Blurring Lines in Alcoholic and Non-Alcoholic Drinks

Key Findings

Premiumisation continues to define drinks

Drinking habits are changing - alcohol consumption in volume terms has been falling for many years in key mature markets. At the same time, quality of ingredients, brand province and flavour are becoming increasingly central in consumer demand across drinks categories.

Category erosion accelerates

The blurring of product lines has been occurring in alcoholic drinks and soft drinks for some time. However, the pace of change is accelerating. Taking the trend a step further are hybrid products best described as alcoholic versions of traditionally non-alcoholic drinks - tea and kombucha lead the way.

Healthy living trend opens new ground

Health awareness is influencing consumer decisions across categories. Artificial sugar concerns in soft drinks and efforts to limit alcohol intake are boosting the emerging middle ground between alcoholic and non-alcoholic drinks. Companies on both sides are exploring options for attracting consumers in this competitive premium non-alcoholic adult beverage space.

Craft cues remain relevant as tastes shift upmarket

“Craft” was pioneered by small players in the beer industry, but elements of the trend now feature across drinks categories. Authenticity, heritage and artisanal credentials remain relevant. Many soft drinks players - large and small - are looking to draw on these ideas, for example, using cane sugar to enhance the sense of tradition.

A desire for experience shapes drinking trends

The experiential aspects of consumption are gaining significance, particularly in the on-trade; bars and coffee shops are increasingly expected to offer something above and beyond a simple drinking location. As a result, traditional rules of drinking behaviour are becoming less rigid, and evening socialising may well involve a coffee rather than a pint.