International Wine & Spirits Data Analytics (IWSR) released its Low and Non-Alcoholic Beverage Strategy Study 2021, which analyzes data from 10 key countries that together account for 75% of global low and non-alcoholic beverage consumption, including Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the United Kingdom and the United States.
The report notes that the global low and non-alcoholic beverage market is expected to grow as consumers seek to reduce their alcohol consumption. In 2020, the low and non-alcoholic beverage category maintains a positive growth trajectory of approximately 1%, with a 3% market share of the overall alcoholic beverage market, despite the impact of the pandemic.
IWSR said:- “We are seeing a moderate trend sweeping through key global markets, which is bringing about an increase in demand for low, non-alcoholic beverages.”
01.
Low, non-alcoholic beverages
Overall, non-alcoholic products outperformed low-alcoholic beverages: In 2019-2020, sales of non-alcoholic products increased by 4.5%, while sales of low-alcoholic products declined by -5.5%.
In high-volume markets such as Germany and Spain, traditional low-alcohol beer brands underperformed, contributing to the decline in sales. However, in markets such as the U.S., newer low-alcohol products, such as spirits and RTDs, resonate with consumers increasingly concerned about what and how much they consume.
IWSR research suggests that people often choose not to drink alcoholic beverages or drink low levels of alcoholic beverages to “avoid the effects of drinking,” emphasizing a preference for moderation over abstinence.
While this may seem inconsistent with the popularity of non-alcoholic products, it depends on the occasion they get drunk. More than half (58%) of low and non-alcoholic beverages consumers say they switch between both low and non-alcoholic beverage products and those with full alcohol content. In comparison, only 14% say they do not drink at all.
02.
Impact of the pandemic
As a result of the epidemic, total global alcohol will decline by an average of about 8% by 2020. In contrast, however, the two categories of low and non-alcoholic beverages remain relatively stable.
The most popular occasion for consuming cheap, non-alcoholic products is relaxing at home (64%). The fact that this category lends itself to low-paced occasions is a key reason it is so resilient during a pandemic,” says IWSR. Our research also shows that consumers agree that taste is key to drinking low- and non-alcoholic beverages, suggesting that consumers are often willing to pay similar prices for low- and non-alcoholic drinks.”
03.
Category Breakdown
Beer
As the most mature sector, the low and non-alcoholic beer and cider categories dominate the overall low and non-alcoholic market with a 92% share.
IWSR notes, “Consumers are becoming more familiar with and accepting low and non-alcoholic beer as a premium product as a result of the major brewers’ investments in this segment. While a few key beer companies dominate this segment, the market remains fragmented. Many smaller brands are vying to establish themselves as market leaders in this area. This segment is likely to become a focus for smaller craft brewers who are well-positioned to bring a diverse product offering to the market in the future.”
Spirits
However, the spirits industry is expected to see the most growth as people increase their expectations with drinks and cocktails beverage at home in the pandemic – despite a small base of 0.6 percent for the low, non-alcoholic spirits market.
In 2020, spirits sales grew by 32.7%, compared to a flat 0.5% performance for beer. Spirits are also expected to grow at the most significant CAGR of approximately 14% from 2020-2024.
Wines and RTDs
After solid growth in the U.S. and U.K., low and non-alcoholic wines rose 4.9% last year. Meanwhile, low, non-alcoholic RTD sales grew 10.2% in 2020, driven by functional non-alcoholic RTDs in Japan. The growth trajectory for both categories will continue through 2024, with both expected to grow at a CAGR of 7-8% from 2020 to 2024.
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