From beer to wine, alcoholic drink producers are now focusing on a growing consumer trend – the shift in consumption for ‘zero alcohol’ drink.
Australia’s wine producer, Australian Vintage, has recently disclosed that its McGuigan Zero range of 4 wines now made up 10% of its total sales for the entire McGuigan wine portfolio. According to the company’s Chief Executive, Craig Garvin, “COVID-19 has triggered a fundamental shift in many people’s approach to health and fitness, and they had shifted to lower alcohol or zero-alcohol products. They have become more sensible with lifestyle choices.”
McGuigan Zero has made most of its gains in the Australian market but Garvin said it had also taken off in the UK, where large displays are devoted to no-alcohol products in the beverages sector. Garvin is confident of achieving sales of up to 300,000 cases of McGuigan Zero within the next 12 months. The company is also planning to expand its market further into other Asian countries like Singapore, Malaysia and Vietnam.
The idea behind ‘zero alcohol’ drink was pioneered by Heineken, which had transformed the sector and made such products mainstream. Heineken is the world’s 2nd largest brewer, and recently it has announced a new marketing strategy to look at beer beyond the ‘male stereotype’.
Dolf van den Brink, the new Chief Executive of Heineken, said the company will bolster marketing behind low-alcohol or alcohol-free beers, cider and flavored, so-called ‘hard seltzers’, to attract younger women and consumers.
The company, which manufactures brands such as Tiger, Amstel and Moretti, has already devoted a quarter of its Heineken beer marketing budget to the alcohol-free 0.0 brand, although it makes up less than a quarter of its sales. Van den Brink believes the 0.0 brand could occupy 5% of the global beer market within 5-6 years. He said, “We are only in the early stages of 0.0. We believe it could be an important driver of growth in the future. Consumers want options with alcoholic drink in a bar and lesser alcohol during a working week, and then a 0.0 drink during lunch hours.”
Since its launch in 2017, Heineken 0.0 has become the most important brand of non-alcoholic beer globally. Drinking beer, however, is ‘underdeveloped’ among women and younger consumers, he said, but Heineken could win them over ‘by being creative and innovative’. The beer industry has overlooked the fact that nearly half the world’s population did not really like drinking beer. This is a huge market to contemplate upon.
The pandemic has also led to decrease in beer consumption by 10% in 2020, as such the strategic shift towards zero or lower alcoholic drink has become a necessity for many players in the market. Consumers spend more time drinking at home or during work breaks, then at bars or restaurants. The pandemic has also resulted in growing demand for preparing cocktail drinks at home particularly among women.
Meanwhile, another beer producer, Carlsberg is hoping to entice its Chinese consumers with its ‘zero alcohol’ beers. The company’s CEO Cees ‘t Hart said the company is rolling out an alcohol-free beer in China for the first time. The launch of Chongqing Beer’s AFB comes against a backdrop of growing alcohol-free sales for Carlsberg around the world. This category saw volumes up by 11% and represented one of the few growth areas for Carlsberg.
Major brewers around the world saw a boost in demand for ‘alcohol-free’ beers during the lockdown, unfortunately distribution has been limited to developed markets. Carlsberg is expanding its market for alcohol-free beer in Asia with the release of Carlsberg Alcohol Free in Singapore and Hong Kong.
GlobalData consumer analyst Ryan Whittaker said alcohol-free beers won over consumers in last year’s lockdowns. Whittaker concluded, “[Carlsberg] should capitalise on this growth as the ongoing pandemic and lockdown is precisely the kind of situation in which these drink-at-home, no- and low-alcohol brands can flourish.”