Challenging the definition of beer? The growth of NABLAB

By Rachel Arthur contact

- Last updated on GMT

Pic:iStock
Pic:iStock
The non-alcoholic beer and low-alcohol beer sector (NABLAB) is growing against a background of stagnant beer volumes. Can innovation in this sector disrupt the entire beer industry and challenge the way we think about beer?

Beer – in the minds of most consumers at least – is an alcoholic drink, perhaps most commonly consumed after work or during the evening, at a bar, a BBQ, or at home.

But industry experts believe that NABLAB has the potential to open the beer category up to new consumers and new occasions, and provide a product that appeals to today’s health conscious consumers.

Setting the scene

The way people consume alcohol is changing.

Speaking at the International Beer Strategies conference in Barcelona last week, Mete Yurtsever, marketing director of Efes Vitanta Moldova Brewery, noted that neither of today’s key consumer groups – baby boomers and millennials – are as interested in high ABV drinks as they used to be.

Baby boomers – once on the look-out for drinks with a high ABV punch, are now looking to enjoy a quiet drink at home or after work. Millennials – the consumer holy grail for today’s brands – are interested in quality over quantity, seeking out craft options or premium products.

Meanwhile, across the generations, consumers are becoming increasingly health conscious. They’re well-versed in responsible drinking, and likely to be counting their calorie consumption.

Research from GlobalData shows that 59% of drinkers worldwide ensure they do not drink too much alcohol in general; while half are concerned about the long-term health impact of drinking too much alcohol.

In the US & UK, 78% of millennials self-limit how much they drink on a night out. Only 4% say that alcohol strength is an important factor in purchasing their drinks.

There are also other reasons that people turn to non-alcoholic beers: those who are drivers, those who are pregnant, or those who abstain from drinking due to religious beliefs.

Of course, this is not to say that people just don’t want alcohol any more. But it does show why a number of consumers are not as interested in a high ABV as they might have been before.

Beer: Challenging a definition?

Definitions evolve: and this could be seen with our concept of ‘beer’, observed Natalia Singaevskaya, NABLAB Innovation & Insights Manager, Europe & Middle East, for AB InBev, also speaking at the event in Barcelona.

Not very long ago a telephone was defined as an apparatus for sound communication. Today, our concept of a phone has evolved to a device that takes photos, organizes our schedule, searches the internet, and more.

In the same way, the concept of beer as an alcoholic drink can be challenged and changed, says Singaevskaya.

“The no and low alcohol beer is going to disrupt the beer category – and that will be the biggest shift in beer in the last 600 years,”​ she said.

AB InBev has pledged that NABLAB beers will represent 20% of its global beer volumes by 2025 (NAB being products with an ABV of 0.0%-0.5% and LAB being those with an ABV of under 3.5%).

The beer giant sees more consumers looking for alternatives to traditional beers, that are light, refreshing, and in-sync with active lifestyles, adding that the NABLAB category is likely to ‘grow significantly’ in the next decade.

Why does AB InBev has its eyes so firmly on the NABLAB category? Singaevskaya, too, notes changes in consumer behavior: more interest in better-for-you products and health and wellness. Meanwhile, people are developing new tastes as innovation in the beer market continues.

Important markets such as Brazil, Argentina, Mexico and China have high numbers of people who abstain from alcohol, meaning there is a massive consumer group that beer does not reach at the moment.

Non-alcoholic beers: some examples

brewdog nanny state

Brahma 0.0% (AB InBev): top non-alcoholic beer in Brazil with 70% market share

Budweiser Prohibition (AB InBev): Launched in Canada in 2016; three more markets to follow in 2017

Corona Cero (AB InBev): Launched in Mexico in 2016

Heineken 0.0%: Launching in 13 European markets and Russia this year

BrewDog Nanny State: an alcohol-free hoppy ale 

Beck's Blue (AB InBev): alcohol free lager, 53 calories per bottle

And don’t forget that beer volumes have been struggling, as have those across other alcoholic beverages. Overall alcohol volumes are up just 0.7% (CAGR 2010-2015). Meanwhile, non-alcoholic beverages are up 3.3% over the same period.

These are some pretty good reasons to start looking seriously at NABLAB.

Positive messages

NABLAB beers have come with plenty of challenges. For a long time, the taste of non-alcoholic beers just didn’t live up to their alcoholic counterparts.

It’s no surprise, then, that such beers became perceived as something of a ‘lesser’ beer: a product that was a last resort because you couldn’t​ drink alcohol, not because you wanted ​to choose a non-alcoholic beer.

Thanks to increased innovation in the category, this is changing, and brewers believe they are conquering the taste issue.

Meanwhile, brands are creating a positive message around NABLAB beers. Take for example AB InBev’s advertising for Brahma 0.0%, which has focused on the wider consumption occasions for a NAB beer and a positive message on NAB beers by emphasizing what you can​ still do after drinking – the ability to still drive after consumption, for example, or take part in a high-powered board meeting.

Meanwhile, Heineken is this week celebrating the launch of its Heineken 0.0 beer, emphasising a calorie content of 69 calories per 33cl bottle. Similarly, the marketing for this beer is based on its inclusiveness with the tagline ‘Open to all’: highlighting ‘the inclusiveness of Heineken 0.0 to all people, moments and drinking occasions, which might call for a beer but not alcohol’​. 

A fledgling category

For the time being, however, remember that NABLAB only accounts for a very small part of the global beer market: NAB accounting for some 0.6% of beer consumption and LAB accounting for some 2.2%.

However, in a market where volume growth is a struggle, it is the growth potential for NABLAB that make this category so attractive to brewers.  

The key issues will be to continue to portray NABLAB beers as a positive choice, helping grow acceptance of the category as a mainstream option.

In an age where beverage categories are blurring and craft continues to resonate with consumers, it’s obvious that drinkers are willing to explore new products, innovations and ideas. This, surely, makes it the perfect time to challenge the beer status quo. 

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