Alcohol-free beer has long been a curiosity in the United States beer market, but it is currently receiving mainstream attention. Consumers have more information at their disposal, thanks to consumer media outlets such as NPR or Food & Wine Magazine’s Top 10 greatest non-alcohol beers, which discuss the improved flavor profiles of non-alcohol beer.
The attention is producing concrete benefits, as total dollar sales in the non-alcohol beer sector rose 24% in the 52 weeks ending Dec. 26, 2021, throughout the whole country’s multi-outlets, according to Chicago-based Information Resources Inc. (IRI). Despite this increase, though, overall sales for the category were $236.In terms of dollars sold, the next closest brew category, in terms of dollar sales, was hard cider, which took in $489.6 million throughout the same time period.
Although the non-alcoholic beer market is still small, it has demonstrated its potential in recent years. According to a January news release from IWSR Drinks Market Analysis, the worldwide beverage alcohol market will grow by 6% in volume in 10 important global focus markets between 2021 and 2026.The largest segment, Beer/cider, accounts for 75% of the total volume and is expected to remain dominant in the next five years. Alcohol-free beer is anticipated to continue driving demand growth at a compound annual growth rate (CAGR) of 11% from 2021 through 2025, according to market research firm MarketScout.
The global alcoholic-free beer market will expand at a rapid pace over the next five years, according to MarketResearchandMarkets.com’s “Non-Alcoholic Beer Global Market Report 2021: COVID-19 Growth and Change” research report. By the year 2025, the market is expected to grow at a CAGR of 8.7% to reach $23.27 billion. The market continues to rise, as evidenced by the $15.09 billion it earned in 2020 and 2021, which was a 10.3 percent annual growth rate.
Consumers’ focus on health and wellness, as well as the fact that non-alcoholic beer is less expensive than alcoholic beverages, have helped to drive the non-alcoholic beer market’s growth.
“Shoppers no longer take their health for granted, and they have altered their habits and lifestyles to match their pandemic-inspired convictions, with 61% of Americans believing that physical and mental wellness will become more important in the next year, according to NielsenIQ’s most recent 2022 Consumer Outlook study.,” says Kaleigh Theriault, beverage alcohol thought leadership manager for Chicago-based NielsenIQ. “Consumers are interested in better (not best) options, wanting both nutrition and convenience, with 29% of customers looking for healthier alternatives when shopping..”
Grace Wood, industry analyst for Los Angeles-based IBISWorld, echoes similar sentiments. “Consumers’ growing health-consciousness has fueled demand for non-alcoholic beer, according to Foremost. “Technological advancements have enhanced the taste of non-alcoholic beer, further boosting the market since many consumers of the beverage are alcohol drinkers and seek for non-alcoholic alternatives with similar flavor profiles,” she adds..”
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Last fall, Stella Artois launched Liberté, a new 0.0% non-alcohol beer option, in select markets.
Image courtesy of Anheuser-Busch
“Non-alcoholic beer producers are delivering innovative products into the market as a result of an increase in customers’ health consciousness,” according to the research firm. “Consumers are more concerned about their health and are prepared to pay a premium for food that is particularly healthy.”
IWSR’s data also highlights that many no- and low-alcohol consumers are turning to the segment for moderation versus fully abstaining from alcohol.
“According to the new IWSR study, 43 percent of adults in the focus markets who have purchased no- and low-alcohol beverages say they are adopting those items as a substitute for full-strength alcohol on certain events rather than abstaining from drinking overall.” it states. “The majority of no/low drinkers also consume full-strength alcohol, with only 17% of people reporting they are drinking no/little to completely avoid it. Denmark, Australia, and New Zealand have the highest proportions of individuals who drink little or not at all (23%), followed by the United States (22%) and New Zealand (20%).”
The non-alcohol beer market is also bolstered by the fact that there are a greater number of recognized brands, Heineken 0.0, Budweiser, and others on offer as well as a wider range of tastes, such as IPAs from Athletic Brewing Company and a trend to remain sober when out with friends.
Stella Artois, a St. Louis-based Anheuser-Busch product, released Stella Artois Liberté, a zero-alcohol nonalcoholic brew with 0.0%abv, in select regions in late 2021 to further support this idea.
“Non-alcoholic beer has grown increasingly popular as a result of consumers’ growing health consciousness at all ages. Furthermore, technological advancements have enhanced the flavor of non-alcoholic beer, allowing it to appeal to not just those who drink alcohol but also people looking for non-alcoholic alternatives with comparable flavor profiles.”
– Grace Wood, industry analyst for IBISWorld
“We’re thrilled to be able to provide Stella Artois drinkers a non-alcoholic version of our popular brew. It’s an excellent way to add to the end of our Stella range. We want people to have more opportunities to enjoy life’s most significant events with those who matter most for us.” said Peter Van Overstraeten, vice president of premium and super premium USA at Anheuser-Busch, in a statement at the time of the release. “You’ll have the confidence to say yes to happy hour and create new memories over a cold beer once you try Liberté.”
In 2021, Dogfish Head Craft Brewery introduced Lemon Quest, a non-alcoholic brew made with real lemon puree, blueberry juice, acai berries, monk fruit, sea salt, and Hopsteiner Polyphenol-Rich Hop Pellets.The campaign, which coincided with “Mother Nature, Let’s Do This!”—a project created in collaboration with The Nature Conservancy (TNC) that encourages people to get outside and enjoy the beauty of nature—also highlighted Earth Day.
“Lemon Quest, we’ve dubbed “the brew that gives back” owing to its natural, all-natural components and affiliation with TNC.’” said Dogfish Head Founder and Brewer Sam Calagione in a statement at the time of the release. “Dogfish Head will showcase the TNC logo on all Lemon Quest packages and contribute more than $50,000 to TNC as a proud sponsor of the organization..”
Despite the fact that the future of low-alcohol beer appears bright, some are concerned about its long-term success.
“Non-alcoholic beer has a tiny customer base, with less than 1% of total beverage sales.,” BMC’s Sudano explains. “Overall expansion has been good but not spectacular. With the high level of creativity in non-alcoholic beverages and consumers’ general reluctance to accept strong brand names into the non-alcoholic beer market, sales volumes are expected to be pressured in the near future. As a result, I don’t think this rate of growth is scalable over time..”
Additionally, Sudano believes that as other alcohol-free categories, broader consumer acceptance of beer without alcohol, and distribution difficulties mount, the industry’s growth potential will be limited.
With the advent of alcohol-free beverage alcohol, only time will tell where it will go, but there are opportunities.
“Manufacturers should be looking for ways to gain a competitive advantage by focusing on the non-alcohol market. When you’re launching in this sector, you have to deal with an entirely new set of challenges. Manufacturers must establish use cases for their non-alcohol beverages and develop a distinct liquid, which is a tall order. The messaging, marketing, and branding must also be on point to draw in consumers.”
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