Retailers, manufacturers, and researchers agree: Non-alcoholic beverages are booming

non alcoholic drinks

A booming industry: Non-alcoholic drinks. Source: Supplied

SmartCompany Plus has profiled the small business and startup stories in the non-alcoholic beverage space, but what’s the bigger growth picture?

According to the 2021 IWSR Drinks Market Analysis’No- and Low-Alcohol Strategic Study, no- and low-alcohol volume in Australia increased by +2.9% in 2020. Overall, the no- and low-alcohol market outperformed regular alcohol, which registered a volume decline of -1.4% over the year.

IWSR forecasts that the no- and low-alcohol volume in Australia will grow by +16% 2020 to 2024.

In 2020, no- and low-alcohol beer and cider represented 5.3% of the total beer and cider category in Australia. No- and low-alcohol wine about 0.5%, and no- and low-alcohol spirits 0.2%.

The study also revealed that 71% of Australian consumers intend to increase or maintain their no- or low-alcohol consumption next year, and 65% of consumers in the country intend to discover new no- or low-alcohol brands in 2021.

What do the retailers say?

At Endeavour Group, the parent company of BWS and Dan Murphy’s, sales of non-alcoholic drinks have almost doubled in the 12 months, and is one of the fastest growing categories, according to sales data.

“The rise of non-alcoholic drinks is a reflection of a broader trend where consumers are choosing to drink less, but drink better. We expect this trend to continue,” says Bree Coleman, Endeavour Group’s head of merchandise transformation.

A company spokesperson says sales of non-alcoholic beer, wine, cider, RTD and spirits had increased by over 83% in the last 12 months, with peaks during July, Christmas and Easter. BWS and Dan Murphy’s have increased their range of non-alcoholic drinks to meet the increasing demand.

Additionally, 60% more customers are now buying non-alcoholic drinks from Endeavour Group, compared to the last financial year, according to the company.

The Coles Liquor group is seeing a similar trend, with a spokesperson telling SmartCompany that “sales of no alcohol and ultra-low alcohol products across the Coles Liquor network are running at around double where they were a year ago.”

Biggest brands are also driving change

Several large multinational alcohol manufacturers have committed to have 20%-30% of their portfolios as no- or low-alcohol over the next few years. This includes Anheuser-Busch InBev, which has set the goal of 20% of its total beer volume to be no- or lower-alcohol by the end of 2025.

It’s an acknowledgement that it’s not a phase or trend, but an important part of their portfolio as responsible providers of alcohol.

At its recent Asahi Investor Relations day, a spokesperson for the Japanese beverage giant said that “worldwide, while the growth of the alcohol beverage market is flat, the growth rate of products with less than 0-1% alcohol by volume is around 6%. While there are gaps between regions, Europe has the highest average annual growth in the world at 8%.

“On the other hand, the low-alcohol market in Asia, including Japan, is gradually growing, but only at a CAGR of about 3% … Asahi Breweries’ sales of non-alcohol beverages are approximately 32 billion yen, and we are planning to achieve 40 billion this year.”


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5 months ago

Yes, earlier this year, I asked both Endeavour and Coles (I have shares in both) to consider having a dedicated area in their store for Lower Alcohol Wine in the 5% to 10% range to make it easier for consumers to find them. They have dedicated areas for the likes of Organic Wine, sweeter wines and zero alcohol wines, but very little in-store highlighting of Lower Alcohol Wines which should be a Category on its own. Murphys now have some labelling on their racks to identify some of what they stock, but definitely not all. Just check out what is happening with NZ who are leading the world with their “NZ LIGHTER” program.