The demand for no and low alcohol drinks shows no sign of declining across top global markets last year.
According to IWSR’s latest Drinks Market Analysis report, the sector reached a value of nearly US$10bn in 2021. The study further states that in 2021 the no and low-alcohol beer/cider, wine, spirits, and RTD products grew by more than 6% in volume in 10 key global markets, and now has 3.5% volume share of the industry. The low and no alcohol sector is predicted to grow by a further 5.8% between 2021 – 2025, and by 8.5% in value across the same time frame.
Germany is the largest market for low and no alcohol drinks, followed by Spain, the US, Japan and the UK. “Volume of no and low alcohol products in Germany is more than three times that of the next largest no/low market, Spain. Both Germany and Spain clocked volume increases of about +2% in 2021, while the US grew by +31% and the UK by +17%,” says the report, “Total volume of no/low products in Japan registered a small decline (-1%) last year.”
The report went on to say that while Germany and Spain are the biggest and most mature markets for the sector, the UK and the US are two of the most dynamic and growing at a faster rate. In the US, the category is predicted to grow by 28% in volume between 2021 – 2025, and the UK by 6%.
“While January has become a popular month for people to cut back or abstain from alcohol, interest in no and low alcohol drinks has increasingly become a year-round trend among consumers across the world,” said Emily Neill, COO of IWSR Drinks Market Analysis. “To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products, and many established mainstream brands have recently crossed over to develop no/low alcohol versions of their popular beer, wines, and spirits.”
The report also noted that the no alcohol sector is taking more market share away from traditional brands than low alcohol. Beer and cider is the largest no/low category (at 75% volume share), with no-alcohol beer projected to drive growth at more than 1% over the study’s 2021-2025 forecast period. Meanwhile, no-alcohol RTDs and no alcohol spirits are both expected to post about 14% CAGR volume growth.
The country with the largest proportion of alcohol abstainers is the US, with 23% of no/low drinkers avoiding alcohol completely, while more than half (58%) of no/low consumers report that they choose to switch between no/low and full-strength alcohol products on the same occasion.
While growth of the no-alcohol segment is outpacing that of low-alcohol across the 10 key markets studied, there remains a strong opportunity for low-alcohol products, particularly as the health and wellness trend gains pace across the globe. “As these brands become more visible and well established and the quality improves, there is a real opportunity for growth in low-alcohol.”
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