Shifting alcohol habits and blurred lines

Softer hard drinks… and harder soft drinks

Much cross-pollination is occurring in hard and soft drinks – with no- and low-alcohol (NOLO) drinks becoming an increasingly significant segment of wine, beer, and spirits portfolios from the biggest players. Simultaneously, soft drink makers have been releasing alcoholic versions of established brands.

This kind of innovation is driven by a swing away from full-strength alcohol – or the way alcohol has traditionally been consumed – often driven by younger consumers more tuned into the negative health effects of alcohol consumption, such as brain, liver, and relationship and life damage .

These mostly millennials and centennials are frequently wary of the kinds of pervasive drinking cultures that have characterised and damaged other generations in many countries .

Market analyst IWSR found that 37% of people choose NOLO products to “avoid the effects of drinking alcohol”. A third said they liked the taste of NOLO drinks. 12

However, this doesn’t necessarily mean abstaining from alcohol completely. Only 17% said they drank these kinds of products to avoid alcohol completely – 43% said it was just on certain occasions.

“Brands that will ultimately dominate in the no/low space are those that are successful in navigating the barriers of taste, price, pack format, availability, and overall consumer education,” said Emily Neill, chief operating officer of IWSR.

The NOLO market was worth almost $10bn in 2021 in just 10 countries (Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the UK, and the US), according to IWSR. 13

While they remain very much a niche – IWSR estimates about 3.5% of the entire alcohol category –NOLO drinks are growing faster, at 6% in 2021, and are expected to surge 8% yearly through to 2025, compared with 0.7% for regular alcohol .

“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,” said Neill.

“To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products, and many established mainstream brands have recently crossed over to develop no-/low-alcohol versions of their popular beer, wines, and spirits.”

Big and small brands have moved this way, with Gordon’s alcohol-free gin just one example. 14

Smaller brands like Sobah in Queensland, Australia, produce a range of craft beers with less than 0.5% alcohol and no preservatives or chemicals, marketed as ‘non-alcoholic beer infused with Australian bush tucker’. 15

“We're breaking down the stigma of socialising sober,” the Aboriginal-led firm states.