Non-alcoholic drinks sector offers opportunities

There is huge potential for less sweet, more sessionable non-alcoholic drinks that suit premium adult occasions.
By
Alasdair Pearce

July 9, 2018

Walking through the halls at Imbibe Live this week one of my favourite finds was Punchy, a spiced rum punch available in 4% or 0% ABV “flavours”. Of particular interest was a “blind taste test” in which people were challenged to pick out the alcoholic version.

It is emblematic of how much innovation and development has gone into non-alcoholic drinks in the past few years that only a slight majority of bartenders and industry professionals detected a difference – 65 got it right, 63 failed. 

Our experience backs this up and at Morar HPI we think there is huge potential for less sweet, more sessionable non-alcoholic drinks that suit premium adult occasions. Moreover, what is evident is the growing number of people who avoid the stereotypical “Booze Britain” badge and want more non-alcoholic options. 

To understand this trend better, last month we interviewed a nationally representative sample of 1,500 regular on-trade visitors about their views on non-alcoholic drinks. Several key themes emerged. First, more than one-quarter (28%) of “lifestyle abstainers” regularly choose not to drink alcohol in social situations. This group is defined by its positive reasons for rejecting alcohol. We found the top three reasons setting them apart from the rest were preferring to stay in control, not liking the taste of alcoholic drinks, and health. In fact, almost two-thirds (64%) of them said non-alcoholic drinks were part of a healthier lifestyle. 

So what type of people are they? There is a slight female bias (57%) but they range across age groups, regions and socio-economic classes. In other words, it doesn’t matter where you go, positive rejecters of alcoholic drinks are likely to be there and looking for non-alcoholic alternatives. 

They’re also unafraid to follow the drinking crowd, with almost three-quarters (71%) feeling not drinking alcohol was becoming “more socially acceptable” and 60% saying they never “felt embarrassed when drinking non-alcoholic drinks in the company of others drinking alcohol”. 

However, are these people being catered for? Fewer than half (44%) of our lifestyle abstainers said they regularly failed to see non-alcoholic brands on menus and in fridges so considering a purchase didn’t even enter the equation. Lack of availability means traditional non-alcoholic drinks such as sodas continue to dominate, with 61% claiming to have drunk them in the on-trade in the past 12 months compared with only 7% who drank a non-alcoholic beer. 

Awareness of individual brands was similarly low, with 12% never having heard of BrewDog’s 0.5% ABV beer Nanny State, while only 3% had tried it. Interestingly the numbers were similar between our lifestyle abstainers and everyone else, suggesting brands have not done a good enough job to promote their offer to non-drinkers. Taste is another factor where the benefits need to be reinforced, with little more than one-quarter (27%) believing non-alcoholic beers have improved in taste, despite major efforts in the category. 

A huge opportunity exists to move beyond traditional soft drinks but only if consumers are educated about the category and its benefits. With Heineken committed to spending 25% of its marketing budget on Heineken 0.0% and Guinness launching its Pure Brew lager, it can only be a matter of time before consumer awareness starts to rise. Indeed, awareness among under-30s who took part in our study was significantly higher for all brands. 

Social occasions are increasingly adult and aspirational and this will require non-alcoholic drinks to reflect that. The lifestyle abstainer group is only going to grow and, with the push major brands are making in the space, operators who make non-alcoholic drinks a varied and visible choice will be in an excellent place to profit.

This article was originally published in Propel Friday Opinion. 

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