Key Drinks Players Target Low- And No-Alcohol Trend
February 3, 2022The low- and no-alcohol segment of the drinks market has been expanding rapidly from a relatively small base.
Historically dominated by non-alcoholic beers, the space is now also being targeted by a growing number of wine and spirits players eager to capitalize on wellness trends.
De-alcoholized wines continue to thrive. The only wine segment to increase faster last year was wine-based cocktails, which contain much less alcohol than typical wine brands. Fre non-alcoholic wine from Trinchero Family Estates has been around for decades and is the market’s biggest seller—it depleted 313,000 9-liter cases last year, up 23.7%, according to Impact Databank. Also accelerating is second-ranked Ariel from J. Lohr Vineyards & Wines, advancing 28.6% last year to nearly 78,000 cases.
De-alcoholized spirits are still much smaller than their beer and wine counterparts, but have been growing at a much faster clip. The world’s largest drinks company has been actively involved in the space as Diageo-backed Distill Ventures acquired majority control of alcohol-free spirit Seedlip in 2019, and also bought into Ritual Beverage Co. two years ago.
More recently, Demeter & Co., led by industry veterans Jim Clerkin and Jeff Menashe, announced its entry into the segment with the U.S. launch of CleanCo, whose gin, vodka, rum, and Tequila alternatives were expected to sell 50,000 cases across the U.K. and U.S. in 2021. And although they represent less than two-tenths of 1% share of the total spirits industry, according to Impact Databank, alcohol-free alternatives will continue to comprise a fast-growing percentage of the overall market into the foreseeable future.
Overall, the de-alcoholized category is still dominated by beer, which owns over 80% of the de-alcoholized drinks segment in dollar terms. In fact, non-alcoholic brews outpaced all other malt-based segments last year, including hard seltzer and other flavored malt beverages. Leading the way is Heineken 0.0, which is the largest-selling non-alcoholic brew in the U.S., according to Impact Databank, followed by Anheuser-Busch InBev’s O’Doul’s and Budweiser Zero.
Looking at the early data from this year, total off-premise sales of non-alcoholic beer, wine, and spirits totaled $13.6 million in the first two weeks of January, a 19% increase from the same timeframe last year, according to Nielsen IQ.—Juan Banaag
| De-Alcoholized Drinks—Off-Premise Trends (Millions of dollars) |
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| Percent Change1 | ||||||
|---|---|---|---|---|---|---|
| Category | 2019 | 2020 | 2021 | 2019-2020 | 2020-2021 | |
| Beer2 | $136.7 | $190.6 | $236.5 | 39.4% | 24.0% | |
| Wine3 | $25.5 | $35.9 | $46.4 | 40.5% | 29.3% | |
| Spirits3 | $0.7 | $2.0 | $3.8 | 194.6% | 93.6%% | |
| Grand Total4 | $162.9 | $228.5 | $286.6 | 40.3% | 25.5% | |
| 1 Based on unrounded data 2 52 weeks ending 12/29/19, 12/27/20 and 12/26/21 in IRI channels 3 52 weeks ending 1/4/20, 1/2/21 and 1/1/22 in Nielsen channels 4 Addition of columns may not agree due to roundingSources: IRI, Nielsen IQ and IMPACT DATABANK © 2022 |
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Tagged : Ariel, CleanCo, Demeter & Co., Diageo, Distill Ventures, Fre, Heineken, J. Lohr, Ritual, Seedlip, Trinchero
