Low & no alcohol categories show resilience against COVID-19 alcohol declines

By Rachel Arthur

- Last updated on GMT


Related tags IWSR NABLAB

While global beer volumes are expected to decline around 9% this year, low & no alcohol beer volumes are forecast to remain stable: edging up 0.1%.

In fact, low and no alcohol beer is predicted to remain resilient through 2024, with IWSR forecasting volume CAGR growth of 5.9% (2019-2024).

Total global beverage alcohol is expected to see an 8% decline in 2020 as a result of the pandemic. But against this backdrop, IWSR currently expects to see the low and no alcohol categories remain relatively stable.

Biggest growing low/no beer markets 

IWSR’s analysis has looked at 19 key markets, which together represent around 75% of global beverage alcohol volumes and thus help act as an indicator for the overall industry.

These 19 markets are the UK, the US, Australia, Brazil, Canada, China, Colombia, France, Germany, India, Italy, Japan, Mexico, Poland, Russia, South Africa, Spain, Thailand, Turkey, and the global travel retail channel.

Out of these, the largest no and low alcohol beer markets in 2019 were Germany, Spain, the US, Japan and Poland.

Meanwhile, Poland, Spain and Germany are likely to see the biggest growth in share of low and no beer - compared to total beer growth – in the coming years through to 2024.

Non alcohol spirits volumes have been harder hit by on-premise closures: given that this channel is vital for growing awareness of the category with consumers. However, volumes are currently expected to decrease at a relatively moderate 1% this year, according to IWSR, although could be vulnerable to further lockdowns and restrictions.

Interest in the no and low alcohol categories is driven by three key consumer trends. Firstly, consumers are reducing the amount of alcohol they consume: either in the number of occasions they consume alcohol in; or in the volume of alcohol they drink in total.

Meanwhile, they are also looking to swap out alcohol products for dedicated alternatives – such as low or no alcohol counterparts to flagship brands – for the alcohol occasion.

And consumers also have their eyes on non-alcoholic products that have the potential to replace the alcohol occasion: such as more sophisticated soft drinks; or drinks with a different flavour profile or wellness proposition such as kombucha.

RTDs and ecommerce gather momentum

While an 8% decline for the global beverage alcohol category​ may sound bleak, it’s a much better picture than the double-digit losses projected for the industy earlier this year.

And IWSR’s analysis points to another bright spot: RTD alcohol. This category is forecast to see impressive volume growth of 43% in 2020.  Its success is largely being driven by strong performance in the US, which is the largest RTD market in the world by volume.

"Global consumers have shown a propensity for refreshing, flavourful and longer-to-consume drinks, which bodes well for RTDs,"​ notes IWSR.

"The category is also well suited to the off-premise, which further boosted its popularity during lockdowns. RTDs are expected to post volume gains of 21.8% CAGR 2019-2024, stealing share primarily from the beer category." 

Another clear winner of 2020, according to IWSR, is ecommerce. The value of ecommerce in 10 core countries (Australia, Brazil, China, France, Germany, Italy, Japan, Spain, UK, US) is forecast to grow by more than 40% in 2020, to reach $17bn, with further growth expected to boost the category to $40bn by 2024.

Related topics Markets Beer & cider COVID-19

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