In 2022, no- and low-alcohol sales across ten key markets totalled over US$11bn, with no-alcohol products accounting for 70 per cent of this figure. By 2026, the value of the no/low-alcohol category across key markets is set to grow by more than a third, driven largely by no-alcohol products.
Product innovation is increasingly focusing on meeting the needs of consumers who choose to avoid alcohol on certain occasions – also known as Substituters. 41% of no/low consumers fall into this category, the largest group within the no/low space. Abstainers from alcohol are increasing across markets, particularly in younger adult generations. This pattern is driving no- over low-alcohol growth. Pair this with the rise of functionality, much of which is restricted to no-alcohol by regulations, and the result is a strong performance from no-alcohol overall.
IWSR analyses the NPD driving this market:
No-alcohol brand extensions provide familiarity and reassurance
78% of no/low consumers also drink alcohol, and this underpins why much of the new product development in the segment comes from brand extensions on existing high profile alcohol brands. Drinkers seeking a no- or low-alcohol alternative can stay within their favourite umbrella brands, diluting any perceived risk of entering the no- and low-alcohol space.
In the beer sector, the major global brewers have harnessed their flagship brands to build their no-alcohol volumes, but we are increasingly seeing more specialist, as well as more localised, brands adding no-alcohol alternatives. Heineken for instance added Desperados Virgin Mojito 0.0%, Lagunitas Hoppy Refresher sparkling water and Cruzcampo Gran Reserva 0.0 to their no-alcohol portfolio in 2022, while also introducing a 0.0 variant to its Mexican Tecate brand.
Australia, which is at the forefront of much of the development in no-alcohol wine technology, has seen many of their well-known wine export brands utilised as a vehicle for entering the no-alcohol segment. Examples would include Mcguigan Zero, Lindeman’s Alcohol Free, Jacobs Creek Unvined, and Hardy’s Zero.
The no-alcohol spirits category is still in its infancy and is driven by a number of new-to-market, dedicated no-alcohol brands. However, launches from bigger players are being rolled out more widely, such as Diageo’s rollout of Gordons 0.0% and Tanqueray 0.0% into new markets.
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