No/Low Alcoholic Drinks: Evolution, Drivers and Future

Delivery

This report comes in PPT.

Key Findings

Low and non alcoholic adult beverages are coming of age

While the rise of no and low alcoholic adult beverages predates the tectonic cultural, societal and lifestyle shifts exacerbated by the pandemic, the historic event did act as a catalyst and accelerant, bringing the segment under the spotlight and into consumers’ homes. Even though beer has been the pioneer in innovation within the segment, it is non alcoholic spirits that show the greatest dynamism.

The shape of drinks to come: flavour, functionality and new occasions

Lifestyle undercurrents favouring health - driven moderation initiatives, Gen Z’s propensity for personal brand curation via social media and the demand for sophisticated alcohol alternatives when visiting the on-trade are already evolving into an interest in novel occasions, functional cues, ingredients and value-added formulations - they will inform the segment’s next stage of evolution.

Moderating moderation: the downside risks faced by an intoxicatingly booming category

While non and low alcohol varietals are expected to continue making significant gains as they enter the mainstream, contextualising that performance - and its limitations - is essential. The segment still only accounts for statistically insignificant volumes across the vast majority of markets and while that underscores the untapped upside potential, it is also a reminder that any claims of it being a sign for it being an existential threat for alcohol are largely exaggerated.

Going green: cannabis cross-pollination?

Cannabinoid infusion can provide a plethora of opportunities within the no/low arena, becoming the holy grail for innovation bridging recreation and wellness while sidestepping alcohol’s downside risks. While still in its infancy and facing inevitable teething problems, non alcoholic cannabis beverages can seize the mantle of functionality and lead the category to fresh heights.