The rise of non-alcoholic alternatives, who are more dominant in start-ups and existing brands?
Consumer demand for non-alcoholic adult soft drinks continues to grow, triggering a wave of “alcohol-free alternative drinks” among start-ups. These companies hope to capitalize on this expanding beverage category to unlock their potential for innovation.
The South African beverage brand "The Duchess" launched the world's first non-alcoholic gin and tonic water. Its founder, Johannes Le Roux, believes that the goal of becoming a marketer of alternatives to spirits is not to try to force himself into the existing alcoholic beverage sector. Keeping a distance from traditional beer and spirits, companies no longer have to be bound by the innovative guidelines of the former, thus opening up a broader world for their own innovation.
Breaking existing categories
Le Roux said: “We have seen many alcohol brands use existing brands to produce alcohol-free products, but in the long run, disruptive products will come from brand new brands that are born without alcohol.”
“This brand is not bound by the unchanging brand language or the unchanging drinking occasions.”
By breaking the shackles surrounding the alcoholic beverage category, the Duchess hopes to open up more possibilities for consumers, especially millennials, to enjoy their products. Alcohol-free gin, beer and other spirits can make the Z generation “work hard and have fun” without the negative effects of hangovers.
Targeting the adult market
The Æcorn aperitif, which looks to the adult market, offers more pre-dinner drinks than juices and sodas.
According to the ancient formula, Æcorn's products focus on copying the drinking experience without relying on alcohol to achieve “quality”.
Claire Warner, general manager of the company, said: "We are trying to eliminate our doubts by creating products that consumers already recognize - there is a little innovation in the familiarity, not too far from the known things."
“I don’t think it’s time to look at the alcohol content to judge how good the drinks are.”
Old brand of alcohol-free products
Alcohol-free alcoholic beverages are part of a global health campaign – consumers are moving away from high-calorie, sugar-containing (with/without alcohol) beverages. Consumers' rejection of soda and juice makes bottled water the world's number one soft drink.
Healthy eating also reduces the consumption of high-calorie beer and sugary cocktails. More and more people are interested in alcohol-free cocktails and low-alcoholic beverages, and they want more than soft drinks and less cocktails.
Therefore, the low/alcohol-free market has become an inevitable existence of traditional beer giants.
After two years of research and development, Heineken's alcohol-free product Heineken 0.0 was first launched in the Netherlands in May 2017 and quickly expanded to 16 markets in Europe. In the summer of 2017, the Heineken brand announced a 7% growth rate in the semi-annual financial report, and the initial success of Heineken 0.0 was the main factor.
Carlsberg's craft beer, signature beer and non-alcoholic beer now account for 30% of global revenue. In view of the 90% growth of the non-alcoholic beer market in the past 10 years, Carlsberg launched the first global independent alcohol-free beer brand Birell in Bulgaria and Poland in May 2018, which received a “positive response” and plans to expand its promotion this year.
Carlsberg made it clear in the 2018 financial report that the sales of non-alcoholic beer in Western Europe increased by 33%, and in 2017 the company's sales in this area increased by 15%. “Our company is witnessing significant growth in the alcohol-free market, and the company will invest a lot of money to advance the development of the sector.”