Whilst high profile launches like Heineken 0.0% and Becks Blue have underlined a clear intent by the major breweries to explore the NABLAB market, micro-breweries are also making in-roads into the space with craft alternatives.
“There have always been some low alcohol and a few zero alcohol brands available, such as Becks Blue, but the craft sector is growing. However, what we are seeing is that very few of the new launches are actually alcohol-free; most still contain 0.5% alcohol,” Steve Magnall, CEO at St Peter’s, told BeverageDaily.
In a bid to plug this gap, in August 2016, the Suffolk brewery introduced Without Original, followed by its second zero alcohol craft beer, Without Gold, in July.
It doesn’t have the heavyweight marketing clout of multinational brewers, but the size disadvantage isn’t deterring the micro-brewery from taking up the gauntlet.
“Our products are completely different. Many alcohol-free lagers are actually de-alcoholized meaning that they are brewed using alcohol and then the alcohol is removed. This usually results in a thin and watery drink,” said Magnall.
He said that Without Original and Without Gold were brewed in exactly the same way as a normal beer, just without alcohol.
“This results in a full bodied beer with a good head and rich flavor. Quality is the key to staying ahead in this market, as well as innovating,” he added.
The brewery has already convinced the UK multiples with its alcohol free beers. Without Original is now sold in Tesco, Nisa, The Co-op and Wholefoods; Without Gold launches in 300 Morrisons stores next month and St Peter’s has secured export deals in Spain, Finland, Germany, Denmark, France and the USA.
Its target market is broad, taking in “people who are looking to cut down on their units and be more healthy and mindful about their drinking, millennials who make up a big proportion of tee-totallers, designated drivers who still want to enjoy a decent pint and those who can’t drink for whatever reason but still fancy a beer”.
And according to Magnall, these consumer groups have driven a 50% surge in sales of alcohol-free drinks in the last five years.
“It is a growing market, driven by health concerns, young people who don’t drink, those cutting down and tightening of drink driving laws,” he said.
“Tesco was quick to respond to the demand for alcohol-free drinks and created dedicated sections in its stores nationwide in March, whilst the other supermarkets are looking to extend their ranges and offer a more diverse selection.”
With retailers switched on to the alcohol-free drinks opportunity, Magnall said he expected this sector to grow to 10% of the overall drinks market in the next ten years.
“We also expect retailers to give more space to alcohol-free drinks and for pubs to offer a greater range of choice to consumers. The recent Mindful Drinking Festival proved there is a clear interest, so growth is inevitable and quality will be key to determining whether a product retains a place on the shelves.”
By the same token, Magnall said he believed taste has been the main barrier to the development of the category, admitting “it is hard to develop alcohol-free beers that truly live up to a real pint”.
“Breweries need to be dedicated to this sector of the industry in order to create quality products that appeal to hard-to-please consumers,” he said.