohol consumption.

The U.S. accounts for over 20% of worldwide non-alcoholic beer sales, with consumption high in Middle East, Latin America and Africa, according to GMI.

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