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UK among fastest growing no & low markets

Published:  23 August, 2022

The no-alcohol volume sector has been growing exponentially in recent years. If the latest IWSR data is anything to go by, the upward trend shows no signs of slowing, particularly in the UK.

According to the IWSR, Germany dominates no-alcohol volumes. However, smaller markets, such as the US, UK, France and Australia, are growing more rapidly.

These markets recorded double-digit no-alcohol volume growth in 2020-2021, compared to a flat performance in the more mature German market. All four are also expected to grow in the years ahead.

The total volume of no/low alcohol is 10 times greater in Germany than in the UK, but the UK is expected to grow at a higher compound annual growth rate over the next few years (at almost +6% volume CAGR 2021-2025, compared to about +2% volume CAGR in Germany).

Among the 10 largest markets for no/low alcohol, the UK sits at #5, in terms of total volume.

This has been made possible by innovative post-pandemic trends such as cross-category brand mobility, "better for you" products and specialist retail channels. 

"Successful no-alcohol brands are moving between no-alcohol categories in a way that is not always possible for regular alcohol," said Susie Goldspink, head of no and low-alcohol at IWSR.

Furthermore, the rising importance of the ‘aperitivo occasion’ drives demand for non-alcoholic substitutes. For example, the global spirit and wine aperitif category grew 23% in 2021 and is expected to grow at a 5% volume CAGR 2021-2026. 

Goldspink said: "Taking advantage of the success of the Aperol Spritz, multiple brands have launched no-alcohol versions across both the core spirit and RTD variants."

In the UK, these products span established brand spin-offs, such as Martini Floreale and Vibrante, Seedlip's aperitivo sister brand, Aecorn, and specialist aperitif range Everleaf, which has secured retail and on-premise listings.

However, the most significant driver in growth is arguably related to the perceived health benefits of the low and no category.

According to Kam research, nearly one in three pub visits (29%) and 36% of restaurant visits are now alcohol-free. According to the figures (which can be found in the August edition of Harpers), those who drink 11-20 units of alcohol per week on average are buying in most frequently to the low and no category.

No-alcohol products that are perceived as 'better for you' are innovating by using adaptogens, probiotics, antioxidants, nootropics and other naturally sourced ingredients.

In the US, hemp and adaptogen-infused beverage marketer Recess recently launched a limited edition Zero Proof 'Margarita' - the first time the brand has directly marketed a product as an alternative to alcohol. In addition, one hemp-infused non-alcoholic brand, Aplos, directly targets the alcohol occasion by claiming to be a "natural way to unwind, without the negative effects of alcohol".

Similarly, in Australia, hemp-infused sparkling water Beyond Hemp, launched in February 2021, claims to "restore, balance [and] hydrate". Meanwhile, UpFlow Brewing Co has created a range of rehydrating sports 'beers' with added electrolytes for use on hot or active days.

Goldspink concluded: "The no-alcohol market is still very much in its early growth stage in many categories and geographies, as the sector continues to define itself. However, consumer interest and demand for no-alcohol offerings continues to grow, propelling brands to continue investing and innovating in the sector."