NOLO drinks market to grow 34% by 2024

As alcoholic drinks categories brace for decline the low- and no-alcohol market is expected to grow 34% by 2024, but still needs higher quality options and greater ‘transparency’ to ensure longevity, believes two of its biggest players.

Co-founder of Warner’s Distillery, Tom Warner

From 2017 to 2019, UK volume sales of non-alcoholic spirits grew by 169.7%, according to IWSR data. As the impact of the pandemic unfolds, overall alcohol volume consumption in the UK is now expected to decline by 10% in 2020, according to the IWSR. Most major categories will post volume losses, including beer, vodka, gin, and blended Scotch, it predicts. But the low- and no-alcohol market is expected to buck the trend, continuing its volume growth by a projected 22% in the UK from 2019 to 2024 (which includes low/no beer, wine, cider, RTDs, and spirits).

Globally, the low/no alcohol market is expected to grow by 34% in volume over the same period.

Despite early anecdotal evidence suggesting that people were stockpiling alcohol and drinking more during lockdown (certainly at home), the reverse also appears to be true, with the pandemic highlighting “that moderation and wellness trends continue to resonate with consumers,” says the IWSR.

“The low-and no-alcohol sector has remained resilient through the crisis, although growth of low- and no- spirits has been hampered by the absence of a fully functioning on-premise channel, seen as key to bringing the category closer to consumers.”

‘There needs to be transparency on how these products are made’

While the low- no-alcohol market continues to grow, despite the lack of on-trade channels throughout 2020, challenges remain to its long-term success. Producers need to overcome consumers’ “bad experiences” stemming from an initial lack of quality across the category and build trust, believes Tom Warner, co-founder of Warner’s Distillery, which has been producing Warner’s Gin since 2012.

“A lot of this was down to lack of flavour in the market,” he said. “When we decided to create our range of non-alcoholic spirits, we knew flavour and authenticity was our priority. We didn’t want consumers to have to compromise on flavour and quality if they’re choosing not to consume alcohol. There is work to be done across the category to ensure that consumers know that there are high quality products out there.”

Warner’s launched its 0% Botanic Garden Spirits in September, which includes Juniper Double Dry and Pink Berry variants and is made with natural botanicals, after three years of trials and experimentation.

“Another difficulty we faced, and we’re sure we’re not alone, is creating a shelf-stable product – we learned very quickly that making great-tasting alcohol is a lot easier than non-alcoholic alternatives,” adds Warner. “Our journey has been fascinating, taking us nearly three years to perfect the science behind it while we trialled hundreds of recipes before settling on a process which combines four distilling methods. There needs to be transparency on how these products are made, how they need to be stored and for how long in order to ensure confidence is not lost in the future.”

Seedlip and Æcorn recently launched a bottled version of its NOgroni, made with equal parts Seedlip Spice 94, Æcorn Bitter and Æcorn Aromatic.

Similarly, Ben Branson, founder of non-alcoholic spirits brand Seedlip, says the category is in need of “more high-quality” options if it is to firmly establish roots in the long-term, from “ingredients and sourcing to production processes and technical stability to language, marketing, design and brands”.

“This needs to be aspirational, positive and credible to really become a routine part of people’s repertoire long-term,” he adds. “There are over 125 products now in this non-alcoholic spirit space globally and the spectrum of quality is very wide. We need more consistency of first experience for the consumer and more creativity and diversity to marketing and our brands.”

Low- and no-alcohol consumption ‘not limited to teetotalers and abstainers’

While the desire to reduce alcohol intake is still the driving factor behind the low- and no-alcohol trend in the UK, it’s not only teetotallers and abstainers who are buying in to the category.

According to a recent IWSR consumer research, over half of those consuming low- and no-beverages choose to switch between alcoholic and low- or no-alcohol drinks on the same occasion. While 76% of consumers say they will continue to drink low- or no-alcohol beverages “as regularly or more regularly than they do now in 2021”.

What’s the next big thing in non-alcoholic drinks? Non-alcoholic dark spirits, premium NA beers and CBD-laced serves are all in the frame. But for Branson it’s all about savoury flavour development, and shrubs.

“Trend wise, there is definitely a growing acceptance that better NA options need to be considered and offered but it’s still such early days,” he says. “I think overall there will be more awareness of drinking less, drinking better and therefore more opportunities for non-alcoholic occasions. We’ll see more savoury, sour and bitter options as people move away from sweetness. I think we’ll see more flavoured mixers and more adult flavour profiles. Look out for salt, smoke and shrubs to be in.”