The “Low And No” Trend: Momentum Continues For De-Alcoholized DrinksFebruary 7, 2023
While total beverage alcohol volumes fell slightly last year, according to Impact Databank, the de-alcoholized segment of the U.S. drinks market continues to expand rapidly, albeit from a relatively small base. Health and wellness concerns have driven low- and no-alcohol alternatives to increased popularity, especially among Millennials and Gen Z drinkers attracted not by necessity, but by the lifestyle.
Once dominated by non-alcoholic brews, the space is now also being targeted by a growing number of wine and spirits players eager to capitalize on wellness trends. Even with tough comps against the prior year, alcohol-free beverages’ momentum did not wane in 2022, as total dollars for de-alcoholized spirits are still nearly five times what they were just two years prior.
Diageo is the largest player in the no-alcohol spirits space, led by Seedlip ($32 a 750-ml. bottle), which is the largest-seller among de-alcoholized spirits in the U.S. market, according to Impact Databank. Additionally, Diageo-backed Distill Ventures counts Ritual Zero Proof in its zero-alcohol portfolio. Another player to watch in the space is CleanCo, from Jim Clerkin and Jeff Menashe’s Demeter & Co.
Non-alcoholic brews outpaced seltzers and other malt-based segments last year, led by Heineken 0.0, which is running a $7 million, 30-second spot during the upcoming Super Bowl broadcast. Heineken 0.0 is the largest-selling non-alcoholic beer in the U.S., according to Impact Databank, followed by Anheuser-Busch’s Budweiser Zero and O’Doul’s.
While low-proof, wine-based cocktails continue to thrive, de-alcoholized wines are the next fastest-growing sector of the wine market. Trinchero’s Fre non-alcoholic wine has been around for decades and is the category’s biggest seller, depleting 344,000 9-liter cases last year on 10% growth, according to Impact Databank, while second-ranked Ariel from J. Lohr Vineyards & Wines surpassed 80,000 cases in 2022. Among the fastest-growing non-alcoholic labels is New Zealand’s Giesen 0%, which reached 50,000 cases last year, up from just 12,000 cases in 2021. And Riboli Family Wines is targeting 75,000 cases for its non-alcoholic Naturals Collection this year.
De-alcoholized beverages also represent premiumization opportunities for drinks marketers. In NielsenIQ channels, non-alcoholic spirits were priced at an average of $24.35 per 750-ml. in 2022, compared to an average of $15.76 per bottle for all spirits with alcohol. And although they currently represent less than half-a-percent share of total beverage alcohol dollars, according to Impact Databank, alcohol-free alternatives will continue to comprise a fast-growing percentage of the overall drinks market into the foreseeable future.—Juan Banaag
|De-Alcoholized Drinks—Off-Premise Trends by Type
(millions of dollars)
|* Based on unrounded data
Sources: Nielsen IQ and IMPACT DATABANK © 2023
Tagged : Budweiser, Giesen, Heineken, J. Lorh, O'Doul's, Riboli Family Wines
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