Retailers, manufacturers, and researchers agree: Non-alcoholic beverages are booming

SmartCompany Plus has profiled the small business and startup stories in the non-alcoholic beverage space, but what’s the bigger growth picture?

According to the 2021 IWSR Drinks Market Analysis’No- and Low-Alcohol Strategic Study, no- and low-alcohol volume in Australia increased by +2.9% in 2020. Overall, the no- and low-alcohol market outperformed regular alcohol, which registered a volume decline of -1.4% over the year.

IWSR forecasts that the no- and low-alcohol volume in Australia will grow by +16% 2020 to 2024.

In 2020, no- and low-alcohol beer and cider represented 5.3% of the total beer and cider category in Australia. No- and low-alcohol wine about 0.5%, and no- and low-alcohol spirits 0.2%.

The study also revealed that 71% of Australian consumers intend to increase or maintain their no- or low-alcohol consumption next year, and 65% of consumers in the country intend to discover new no- or low-alcohol brands in 2021.

What do the retailers say?

At Endeavour Group, the parent company of BWS and Dan Murphy’s, sales of non-alcoholic drinks have almost doubled in the 12 months, and is one of the fastest growing categories, according to sales data.

“The rise of non-alcoholic drinks is a reflection of a broader trend where consumers are choosing to drink less, but drink better. We expect this trend to continue,” says Bree Coleman, Endeavour Group’s head of merchandise transformation.

A company spokesperson says sales of non-alcoholic beer, wine, cider, RTD and spirits had increased by over 83% in the last 12 months, with peaks during July, Christmas and Easter. BWS and Dan Murphy’s have increased their range of non-alcoholic drinks to meet the increasing demand.

Additionally, 60% more customers are now buying non-alcoholic drinks from Endeavour Group, compared to the last financial year, according to the company.

The Coles Liquor group is seeing a similar trend, with a spokesperson telling SmartCompany that “sales of no alcohol and ultra-low alcohol products across the Coles Liquor network are running at around double where they were a year ago.”

Biggest brands are also driving change

Several large multinational alcohol manufacturers have committed to have 20%-30% of their portfolios as no- or low-alcohol over the next few years. This includes Anheuser-Busch InBev, which has set the goal of 20% of its total beer volume to be no- or lower-alcohol by the end of 2025.

It’s an acknowledgement that it’s not a phase or trend, but an important part of their portfolio as responsible providers of alcohol.

At its recent Asahi Investor Relations day, a spokesperson for the Japanese beverage giant said that “worldwide, while the growth of the alcohol beverage market is flat, the growth rate of products with less than 0-1% alcohol by volume is around 6%. While there are gaps between regions, Europe has the highest average annual growth in the world at 8%.

“On the other hand, the low-alcohol market in Asia, including Japan, is gradually growing, but only at a CAGR of about 3% … Asahi Breweries’ sales of non-alcohol beverages are approximately 32 billion yen, and we are planning to achieve 40 billion this year.”