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Growing taste for alcohol-free inspires burgeoning drinks market

Dec 2, 2022. Financial Review

Consumption of no- and low-alcohol beverages is on the rise, as consumers increasingly embrace a “sober curious” lifestyle or look to cut down on drinking.

The consumption of no- and low-alcohol beverages is touching $US10 billion globally, with volume estimated to expand by an 8 per cent compound annual growth rate through to 2025. Inspi Beverages

Once peaking around events such as Dry July, consumer interest in no- and low-alcohol drinking is increasingly seen all year-round, says Emily Neill, COO of IWSR Drinks Market Analysis.

“To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products, and many established mainstream brands have recently crossed over to develop no/low alcohol versions of their popular beer, wines and spirits.”

The market for no- and low-alcohol beverages has reached almost $US10 billion, according to IWSR analysis, with volume projected to grow by an 8 per cent compound annual growth rate through to 2025, compared to 0.7 per cent for alcohol beverages.

According to the research, most no- and low-alcohol drink consumers are not abstaining from alcohol altogether, but are instead looking to moderate their drinking.

“The no/low alcohol market is still very much in its early growth stage in many categories and geographies, as the sector continues to define itself,” adds Neill. “Brands that will ultimately dominate in the no/low space are those that are successful in navigating the barriers of taste, price, pack format, availability and overall consumer education.”

David Andrew, founder and managing director of the No Nasties Project and Naked Life Spirits – which is one of Australia’s fastest growing better-for-you lifestyle companies – says innovation is key to meeting this growth in consumer demand.

“Whatever we produce needs to taste absolutely bang on,” he says. “If it doesn’t taste great, and provide a fantastic experience, consumers make a single purchase, and then that’s it.

“There’s no point in that; you’ve lost them and it’s a waste of money. That’s the biggest hurdle to overcome, and we spend a lot of energy ensuring we’re getting that right.”

Naked Life Spirits has developed a range of non-alcoholic cocktails and spirits. To help drive the normalisation of non-alcoholic consumption in the social scene, the company is also embarking on sponsorships and integrations with festivals, outdoor cinemas, major hotel groups and even a soon-to-be-announced major stadium deal, showing drinkers and non-drinkers, how non-alcohol options can enhance their socialising experience.


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