The non-alcoholic revolution

THE REBIRTH OF LOW & NON-ALCOHOLIC BEVERAGES

Author: Katie Warner

Not so long ago, if you didn’t fancy an alcoholic drink for whatever reason but you still wanted to partake in the sociability associated with alcohol, your choice was limited to sugary carbonates, cola, bitter lemon, tonic water, fruit juices or a sparkling mineral water with a slice of lemon (if you were lucky).Product selection and diversity were heavily lacking and brand owners had to reconsider their brand strategy, positioning and innovation to satisfy the needs of their demanding thirsty consumers.

The need for great drinking experiences if you choose not to drink alcohol has been around a long time. It hasn’t just suddenly arisen with a new generation but probably in the past, consumers didn’t have such high expectations as they do now and just resigned themselves to the limited choice available. However the rise in craft beer, flavoured ciders and the tidal wave of gin in its many botanical guises must in some way be partly responsible for the wake-up call it has had in other beverage categories, causing a rebirth of the non-alcoholic beverage sector. There is no need for market research or customer insights to see that this sector is much underplayed in the market and represents a major opportunity for the large beverage businesses.

Key to the non-alcoholic revolution, is understanding that consumers are making a positive choice to drink a soft drink – seeking something, rather than simply looking to avoid alcohol. Today’s lifestyle is all about the eternal search for holistic wellbeing and a balanced lifestyle – more than 50% of smartphone users had a health- related app on their phone in 2016 so it is fair to say that potentially in the future people may not be using alcohol as the main driver for socialising as they have done in the past. Millennials and Gen Z are drinking less alcohol than the generations before them but they are still going out drinking and these occasions need to be catered for. Also, they are more concerned about sugar intake, limiting their choice in soft drinks even further.

While fresh thinking is vital, new non-alcoholic drinks need to meet the same consumption occasions as their alcohol counterparts. So, there’s the ‘cocktail’ occasion, the ‘aperitif’ occasion, the ‘meal’ occasion, the ‘home from work’ occasion. Non-alcoholic beverages have the added potential to be able to play into other spaces that alcohol has been unable to enter into, the ‘work lunch’ occasion, the ‘pre or post activity’ occasion for example.

People are looking for drinks that add to, or even define their experience in bars and restaurants. Bartender innovated non-alcoholic cocktails are emerging to mirror the cocktail moment – complex in flavour and texture, beautiful in presentation – layers of flavour that encourage the drinker to ‘sip not gulp’.

The sophisticated palette of today’s consumer where exotic ingredients and recipes from around the world frequent the local supermarket has opened up people’s curiosity. They are no longer content with standard propositions, instead there is a greater inquisitiveness and sense of discovery and excitement around different flavours. They want better choices with greater complexity of flavours, knowledge of ingredients, served with a sense of ritual and a look and feel which gives a brand experience on a par with alcoholic counterparts.

Other trends emerging around non-alcoholic drinks are shrubs, drinking vinegars, craft sodas, hopped sodas, exotic teas, flavoured coffees, kombucha, kefir, health shots and non-alcoholic botanical spirits like Seedlip. Like gin, it is created with botanicals such as lemon peel, cardamom and cascarilla tree bark, and can be paired with tonic, or included in cocktails, offering a similar taste pro le to alcoholic spirits. At £28, it is beautifully packaged and certainly invites curiosity, at a premium price, double that of Gordons Gin!

There is also a lot of media buzz around the idea of ’mindful drinking’. Laura Willoughby MBE, a former local government councillor has co-founded a ‘mindful drinking movement’ called Club Soda which promotes bars and pubs that serve non-alcoholic drinks, alongside a Mindful Drinking Festival, which showcases a whole arena of non-alcoholic beverages.

Two former Sipsmith Distillery employees have launched Small Beer Brew Co. revisiting traditional brewing techniques to minimise alcohol content (their lagers contain between just 0.5 to 2.8% ABV) and maximise taste.

Fever-Tree, who we have been working with, launched in 2005, have seen an exponential rise in sales of their premium mixers, with shares doubling over the last year. They have understood the need for quality ingredients and authenticity of approach in creating new offerings for their audience.

Britvic owned Wisehead Productions launched its first non-alcoholic beverage, Thomas & Evans last year. Twenty ingredients, steam-distilled and filtered through silver birch charcoal provides an interesting process story and with 53 calories in a 175ml glass (around a third of the calories of a glass of wine) it plays to a health conscious consumer. To compete with Fever-Tree, Wisehead also recently launched a range of low sugar premium mixers under the brand London Essence Company.

Belvoir Fruit Farms, well known for their cordials have branched out into a range which taps into the ‘wine occasion’ with their ‘Without the Hangover’ range of non-alcoholic wine – Shiraz grapes for red and Chardonnay for white.

The ‘no and low alcohol’ revolution isn’t confined to Europe. Australia has a growing number of offers, namely Sydney’s PS40 launched in 2016, a range of crafted sodas using local ingredients like wattle, Australian ginger and native lemongrass. Danish brand Herbie Gin launched an alcohol-free botanical gin called Herbie Virgin in 2017 and a team of botanists in South Africa released The Duchess Virgin Gin & Tonic, a ready-to-drink non-alcoholic G&T with no alcohol, sugar or preservatives.

It goes without saying that profit margins on ‘low and no alcohol’ adult drinks can be highly attractive. The lack of, or significantly lowering of duty on these products paired with the comparatively high price point can create big margins. Non-alcoholic drinks have come of age. They are clearly a category in their own right and we will be seeing a lot more of them in the future.

As a branding agency, we specialise in brand strategy, positioning innovation and insight. We have worked across both alcohol and non-alcohol sectors with companies such as Diageo, Carlsberg, Brown Forman and Fever-Tree. To see more of the work we have done, please click here or contact Hayley Roe on (0)20 7352 8322.