The Danish brewing giant saw alcohol-free brews grow 16% in volume across the group's global portfolio, against 1% volume growth for its Core Beer portfolio.
Alcohol-free beer now makes up around 4% of Carlsberg's net revenue and 3% of its volume.
Emphasis on local brands
While Carlsberg 0.0 - Carlsberg's alcohol-free take on its flagship brew - may be the most recognisable, it is in fact local brands that are the main part of Carlsberg's alcohol-free portfolio, said CEO Cees 't Hart, speaking to analysts in last week's H1 2019 earnings call.
“Our portfolio of alcohol-free brews continued to significantly outperform the beer market, delivering growth of 16% with very strong growth rates being achieved in markets such as Russia, Poland, and the Nordics,” he said.
“Our alcohol-free brews mainly consist of local brands such as Baltika 0 in Russia, Munkholm in Norway, and Nordic in Denmark. We continue to see very interesting long-term volume and value growth opportunities for craft & speciality and alcohol-free brews in all three regions.”
Zeroing in on growth
Carlsberg’s alcohol-free portfolio is headed up by Carlsberg 0.0, an alternative to its flagship brand. The beer is described as “sharp and naturally refreshing as a traditional lager – yet is free of alcohol…Like all of our beers, it is brewed with natural ingredients…then brewed in the same way as we brew our Carlsberg Pilsner style beer, before gently removing the alcohol”.
Carlsberg also offers local options such as Carlsberg Nordic Ale, Carlsberg Organic Non-Alcoholic and Carlsberg Nordic Gylden Bryg (all 0.5% ABV). It also has other brands such as Munkholm in Norway, Feldschlösschen Alkoholfrei in Switzerland and Baltika #0 in Russia (which grew 35% in FY2018).
Its first global standalone alcohol-free brew Birell was launched in May last year in Bulgaria and Poland.
Cees ‘t Hart says Carlsberg's no and low alcohol portfolio is an important part of its SAIL ’22 program (its long-term growth strategy plan).
Drawing on research that shows 68% of consumers aged 24-45 make conscious attempts to consume healthily, Carlsberg says it wants to drive non-alcoholic beer as a category through line extensions and stand-alone brands, and by investing in technology to overcome taste barriers.
Along with its craft and speciality portfolio (which grew 17% in volume over H1), alcohol-free is one of the fastest growing areas for the company.
“When you look at the alcohol-free beer, we are approximately 3% of our volume and 4% of our net revenue," said 't Hart. "Craft & speciality is 4% volume and 10% net revenue. So, we are moving the needle, so the total craft & speciality and alcohol-free beer is 10% of our volume and 14% of our revenue."
