A 0% CHANCE

What drives the no-alcohol category in New Zealand and is it set to expand its shine? The Shout NZ Editor Charlotte Cowan asks producers, distributors and those in the know.

Five years ago, if you were f searching for a no-alcohol option in your supermarket, you’d be lucky to find one or two options. Fast forward to 2021 and there is a whole no-alcohol section - offering everything from beer, cider and wine to zero-alcohol spirits and cocktails.

This shift in the acceptance and production of no-alcohol beverages didn’t happen overnight but, in some ways, it also did. Whilst pregnant women and other non-drinkers were sipping away on yet another bland lime and soda at bars and clubs, liquor producers in New Zealand were thinking of creative ways to produce no-alcohol drinks that were appealing to consumers and not just essentially grape or apple juice with a wine or cider colour.

Push your trolley down the no-alcohol aisle at any good supermarket and you will find the likes of Ara Zero Sauvignon Blanc, Giesen 0% Sauvignon Blanc, the Edenvale wine range, Zeffer 0% Cider, Heineken 0.0%, DB Export 0.0% … the list goes on. According to Jeni Harper, Senior Category Manager at Foodstuffs South Island, there are around 70 different no-alcohol products available at Foodstuffs’ stores, with new products introduced regularly.

“Across our New World, PAK’nSAVE and Four Square stores in the South Island we’ve seen substantial growth in the zero-alcohol category,” Harper told The Shout NZ. “Sales have grown by 60%, with more Kiwis picking up non-alcoholic alternatives when entertaining guests.”

According to global liquor analysts, IWSR, no-alcohol products are currently outperforming low-alcohol beverages. In 2019-2020, the no-alcohol sub-category increased volume by 4.5%, while low alcohol decreased by 5.5%. Driven by innovation and investment in quality, IWSR says the no-alcohol beer and cider category dominates the overall no-alcohol market, commanding a 92% share of the total no-alcohol segment. And Nielsen reports that the global non-alcoholic beer market is expected to reach $5.91 billion by 2023.

Jody Scott, Zeffer Cidermaker

LEADING THE CHARGE

With global data showing beer and cider leading the way in the no-alcohol category, the New Zealand brewing sector is following suit, with a more than 100% increase in no-alcohol beer consumption in the past year. According to the latest ‘Alcohol Available For Consumption’ data released by Statistics NZ, beer under 1.15% produced for the year ending December 2020 increased 105%.

“This shows that New Zealanders are getting in behind the no-alcohol category and following international trends in the beer market,” says Dylan Firth, Executive Director of the Brewers Association of New Zealand.

IWSR says thanks to the investment in the no-alcohol beer and cider category from major brewers, consumers are becoming more accepting and familiar of the no-alcohol beer and cider as a quality product.

One of New Zealand’s major cider players, Zeffer Cider, released the country’s first locally-made 0% cider into the market this year. Produced using the same philosophy as the alcoholic ciders, Zeffer’s cidermaker Jody Scott says they wanted it to taste just as good as any of their other offerings.

“It was really important to us that it was made in line with our Zeffer cidermaking philosophy of using freshly crushed Hawke’s Bay apples and careful fermentation before removing the alcohol,” says Scott.

Scott says the process is actually incredibly difficult as the alcohol component is what gives cider a lot of its structure and balance.

“However, crafting a delicious cider in the first instance is key,” he says. “I think we’ve got the balance just right and 0% Crisp Apple Cider is a spot-on name for what we’ve crafted.

“Funnily enough we’ve had a lot of people ask whether a zero-alcohol cider is simply a sparkling apple juice, so we’ve spent a lot of time educating consumers on the cidermaking and alcohol removal process.”

Scott says Zeffer loves that Kiwis are driving the demand for no-alcohol drinks and while there has previously been a stigma around the category due to lack of selection, it’s important that consumers feel comfortable with a no-alcohol can in hand, so they can blend in if they choose to.

“Hopefully we’re revolutionising that 0% alcohol can taste delicious too!” he says.

Peter Simons, Managing Director of DB Breweries

Peter Simons, Managing Director of DB Breweries which produces Export 0.0% and Heineken 0.0%, says that while there will always be a market for the traditional styles of beer, what might change going forward is the idea that beer must contain alcohol.

“Currently Kiwis are deeply conditioned to linking beer with alcohol, as this is how it has been in the past,” Simons told The Shout NZ. “With the normalisation of zero-alcohol beer options, we may start to see the separation of alcohol from beer. “In this scenario, people might first decide that they would like a beer, then think about whether or not they want alcohol in it, and then move on to consider how much sweetness and which flavour profiles they would prefer.

“We also might start to see alcohol-free beer in more surprising places going forward as we try to break the traditional notion that beer has to contain alcohol.”

While no-alcohol beer and ciders are largely produced by the major brewers both locally and globally, IWSR suggests the segment is likely to expand in the next few years.

“The segment is likely to become even more of a focus for smaller craft producers who are able to bring a diverse range of products to the market in future.”

WINE-DING UP

While no-alcohol wine statistics are limited in New Zealand, there are now a number of options to choose from. While 0% alcohol wine is popular to take to parties or a dinner when you’re wanting a no-alcohol option, IWSR research shows the most popular place that consumers enjoy no-alcohol wine is at home.

Data from 10 key international markets (including Australia) shows that post COVID-19 lockdowns, more and more people are choosing no-alcohol when relaxing at home.

“The category’s suitability to low-tempo occasions is a key reason why it has been so resilient during the pandemic,” says IWSR.

One of the first no-alcohol wines to hit New Zealand shelves was the Australian ‘Edenvale’ range, which was first introduced into New Zealand in 2008.

“We launched our alcohol-removed wines into the market as we recognised that there were a growing number of people looking for adult alternatives to alcoholic drinks,” says Penny Owens, Marketing and Communications Manager for Edenvale Beverages.

“When we looked at what was available in the market and the commentary from consumers, networks and the industry, we knew it was important to ensure that the range of wines we produced were sophisticated, great tasting and also of course non-intoxicating.” Edenvale produces more than 15 varieties (not all are available in New Zealand) including Shiraz, Rosé and Sparkling Cuvée.

Owens says demand for the category is mostly being driven by the growing global health and wellness trend.

“People are living busier, more active lives and while one of the reasons for choosing non-alcoholic beverages includes not wanting a hangover to keep them from making the most out of their days, they also want an option that is better for them.”

Giesen Group – producers of Giesen 0% Sauvignon Blanc and Ara Zero Sauvignon Blanc – agrees that health and wellness is a large part of why consumers are choosing the no-alcohol route and why they chose to produce no-alcohol Sauvignon Blanc.

“We’re always mindful of consumer trends, and mindfulness is a hot topic,” says Duncan Shouler, Giesen Group Chief Winemaker. “Our team was inspired to make the world’s first alcohol-removed Marlborough Sauvignon Blanc after a wellness challenge - the objective was to make an alcohol-removed option that actually tasted like wine.”

Shouler says Giesen chose Sauvignon Blanc as its first no-alcohol varietal to produce as its winemaking team is intimately familiar with Marlborough Sauvignon Blanc and its intense aroma and flavour.

“They quickly identified it as a great style to work with in removing alcohol because of this,” he says. “Many of the competing products tend to be quite sweet - we really wanted a finished product that was dry and low in calories but still flavourful and wine-like.”

Shouler says when Giesen first launched its 0%, the overwhelming question they received was “why?”.

“There were plenty of people who couldn’t imagine a niche for this wine,” he says. “But for every person asking why, we had another person who shared their story - people who had health issues and couldn’t drink but still wanted to feel included was a huge part of this.

“Over the last year or so we’ve seen a huge shift in stigma as alcoholremoved options become more socially acceptable.”

Shouler predicts the category is set to grow exponentially in the future. “The calibre of alcohol-removed wines is just going to get better and better.”

EXPANDING 0% AVAILABILITY

While New Zealand has come a long way in the no-alcohol space, with the availability of no-alcohol products in supermarkets and liquor stores is growing by the day, there are still a few holes in the category in terms of off-premise and e-commerce. According to IWSR data, no-alcohol heavily over-indexes on the offtrade, with 75.4% of respondents stating they usually consider purchasing noalcohol beverages in grocery stores. But this statistic may be set to change.

In early 2020, Scottish multi-national brewery and pub chain, BrewDog, opened the world’s first alcohol-free beer bar - BrewDog AF - in London, with 15 taps of alcohol-free craft beer including stouts, IPAs and fruit-flavoured beers. While the bar is currently temporarily closed, likely due to COVID-19 restrictions, the brewer still produces an alcohol-free range and says the company believes in inclusivity.

“We have long believed that that craft beer has the power to banish the status quo that alcohol-free has somehow become synonymous with taste-free,” said BrewDog prior to the bar’s opening.

In February, Melbourne-based distillery, Brunswick Aces, announced it would be opening Australia’s first non-alcoholic bar in Brunswick East.

“We’re turning the traditional bar on its head,” said CEO and Co-founder of Brunswick Aces Distillery, Stephen Lawrence. “The demand for quality nonalcoholic drinks has been increasing year on year across the country, so the time is right for an offering that puts those choosing not to drink first.

“Our customers tell us that some premium bars and restaurants have started to put real thought behind their alcohol alternatives, but the wider industry is taking longer to catch up.

“We want to lead the charge by opening The Brunswick Aces Bar and deliver delicious non-alcoholic choices that don’t compromise on taste.

While the idea of alcohol-free bars isn’t new – with options such as The Brink, opening in Liverpool, England, in 2011; and The Other Side in Illinois, US, in 2013 – and more in the likes of Dublin and New York City, New Zealand is yet to open a dedicated, permanent alcohol-free bar. But according to Hospitality NZ, if the demand is there, it could definitely be an option. “People primarily people gather at bars as a social occasion and providing no-alcohol options provide more choice,” a representative told The Shout NZ. “If we were to see non-alcoholic bars in New Zealand, this would be driven by consumer demand.” So who will be brave enough to take on the challenge? Watch this space.

When it comes to e-commerce, Kiwis can purchase no-alcohol beverages from online liquor and grocery stores without too much bother, but there is no dedicated online e-commerce platform for alcoholfree drinks.

Across the ditch, Craftzero launched in Australia in September 2020, bringing non-alcoholic beers, wines and spirits from around the world to Aussie consumers.

Founded in Sydney by veteran alcohol distributors Marc Naggar and Sherif Goubran, the e-commerce site is “on a mission to revolutionise the way people consume alcohol and inspire a healthy lifestyle with mindful drinking”.

“The alcohol-free market is set to grow exponentially over the next few years,” said Sherif Goubran, Co-Founder and Director of Craftzero. “With higher quality products, better options available to consumers and easier accessibility, more and more will be making the switch to nonalcoholic drinks - without being judged.” So while New Zealand has happily jumped on the no-alcohol train and is well on its way to normalising alcohol-free beverages, there is always something new and exciting on the horizon. Short-lived fad? We don’t think so. ■