The non-alc market is booming in Australia as consumers celebrate Ocsober, a month designed to provide a break from the booze in the lead up to the festive season.
One of the major factors driving growth in the category is the focus on innovation among Australian drinks companies. IWSR data shows that while Germany dominates non-alc volumes, the greatest innovation in the category is being driven by four countries: Australia, the US, UK and France.
Those markets all recorded double-digit no-alcohol volume growth in 2020-2021, compared to a flat performance in the more mature German market. IWSR said all four are also expected to grow in the years ahead.
Zero alcoholic drinks is one of the fastest growing categories for Dan Murphy’s, with more than 100% sales growth in the last two years. Non-alcoholic drinks are now competing with well-established categories such as aperitifs and international craft beers in terms of share of sale.
Endeavour Group Director Buying & Merchandise Tim Carroll said: “The majority of customers first discover the great quality of the new wave of zero alcohol when trying them for specific occasions, such as Dry July, mid-week drinks or if they are the designated driver. Once they have tried them, they keep coming back for more – which is why we keep seeing consistent sales all year round.”
The founder of hand-crafted non-alcoholic wine alternative NON, Aaron Trotman (above), agrees that Australia’s focus on innovation has been key to the skyrocketing growth experienced in the category.
“Non-alcoholic spirits and beer have had great innovation, which has resulted in great-tasting liquids,” Trotman said.
“This has drawn more attention to the non-alcoholic category as a whole. There has also been a mix of new brands in the non-alc space, such as Heaps Normal, alongside established brands like Heineken 0.0 that supporting the category, creating an opportunity for consumers to recognise that brands that specialise in the category might offer a more unique experience.”
Changing perceptions of non-alc wine
Consumer experiences with non-alc beer and spirits have given non-alc wine a new opportunity in the space.
“Non-alc wine has had a terrible reputation in the past,” Trotman explained. “Not enough attention has been paid to non-alc wine, it’s merely been an afterthought. With the rise of non-alc as a category, big wineries are producing de-alcoholised wines in order to capitalise on a growing category.
“The good news is that the more non-alc wines available on the market, the more eyes there are on the non-alc wine category.”
However, Trotman cautioned that liquids that don’t give consumers the best first experience will deter consumers from entering and staying in the non-alc wine category.
“The solution is to give consumers the best possible non-alcoholic experience in a wine glass,” he said. “The brands and liquids that can solve this problem are the ones that will succeed the most in the long term.”
According to Trotman, the future is bright for the category, as building on the category of non-alcoholic drinks is pulling sobriety out of the “taboo zone”.
“At NON, we like to view our passion as solving the problem behind an empty wine glass, when you’re one of the few not drinking, and doing so in a really unique or out of the box way,” he said.
“I believe that NON is contributing to solving a huge problem in the world too. We’re not encouraging the consumption of alcohol, we’re not a gateway to bad behaviour or habits, we’re stripping it back to simply enjoying flavour.”
Why non-alc prices are at a premium
Trotman said the controversy around the price tags on non-alcoholic drinks is unjustified. He believes they should retain their premium pricing despite the absence of alcohol.
“My answer when people say why would I pay for something without alcohol? Is that, simply put, alcohol is cheap and premium produce is more expensive.”
Trotman said that NON, for example, is a no-alcohol ‘wine product’ rather than a dealcoholized wine.
“We focus less on what was taken away (the alcohol) and more on the level of curation this allows,” he said.
“Nobody in the world is cooking natural produce and turning that into craft beverages the way NON is. We’re much more unconventional in our approach, flavour comes first, and it’s resulted in a consumer experience that we’re extremely proud of.
“We aren’t looking to mock, mimic, or replicate wine, that was never the assignment. Our success comes from the desire to create a great beverage, alone, not a great non-alcoholic beverage.”
Speaking at the Innovation In Non-Alcoholic Beverages Conference in London early this month, corporate affairs director at Heineken UK James Crampton said there were also hidden costs consumers needed to consider.
For Heineken, maintaining investment in the category was key for innovation and brand building, but it “comes at a cost”.
Crampton said: “The reality is we are marketed as an adult beverage. Heineken 0.0 goes through the same marketing process as a regular Heineken beer product. It is as costly. There are different import costs that we have to incur.
“We want to invest in innovation and technology to make availability greater, and that comes at a cost as well.”