For many people, much of 2020 until at least part of 2021 has been a time of unusually high stress levels and unique work dynamics. That is, if you were one of the lucky ones to keep your job. For many of us, including the team at Tematica Research, this stress resulted in coping behaviors that weren’t exactly the healthiest. The waistline has widened and the workload on the liver has increased. As the weather warmed in the spring and hope grew that life might return to normal, many of us realized that these pandemic coping behaviors needed to be addressed – enter the world on the low or alcohol-free wine, beer, cocktails and spirits.
The New World of Adult Drinks
To be clear, we’re not talking about those overly sweet mocktails that are more of a dessert than a drink, better suited to the little ones at the table, and usually served in a movie-like way, Fail to Launch. We’re talking about legitimately unique flavors that can be sipped on their own or used to create a true cocktail experience that lacks nothing but the potential for intoxication. According to a survey by Kisaco Research, the reasons cited by respondents for consuming these types of drinks are: “To avoid the effects of alcohol consumption” at 41%, followed by “I like the taste” (39% ), “To reduce my alcohol consumption” (37%) and “As a healthy lifestyle choice” (30%). It’s not just an American thing either. This page lists over 100 different non-alcoholic spirits companies from around the world including UK, Sweden, Italy, Denmark, Ireland, South Africa, Canada, Australia, Slovenia , in Estonia and in France.
Similar to how companies are repositioning their businesses to leverage Tematica Research’s Cleaner Living investment theme, big liquors are paying attention. Diageo SA (DEO), the global beverage giant, was the sole investor when Distill Ventures launched in 2013. The company promotes itself as the “world’s leading independent beverage accelerator… We are looking for ambitious founders with major alcoholic and non-alcoholic beverage brands who want to take their business to the next level and be successful both in their home market and globally.
The company’s portfolio includes Ritual Zero Proof, which we can attest to as the alternative to gin does not disappoint. One of his first investments was Balthazar vermouth, which was bought by Diageo outside of the program. Diageo also acquired a controlling stake in Seedlip, which was its first acquisition of a non-alcoholic brand.
Dominant global beer brewers are fighting back after losing market share to hard seltz (which have doubled their sales in the United States every year since 2016) and craft beers (which now account for 12% of the market), such as companies like Anheuser-Busch InBev SA (BUD) and Heineken SA (HEINY) invested heavily in better tasting non-alcoholic beers. Heineken’s 0.0, which launched in 2019, we can confirm, really tastes like Heineken, and last year Anheuser-Busch released an alcohol-free version of Budweiser. The Italian beer brand Peroni Nastro Azzurro, owned by Asahi Group Holdings LTD (ASBRF), just added their latest offer on the market with Nastro Azzurro Zero, which, with zero alcohol, is to the desired taste, just like Peroni Nastro Azzuro. We challenge you to try to read this sentence aloud quickly. It’s the second in the company’s lineup after its Libera line, which includes options like Bella Bionda and Daisy Duke, an American lager, obviously.
While sales of non-alcoholic beer fell 4.6% in 2020 to a total of $ 11.6 billion after an average annual growth of 9% over the previous four years (according to data from Euromonitor International) , they should be back on track in 2021. The market remains a relatively untapped opportunity with zero alcohol market share standing at a tiny 0.5% compared to Europe, which is responsible for nearly 75% of all alcohol-free beers consumed, according to insightSLICE data. In Japan, almost 5% of the beer sold is alcohol-free and in Spain this figure can reach 13%. IWSR Beverage Market Analysis predicts that U.S. non-alcoholic beer volumes will almost triple in the five years to 2025, exceeding the expected 60% volume growth globally. Heineken CEO Dolf van den Brink estimates that alcohol-free beer could grow from 2% of the global beer market to 5% in the coming years.
A Google (GOOG) a search for the term “alcohol-free spirits” yields nearly 200 million results. We were also quite astonished by this, but it indicates the growing trend of “sober curious”. It turns out that a lot of what we’ve seen in the dairy substitutes industry is also happening when it comes to adult drinks. Unofficially, the low-consumption spirits industry began in 2014 when Ben Branson (not linked to Richard Branson of Virgin Fame) started Seedlip. The NA spirits industry, according to IWSR Beverage Market Analysis, saw US sales volume increase at a compound annual growth rate (CAGR) of 289% between 2016 and 2020, with 2020 alone having saw the volume increase by 79%. IWSR predicts a 12.6% CAGR from 2021 to 2025. For those still not convinced that this is a growing industry, perhaps attend the annual Lo & No Beverage summit or conference annual on the soft drink strategy and go for the taste tests.
Unlike their ancestors, the new generation of low-alcohol or non-alcoholic adult drinks are not for those who reluctantly avoid the impact of a drunken night, but rather are drinks that offer complexity. taste and many psychological pleasures associated with a traditional cocktail and some are even aimed at delivering health benefits – what’s not to love? One of our team, Lenore Hawkins, says the Spirit of Bourbon from Free Spirits offers a spectacular initial taste and a spicy finish that warms the throat, reminiscent of the lovely burn one would get from his Irish whiskey. beloved on the rocks.
As a new post-Covid world takes shape, there is a growing appreciation and increasing attention to physical and mental health. This goal encourages the creation of a wide range of new products and services that can provide many of the pleasures associated with what is less than good for you in a way that, at the very least, is not harmful and at best. may even be beneficial. Now it’s a world reinvented.
PS – For those who would like to try an alternative cocktail, our team mixologist Lenore Hawkins suggests the following:
Place the cucumber slices at the bottom of your favorite tall cocktail glass. Confuse them just a little. Add ice. Add the lemon juice, gin (ish) and bitters, then slowly add the tonic water and stir gently. If you’re feeling particularly ambitious, add a source of mint. Now enjoy it as much as you want without any guilt and have a great weekend.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.