How much fizz is left in the ‘no and low’ beer market?
When staring out the window of Pret A Manger off Trafalgar Square recently, nursing a coffee between meetings, I was distracted by a taxi passing by with a bright advertising banner running along its side.
The glitzy campaign was for a new premium non-alcoholic lager called Bero, which included the image of a shiny gold coloured can of beer alongside the face of actor Tom Holland. For starters, I thought he doesn’t look old enough to drink alcohol, so it is definitely best he is aligned with such a product. Secondly, l associate Bero with flour and a range of incredibly popular cook books back in the day, which my mother relied upon religiously. But maybe that’s just me.
The taxi had not only disrupted my coffee break, but also reminded me of Dry January, which I had been trying my best to avoid – along with the associated hype that invariably surrounds it post the Christmas splurges. Now, I’m not a particularly keen film-goer, but when I enquired about Mr Holland to my wife, she was fully clued-up and filled me in. And added that maybe he is the person who can really sell non-alcoholic beer to the masses.
He is certainly yet another name in a long line of celebrities associated with the beer, wine and spirits (BWS) category, but he has more of a challenge on his hands than Kylie, Clooney and the rest of the Hollywood drinks promoters. He is targeting a product area where sales remain very low and challenging. Yes, we are seeing some growth, but the absolute numbers remain tiny.
Evidence comes from YouGov and CACI, which supplied me with figures for early December. Although the penetration of non-alcoholic beer grew by 14%, this only meant the category moved up from 0.58% of the population drinking it in 2024 versus 0.51% in 2023. CACI suggested this puts us in the realms of “margin for error”, and if we go back to 2022, the share was 0.52%, so all we can read into these stats is that the sector is as flat as a poorly conditioned pint of beer.
According to IWSR, no-alcohol beer and cider has grown to account for around 2% of total beverage alcohol market sales in the UK, and it finds the older Generation X and Boomer groupings are driving this demand as they address their booze-addled heady days of youth. Where IWSR is, surprisingly, finding less resonance is with trendsetting younger audiences. It also suggested: “The category has witnessed a boom in popularity in recent years, but sales are expected to flat-line in the longer term.”
In contrast, the CACI data found the 18 to 24-year-old grouping was, in fact, the largest consumers of non-alcoholic beer, although it involved only 2% of them. It also has to be noted that these youngsters have embraced all types of non-alcoholic alternatives. They over-index on everything, from carbonated drinks to smoothies. So let’s be clear, it’s not that they have all turned to non-alcoholic beer as a substitute and are going to fuel its future growth.
Against this backdrop, we continue to be deluged by surveys on abstinence, stats on online searches for non-alcoholic drinks, and research on wellness trends such as zebra-striping. We are also awash with the marketing campaigns of existing and new non-alcoholic beers and other such BWS products. Welcome to the ever-expanding party, Mr Holland. We’ve been expecting you.
This is undoubtedly good news for media outlets – newspapers, magazines, London Underground, TV and research houses are all cashing in – but what is it doing for the funding and profits and losses of these brands? It would be interesting to see what percentage of revenues they are spending on marketing and promotional activity. Judging by the stats from the likes of CACI and IWSC, some over-exposed brands must be in precarious financial positions.
As brands continue to pay a high price to buy sales, it will become increasingly cutthroat in the non-alcoholic market. To date, there has been talk among some in the industry that they have been happy to see their advertising help grow the overall non-alcoholic category. The rising-tide-lifting-all-boats theory.
That thinking is likely to dissipate rapidly as we increasingly move into winner-takes-all territory, where a few brands – invariably from the major brewers – control what is ultimately not that big a category. Despite all the hype, surveys and advertising thrown at the wall, I’d argue that not that much is sticking.
And next time you hear about the youngsters driving the non-alcoholic trends and the wellness agenda, let’s also consider that the 18 to 34-year-old grouping is also the chief driver of the growth in Guinness sales, so it is no doubt also over-indexing on stout.
Glynn Davis, editor of Beer Insider
This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Beer Insider would like to thank Propel for allowing the reproduction of this column.