Before COVID-19 struck, there had already been an explosion of new drinks on the market with little or no alcohol. Whether non-alcoholic soft drinks with sophisticated flavours, mocktails or other alternatives to traditional spirits, there is a huge amount of innovation in this category. Quality has also improved, spurred on by a sense of adventure, experimentation, wellness and lifestyle changes. Producers are keen to take their position at the premium end of the sector. Consumers are no longer faced with a dearth of decent options.
Coronavirus has changed our lives and our drinking habits - see my article earlier this year on The Impact of Lockdown on Beer Enthusiasts. So when we are over this pandemic 🤞, what can we expect to see from the world of 'low and no'? Let's imagine a world where we can all go down the pub again and enjoy a drink with a crowd of friends …
In March 2020 at the Hotel, Restaurant and Catering Show (HRC), Blake Gladman, Strategy and Insight Director of research consultancy KAM Media, gave a talk on the rise of the 'low and no' alcohol category.
The previous December, KAM Media had spoken to 1000 consumers about their behaviours around these drinks. Questions tackled assumptions and perceptions about the category, where people buy from, awareness of ranges and barriers to purchasing. At the HRC, Blake presented highlights of KAM Media's extensive research.
A year later, with more people drinking at home and the coronavirus pandemic continuing, the results of this survey nevertheless remain hugely significant, both for the retail market and the hospitality industry struggling to survive, let alone grow.
One in five consumers in the UK are teetotal, rising to two in five for the 18-24-year-old bracket. This latter group represents "the generation Z who are much more aware of moderation and so more likely to abstain from alcohol", said Blake. "It will be interesting to see how this movement looks in 10 years' time", he added. "Once those 18-24-year-olds become the 35-year-olds and we see that new generation coming through, will we see the same or increases in those behaviours?"
Drynks Unlimited showed some of their non-alcoholic Smashed beers and ciders at the HRC
22% polled in January said that they had tried 'low and no' as a category, while in July, the figure had risen to 38%.
Drinking behaviour in the UK is trending towards greater moderation, according to KAM Media. Over one in three people have attempted 'Dry January' or said they would be attempting 'Go Sober' October in 2020.
The research showed that 62% of UK adults claim to consume a maximum of five units of alcohol on average each week. Additionally, 40% of alcohol drinkers said they would be reducing their consumption in 2020, 47% of those for health reasons. At the time, Blake was keen to stress that these were 'claims'. "There's an element of people underestimating how much they consume or knowing that they consume too much. They may be deliberately under-egging the amount of alcohol. Perhaps at a subconscious level, there's a recognition that people need to reduce their alcohol intake or would like to be able to do this."
KAM Media's figures show that 329 million adult pub visits in 2019 did not include an alcoholic drink. Although lockdown and other social restrictions have resulted in more people drinking at home, only time will tell whether this will lead to a long-term increase in alcohol consumption. However, as the report mentioned earlier concluded, beer enthusiasts drank lower quantities overall. So, there's nothing to support any notion that we Brits just boozed our way through lockdown and further social restrictions.
Crucial to understanding these findings is determining consumer motivations for greater moderation of alcohol. These fit into several categories, of which the top two are 'general health concerns' and 'saving money'. However, for those looking to switch to 'low and no' products, spending less isn't always the case, as described later in this article. Other reasons include losing weight and the desire not to lose out on opportunities to do alternative activities.
At the HRC, Wild Life Botanicals showed their 'Bubbles with Benefits', high-quality 0.5% ABV alternatives to sparkling wine
Blake sees much in common between the rise of the 'low and no' category and that of veganism/vegetarianism. "We now see these meals front and centre on menus, not hidden away at the back. It's the same for 'low and no'. The category shouldn't be an afterthought at the back of a menu! With social changes, it's now come more to the forefront. People are switching to eating less meat or drinking less alcohol. However, a larger proportion of people are looking to flex how they do it. We see the rise in 'flexitarianism' and perhaps something similar in alcohol. There's a similar mindset in terms of moderation if people are looking to flex when and where they drink alcohol. Other times, they automatically would have thought about having an alcoholic drink. Now there are greater options, so potentially they can make a better choice."
So, it's not just about switching off alcohol completely. It's about alternating between drinking 'low and no' and alcoholic drinks as a way to reduce alcohol consumption on a night out. In the original survey, approximately one in six consumers said they were looking to mix between the two categories, with 22% of 18-34-year-olds showing the greatest tendency.
Once pubs, bars and restaurants can safely reopen as before, the challenge will be to ensure that whether the customer chooses a 'low and no' or traditional alcoholic drink, the experience and service they receive are exactly the same. For Blake, this is key, "whether it's in the taste profile of the drink, how it's served or everything else that comes with it."
Brewdog has taken this concept one step further by opening the world's first alcohol-free bar in London. With over ten beers on draught of 0.5% ABV or under plus bottles and cans, the experience and atmosphere resemble a regular Brewdog bar. "It's everything you'd expect from a pub experience", described Blake. "People who drink low or no alcohol beer want to go to a pub and not have a different experience".
There is unsurprisingly more awareness about 'low and no' options within beer than other drinks categories, amounting to two-thirds of consumers polled. In contrast, less than one in two were aware of these choices in either wine or cocktails. So, the onus is on operators to drive that awareness, believes Blake. This can be via menus, through advertising or displayed in more prominent positions in retail environments and pubs.
Encouragingly, newspaper supplements have begun to include recommendations on a more regular basis. Also, supermarket ranges are growing, sometimes with whole aisles dedicated to 'low and no' options. However in pubs, only one in four people have noticed 'low and no' brands. Often, these drinks are hidden at the bottom of a packed fridge, so customers may only find one if they specifically ask for it. More awareness and product visibility would surely see an increase in sales of these products, particularly at the premium end of the category.
Although the pandemic has skewed our opportunities to visit pubs and restaurants, KAM Media's findings are highly relevant for future business strategy.
Roughly one in four pub visits and one in three restaurant visits are non-alcoholic. Together with the statistics showing that one in five people are teetotal, this shows that consumers are flexing their approach much more. Many of these visits, Blake explained, could be work-related or simply a lifestyle choice at the time. This highlights the size of the market and the potential opportunities to increase consumer spend on more premium 'low and no' alcoholic brands rather than the traditional better-known ones.
The research shows that 45% people would look at the menu when deciding on a non-alcoholic drink. Around one in three will have their usual drink, while approximately one in five will look behind the bar and a further one in five will ask staff. Therefore, it is clear that hiding choices on a menu or at the bottom of a fridge limits options for consumers.
There is also a big opportunity to increase the knowledge of staff. They can then offer alternative choices to the usual soft drinks, talk about the flavour profiles and inspire customers to try something new.
Perhaps the biggest challenge in 'low and no' for the industry will be overcoming consumer pre-conceptions. Out of all the reasons identified, 33% of people believe that the drinks don't taste the same as their alcoholic equivalents. Therefore, they would rather choose something different, probably a regular soft drink. Also, almost one in five people wouldn't switch to the category because they like the taste of alcohol.
However, one of the most important factors affecting consumer uptake of these drinks is the pricing. There's a perception that alcohol content is a significant driver towards the cost of a drink. Two in three people polled expect low and non-alcoholic drinks to be less expensive than their alcoholic equivalents. The research also shows that on average, customers expect 'low and no' drinks to be 20% cheaper and one in five expect them to be more than 25% cheaper.
No1 Botanicals showed their range of premium waters, made with fresh botanical extracts, at the HRC
Over one in five customers would be prepared to pay more for a low/no-alcohol version of their favourite alcoholic drink. In contrast, over one in three people would be willing to pay more for an 'adult' soft drink like Kombucha, compared to traditional soft drinks such as lemonade.
Currently, there are greater opportunities for premium soft drinks brands. The use of natural ingredients and premium packaging make them look as if they should be more expensive. So how can the 'low and no' category win over new consumers, given the perception that alcohol is the main driver dictating the price of these products? Perhaps lessons can be learned from Brewdog. At their new AF bar, the price of their beers is what you'd expect to pay for a regular beer at a pub. This highlights further the benefit of making customer experience the same, whether it's an alcoholic or low/no-alcohol drink being served.
After being the second biggest selling alcohol-free lager on Amazon during lockdown, Lucky Saint became the first independent alcohol-free lager to be served on draught throughout the UK
"The pub is, above all else a social space. The rise of 'low and no' is being embraced by publicans who see the diversification of range as a positive."
KAM Media spoke to 200 publicans about their views on the category. One in two have seen an increase in purchases. As a result, 66% increased their range in 2019 and a further 48% said they would be increasing their range in 2020. However, while 57% of publicans want to sell more 'low and no', 69% of them would like to see increased support from brands. Also, 61% would like to see more support from their pub company. Therefore, publicans are looking for inspiration and knowledge on which products they should be selling, how these should be served and how best to charge a premium price.
The hospitality industry has suffered particularly badly during the COVID-19 crisis and continues to do so. However, this research shows that the 'low and no' category does have a positive impact for the sector. Pubs, who have historically been built on alcoholic offerings, see diversification of that range as a crucial element for keeping the industry alive. As Blake says: "Hospitality is built on atmosphere and diversification, not just on alcohol. The pub is, above all else, a social space." Let's all hope it can continue to be so.
The 'low and no' movement is still relatively young. Despite the coronavirus pandemic, the future does at least suggest an upsurge in new products and companies dedicated to producing new premium brands. Since the original analysis, KAM Media describes continuing growth in the low and no alcohol category. Sales are reported to be up 30% in the off trade (Nielsen) and up by nearly 50% in the on trade (CGA).
Perhaps COVID really has encouraged many drinkers to become more health conscious, cutting down on sugar and alcohol in particular. Additionally, a new generation of more discerning drinkers, particularly among 18-24 year olds, is looking for quality, flavour and lower alcohol. On-trade venues have already been adapting with a better range of options and bartenders look set to embrace 'low and no' cocktails as a core part of their offerings. Similarly, consumers drinking at home want more choice with easy availability for purchases. These can be online, at supermarkets and specialist stores or direct from the producer.
In this new world, perhaps one thing is certain. We should all be able to look forward to a better choice of drinks, whether alcoholic or low/no alcohol, wherever and whenever we can safely go.