Non/Low Alcohol Beer: Can it Live up to the Hype?

Overall stagnation masks diversity in beer

Remaining in negative territory for the second year in a row, the global beer market declined marginally in 2016; however, performance is far from consistent across categories. Non/low alcohol beer saw the second strongest growth in 2016, at 5%, and consistently outperformed total beer over the 2011-2016 review period.

Western Europe: A more positive outlook

In mature markets –Western Europe in particular –brewers are working to raise perceptions of non/low alcohol beer, which has historically suffered from something of an image problem. Technological advances are helping to improve the quality of non-alcoholic variants, while growing health awareness is boosting interest in the category.

The Middle East: Success through a soft drink positioning

In many Middle Eastern markets, alcohol is either not permitted or highly restricted. Non-alcoholic versions therefore have a much greater role to play than is the case in much of the world. A distinct soft drink positioning is key to exploiting demand in Muslim-majority markets, as any associations with standard beer can be detrimental to appeal.

Competition intensifies: Is bigger still better?

Craft beer has generally been heavily biased towards higher ABV products, so the non/low alcohol category has historically been the domain of major companies. However, smaller brewers are becoming more involved in lower alcohol variants, and often have greater ability to innovate and experiment. Releases from craft brewers known for quality are likely to prove beneficial to the category as a whole.

Growth –and challenges –set to continue

Non/low alcohol beer is set to be the second fastest growing beer category between 2016 and 2021. However, while the category’s dynamic growth is impressive, particularly in light of the performance of beer in general, its volume share remains distinctly limited in the vast majority of markets. Non/low alcohol beer will also face rising competition in the field of non-alcoholic, adult-orientated drinks, as demand for these continues to rise.