Low & non-alcoholic beverages are increasingly popular among consumers. Younger adults have been trending away from traditional norms by consuming less alcohol than previous generations.
IWSR has the latest statistics from the US and around the world. Those stats show that the industry might be wise to get ahead of what appears to be a rising trend toward low & non-alcoholic beverages.
In the US, about 37% of LDA (Legal Drinking Age) adults reported not having an alcoholic drink in the past six months. Across fifteen key markets around the world, the figure was 24%. That figure is dramatically higher for Gen Z, who reported that 54% had not had an alcoholic drink in the same period.
How Does Reduced Alcohol Consumption Impact Low & Non-Alcoholic Consumption?
Among those consumers who drink alcohol, more than half say they are trying to moderate their consumption. But only about a quarter of those consumers say they are turning to low & non-alcoholic beverages as an alternative.
Indeed, of the 15 key markets, the US has the lowest penetration of no-alcohol consumption among people who also drink alcohol: only 7% of consumers, compared to a weighted average of 23% across all 15 markets.
Again, younger LDA drinkers in the US are more likely to consume both full-strength and no-alcohol products: 18% of Gen Z and 11% of Millennials, ahead of Gen X (6%) and Boomers (3%).*
This ample headroom for no/low growth is reinforced by IWSR volume forecasts for the years ahead: while the total beverage alcohol (TBA) market in the US is predicted to decline at a compound annual growth rate (CAGR) of -1.5% between 2022 and 2027, no-alcohol volumes are expected to grow at a CAGR of over +15% over the same timescale.*
A significant portion (43%) of those alcoholic beverage drinkers who were moderating their drinking, chose water. Nearly as many chose a soft drink or tea/coffee. Beer and wine followed while the smallest portion of drinkers chose no-alcohol beverages.
Challenges and Opportunities For No/Low Beverages.
Older consumers seem less likely to find no/low beverages satisfying. They report disappointment with taste, variety, availability and cost. Boomers complain that low & non-alcoholic beverages are too expensive compared to younger consumers.
Even among those who regularly consume no/low beverages, a lack of availability and disappointing taste prevent them from drinking no/low products more frequently.
Surveys show that the market opportunity for no/low beverages may come less from those drinkers choosing an alternative to full-strength alcoholic beverages but more from those who are looking for alternatives to soft drinks or hot beverages.
“No-alcohol drinks are more likely to recruit from soft drinks occasions than alcohol,” says Goldspink. “Water, followed by coffee/tea and other hot drinks and soft drinks, are the beverages being replaced the most by no-alcohol drinks. A similar pattern is observed across age, gender and consumer type.” *
The fact that younger consumers are more open to low & non-alcoholic beverages shows that there is real opportunity for the market. The winners will focus on taste and address consumer complaints about variety and availability while building robust brands that capture an ever-growing market.
Recent Comments