The alcohol-free category is full of potential. Alcohol-free volumes are set to grow 7% as the category continues to grow. Meanwhile, the combined low/no alcohol is expected to grow 4%.
But this growth relies on being able to incorporate new users into the category - and reaching them is not always easy.
Focus on the off-premise
Brian Rosen, founder of InvestBev, has worked with a number of alcohol-free brands. He sees the off-trade as being where low and no beverages are really going to make in-roads with consumers.
“In the US, we’ve got two market sides: on-premise and off-premise: on-premise being bars and restaurants, off-premise being liquor stores, etc,” he explained, speaking in BeverageDaily’s Innovation in Low and No Alcohol webinar last week.
“It’s a challenge either way. You have to have a store from a retail standpoint that believes enough in the category to devote sales people and shelf space to the non-alc sector. And in the on-premise you’ve got to have a robust list of non-alc.”
Out of the two, the best option for alcohol-free drinks is the off-trade, he says.
“Very rarely does an on-premise account or restaurant or bar have the space to have both a gin and non-alc gin; a vodka and non-alc vodka. They just don’t have space.
“So the best opportunity is going to be in the off-premise, liquor stores. Brands need to push into the market and consumers need to pull that brand off the shelf. And then you’re going to need to have a salesperson or a shopkeeper in that store that is advocating for the category.
“It’s not going to be easy: but as more and more consumers ask for the product, it should become organic that the retailers, both bar, restaurant and liquor store, need to carry the product.”
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Communicating to consumers
Mark Wong launched functional alcohol-free beer Impossibrew in 2020.
The brand has done a great job of building up a loyal following of consumers in D2C channels.
But building a brand also means getting out to new consumers. And that’s one of the trickiest parts, acknowledges Wong. The brand has been on a journey to create the best possible brew with the best possible functional ingredients and flavors – and then communicating that to consumers.
“That’s been an incredibly difficult challenge because a lot of these names just don’t mean anything in the public consciousness – a lot of these sort of functional ingredients like nootropics, adaptogens," he said. “So it’s about delivering that message clearly, but I think we’re slowly getting there.
“The category is still at the very beginning stages of its development: but it’s really good that we’re standing on the shoulders of the normal non-alcoholic space where acceptance has eliminated some of the earlier questions – like whether non-alcoholic drinks actually taste good or not.”
One alcohol-free drink does not fit all
Alcohol-free wine is a category that faces a double challenge, because – as well as having to entice consumers over to alcohol-free – it also has to deal with structural declines in the wine category. So how has alcohol-free wine Eisberg dealt with this?
The key, says Eisberg’s SW Europe managing director Dan Harwood, is to bring the expertise and experience from the wine category over to alcohol-free and offer a range of products to suit all occasions.
“We’ve now developed into a full family of wines, so it’s no longer one-size-fits-all,” he said. “So we attract different audiences by having different wines for different purposes: whether it’s signature or easy drinking, light fruity style or selection, which is a more premium food friendly.
“The next challenge as we go on is how to attract a younger audience. A younger audience that does not necessarily have that experience of drinking wine, and so don’t have those occasions and those moments where they might reach for a glass of wine.
“So for us, it’s about taking alcohol-free wine outside the space, outside the wine glass if you like, and look at different formats or different cocktail blends that we can do, in order to attract a younger audience, primarily as offering them a high quality alcohol-free drink.”
