No and low-alcohol continues to outperform full-alcohol in key markets as consumer desire more sobriety

GLOBAL – The no and low alcohol beverages category continues to outperform full-alcohol as consumer interest in these drinks increasingly becomes a year-round trend across the world. 

According to new research from IWSR, the no and low alcohol category has been recording higher single-digit growth during the past year. 

In the period between 2018 and 2021, the category grew from US$7.8bn to just under $10bn across the key focus markets of Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the UK, and US. 

“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,” says Emily Neill, COO of IWSR Drinks Market Analysis. 

IWSR now forecasts that no- and low-alcohol volume will grow by +8% compound annual growth rate (CAGR) between 2021 and 2025, compared to regular alcohol volume growth of +0.7% CAGR during that same period. 

To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products.  

Many established mainstream brands have recently crossed over to develop no/low alcohol versions of their popular beer, wines, and spirits. 

In general, non-alcohol products are the driver for the category, with stronger growth rates than no alcohol products.  

Beer/cider is by far the largest no/low category (at 75% volume share), with no-alcohol beer projected to drive growth at more than +11% CAGR over the study’s 2021-2025 forecast period.  

No-alcohol RTDs and alcohol wine is expected to grow almost +20% CAGR 2021-2025, vs. no-alcohol wine projected at +9% CAGR. 

Germany tops the no and low alcohol market in volume terms: with the volume of no- and low-alcohol products in Germany more than three times that of the next-largest no/low market, Spain.  

Both Germany and Spain clocked volume increases of about +2% in 2021, while the US grew by +31% and the UK by +17%.  

However, the UK and the US are two of the most dynamic markets and are growing at a faster rate than the more mature and established German and Spanish markets. 

The no/low alcohol segment in the US is forecast to grow by +28% volume CAGR 2021-2025, and the UK’s at +6%.  

Moderation is the most common use of no/low products, with significant cross-over between no/low and alcohol consumers – and indeed with standard full-strength alcohol products as well.  

According to IWSR’s research, 43% of adults 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/low drinkers also enjoy standard strength alcohol too – only 17% of people report they are drinking no/low to avoid alcohol completely.  

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