“How do you manage drinking during the day? Practice!”

or how Churchill would have answered “No&Lo” in 2021

By Eléonore Lafonta & Ivan Farneti

I. Sober curious is the new 🥴

When I first dived into this category, I did not really believe in it. I was looking at my opened Corona (I usually allow myself one when working after 8pm) with loving eyes, whispering: “I’ll never abandon you, you can count on me”. But as I grow old (27 in 6 months!!), I can only but notice the devastating effects of a drinking night. And that’s how I started cheating on my dear old Corona with a 0.0% Heineken. I know that may look bad. But in my defense, I’m not the only one!

In fact, a recent study from the Portman Group found that 24% of British drinkers are keen to cut back on alcohol, rising to nearly a third (31%) for the 18–24 age bracket. And all big beer brands are jumping on this new opportunity, targeting 20 to 25% of sales from No&Lo alcoholic products by 2030.

In the world, 75%+ of global No&Lo alcohol consumption is generated by 10 countries: Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the UK and the US. Looking ahead, these 10 countries are projected to continue their growth path, with much of the absolute volume driven by the US, Germany and, actually Spain, where No&Lo has already reached 12% of the total beer market.

II. Low versus no: the new debate

This is a real debate: should we drink low or non-alcoholic beverages?

Broadly, no-alcohol products are outperforming low-alcohol beverages: in 2019–2020, the ‘no-alcohol’ subcategory increased volume by +4.5%, while ‘low-alcohol’ decreased by -5.5%. However, newer low-alcohol products like spirits and RTDs are particularly resonating with consumers in markets such as the US which are becoming more mindful of what and how much alcohol they consume. “Low-alcohol spirits is smaller than no-alcohol, but extremely strong growth is expected to continue as companies launch low alcohol by volume (ABV) versions of established brands, and consumers show less concern about 0.0% ABV in this category,” explains Sophia Shaw-Brown, Senior Insights Manager at IWSR.

III. The recipe to success: taste

Taste, like in any food product, is king! Taste in No&Lo is particularly challenging as the most used method to produce non-alcoholic products is to remove the alcohol from the liquids, which alters considerably the taste of the products compared to their fully loaded counterparts. Of course, mimicking is not the only way to go, especially for spirits, as a multitude of ingredients, flavours and colors allow R&D teams to be much more creative.

However, when consuming No&Lo products, consumers are not only expecting a good taste, but also a specific effect, relaxing and euphoric. As a matter of fact, in the movie “one more round”, the characters experiment micro dosing alcohol to be more extrovert and social. These effects are hard to achieve through non-alcoholic products since you precisely remove the very ingredient provoking these effects, but some ingredients like adaptogens and CBD are very promising.

How do you launch a Lo&NO product?

During the No & Lo conference last November, Brendan Williams from The Free Consultancy insisted on the importance of trials and samplings to get new brands into people’s hands… and throats! According to him, as much as 50% of the early marketing budget should be about samplings and trials on premises to show the right occasion and the perfect serving. For instance, 0.0% Tourtel Twist flavoured beer sponsored The Tour de France by doing samplings at every stage, making it the biggest sampling event in the world for the drink industry.

Another key success factor is to really understand the drinking occasions of your product and what it replaces. Are your customers trying to reduce their alcohol consumption or find an alternative to orange juice? Are they drinking your product at home after work or with friends at a party? Once you’ve identified who your customers are and how they use your products, focus on one consumer group and make them happy. That’s exactly what Athletic Brewery did with athletes, and it seems to have worked pretty well!

IV. Navigating a changing regulation

Now, the UK regulation distinguishes three terms:

- Low-alcohol — No more than 1.2% ABV.

- De-alcoholised — No more than 0.5% ABV

- Alcohol-free — No more than 0.05% ABV

In January, the UK regulator is expected to review the definition for the use of the label “alcohol free”. Of course, big brands which heavily invested in tech and equipment to produce 0.0% products are putting pressure to call alcohol free the liquids with an ABV of 0.0% only; while lobbying groups and the whole start up community are against it. This new regulation could change the dynamic of this nascent market, so we are all waiting with great interest on how this will come out.