Soft drinks and non-alcoholic beer: are the battle lines being drawn?

The rise of Islam and states where alcohol is prohibited is also a strong driver for the market, said speakers at Canadean International Beer Strategies Conference in Amsterdam last week.

No longer second best​

Kevin Baker, account director, Canadean, said non-alcoholic beer has traditionally been consumed by people who would prefer to drink something else – but were obliged to turn to alcohol free beverages because of driving or health concerns.

“Historically, I would argue that non-alcoholic beer has been selected for negative reasons,” ​he said. “What I think we’ve seen, certainly over the last couple of years, is a real shift away in terms of perception from non-alcohol beer, to being something very positive. ​

“Clearly one of the drivers behind the rise of these products is going to be the rise of Islam, and states where alcohol is prohibited. There is a very large and growing Islamic population, and the prohibition of alcohol is tending to become stronger, not more liberal.”​

While the overall beer category is expected to show 3% volume growth, non-alcoholic beer can be expected to show more promising growth, he said.  ​

“Non-alcoholic beers will provide growth opportunities for brewers going forward.”​

Category blurring is taking place – for Baker, a beer (non-alcoholic or otherwise) has to have hops (whereas a number of similar non-alcoholic beverages do not contain hops). But consumers do not necessarily make this distinction.

Asked if he sees mainstream soft drinks companies impinging on the strength of traditional brewers, Baker said, “Clearly the move by Coke to acquire a major stake in Aujan and Barbican [non-alcoholic malt beverage brand] does signal they are moving into that part of the beer market. ​

“I think it's probably unlikely they’d move into the alcoholic part of the beer market, but clearly there is going to be some overlap as brewers start to look at non-alcoholic alternatives, and soft drinks – as they already have – make moves towards things that maybe have some beer credentials.”​

Consumption occasions​

Oliver Braun, Sales Director International for Krombacher Brauerei in Germany (which has a range of non-alcoholic beers), sees competition between the two sectors, with consumption occasions for non-alcoholic drinks starting to match those of soft drinks.

“In the past, non-alcoholic beers were positioned as a product of abstinence,” ​he said. “Today it’s completely different. Today, as long as you have a really good non-alcoholic beer, then it’s a product for whenever you want. So there are lots and lots of consumption occasions.  ​

“There are market places where you are not allowed to drink, so you must offer a non-alcoholic beer. But also the good taste, and many non-alcoholic beers today have evolved into very acceptable products as an alternative, then you can drink it whenever you like.​

“Then there are moments when performance related pressure is on your shoulders and you must abstain from drinking, then non-alcoholic beer is an option.​

“There is the refreshing part of non-alcoholic beers – it may challenge, and does challenge the soft drink segment. ​

“In summary, the consumption occasions are so large and so versatile. Different ages, different objectives”​

Looking at the global development of the non-alcoholic beer category, Braun explained the market was 35m hectolitres in 2014, but this is predicted to rise to 46m hectolitres in 2018.

“Two thirds of consumers are not coming from beer but from other alcoholic-free beverages. This is why we may see some soft drinks companies also going into the industry – if the brewers are not faster,”​ he said.