Non-alcoholic and low alcohol beers: Opportunities and challenges

Such beers can resonate with more health-conscious consumers, while there are also specific consumer groups who want to avoid alcohol.

The demonization of sugar in soft drinks could also be another factor in the growth of non-alcoholic beers, says Kevin Baker, senior consultant, Canadean.

However, the category comes with challenges, with products in danger of being seen as a lesser alternative to traditional ABV varieties.

The Radler phenomenon

Non-alcoholic and low alcohol beers are still a very small part of the global beer market.

Non-alcoholic beers account for just 0.6% of global beer consumption. However, this category’s share in some regions is considerably higher: 6.6% in the Middle East and North Africa in 2015, for example (and that is excluding figures for a larger non-alcoholic malt beverage category).

Meanwhile, low alcohol beers account for around 2.2% of global consumption.

In terms of growth, however, non-alcoholic beers recorded a 2.54% 5 yr CAGR in 2015 (by volume), while low alcohol beers reported a CAGR of 4.9%. This compares to 1.57% for the total beer market.

Non-alcoholic beers are generally considered as those under 0.5% ABV (in practice most of these beers are around 0.05% AVB) although there are no global definitions. Low alcohol beers, for these figures, are considered as those between 0.5% and 3% ABV. 

“In Western Europe sales of non-alcoholic beers have grown strongly since 2014, driven by significant promotion of non-alcoholic beers as isotonic beverages by German brewers (especially Erdinger), and increasing new product activity,” Baker told BeverageDaily.

“Latin America has also seen very strong growth, driven by the very successful launch of Aguila Cero in Colombia. 

“Low alcohol beer growth has been driven largely by the Radler phenomenon, although many brands are now launching non-alcoholic variants.” 

Challenges

Drivers, pregnant women and nursing mothers, and those who abstain from alcohol for religious regions are all target consumer groups for the category. However, each consumer group also comes with its challenges.

“Many brewers are now stressing the isotonic qualities of beer, and actively targeting sports clubs, etc,” said Baker.

“The Islamic market represents a real opportunity but care needs to be taken in positioning as any association with beer (especially if a product is de-alcoholised) can be problematic for some Muslims.

“Targeting drivers can lead to the sector being perceived as a ‘distress purchase’ (the consumer really wants a regular beer but has to drink a non-alcoholic alternative).  Historically this has been an issue for non-alcoholic beers and many consumers simply leap-frogged over the category altogether and switched to soft drinks if they couldn’t drink.”

While non-alcoholic beers may have key consumer groups to target, low alcohol beers risk suffering from their middle-of-the-road positioning.

“As a category, low alcohol has historically been a difficult proposition being neither ‘fish nor fowl’ – the alcohol content making it unsuitable for people who want or need to eschew alcohol altogether, while often not providing the expected 'kick' that consumers seek in a beer,” said Baker.

“Notable exceptions are Germany where a distinct Leichtbier category exists, and Scandinavia, although this is largely driven by taxation and distribution restrictions.”

The health-conscious consumer and beer

Alongside non-alcoholic and low alcohol beers, brewers are using other methods to resonate with health conscious consumers.

“Responsible drinking efforts have been an integral part of every brewers CSR policies for many years,” said Baker. 

“Increasingly we are seeing launches of ‘0.0% ABV’ beers, which is a stronger and more robust proposition than a more loosely defined ‘no alcohol’ or ‘alcohol-free’ positioning. 

“The ‘natural’ qualities of beer (with a strong focus on the ‘only four ingredients’ message) are also increasingly being highlighted.”