No- and low-alcohol category value in key global markets nears $10bn

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/taiyounomachi
Pic:getty/taiyounomachi

Related tags: NABLAB, alcohol-free

The no and low alcohol category continues to outperform full-alcohol and is increasing its share of the total beverage alcohol market, according to new research from IWSR.

The category has grown from $7.8bn in 2018 to just under $10bn in 2021 across the key focus markets of Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the UK and US.

No- and low-alcohol beer/cider, wine, spirits, and ready-to-drink (RTD) products grew by more than +6% in volume in 10 key global focus markets in 2021, and now command a 3.5% volume share of the industry, according to the No and Low Alcohol Strategic Study published by IWSR Drinks Market Analysis.

Furthermore, the IWSR forecasts that no- and low-alcohol volume will grow by +8% compound annual growth rate (CAGR) between 2021 and 2025, compared to regular alcohol volume growth of +0.7% CAGR during that same period.

“While January has become a popular month for people to cut back or abstain from alcohol, interest in no- and low-alcohol drinks has increasingly become a year-round trend among consumers across the world,”​ says Emily Neill, COO of IWSR Drinks Market Analysis. “To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products, and many established mainstream brands have recently crossed over to develop no/low alcohol versions of their popular beer, wines, and spirits.”

No or low?

In general, non-alcohol products are the driver for the category, with stronger growth rates than no-alcohol products.

Beer/cider is by far the largest no/low category (at 75% volume share), with no-alcohol beer projected to drive growth at more than +11% CAGR over the study’s 2021-2025 forecast period. No-alcohol RTDs and non-alcohol spirits are both expected to post about +14% CAGR volume growth.

In contrast, it is low rather than no alcohol products that are most popular in the wine category: as the taste of low-alcohol wine is perceived by many consumers to be superior to that of non-alcohol wine. Low-alcohol wine is expected to grow almost +20% CAGR 2021-2025, vs. no-alcohol wine projected at +9% CAGR.

Germany dominates the category

Germany tops the no and low alcohol market in volume terms: with the volume of no- and low-alcohol products in Germany more than three times that of the next-largest no/low market, Spain.

Both Germany and Spain clocked volume increases of about +2% in 2021, while the US grew by +31% and the UK by +17%. Total volume of no/low products in Japan registered a small decline (-1%) last year.

However, the UK and the US are two of the most dynamic markets, and are growing at a faster rate than the more mature and established German and Spanish markets. The no/low alcohol segment in the US is forecast to grow by +28% volume CAGR 2021-2025, and the UK’s at +6%.

Who is the No/Low Consumer?

Moderation is the most common use of no/low products, with significant cross-over between no/low and alcohol consumers - and indeed with standard full-strength alcohol products as well.

According to IWSR's research, 43% of adults who have purchased no- and low-alcohol beverages say they are substituting those products in place of full-strength alcohol for certain occasions, rather than abstaining from alcohol overall.

The majority of no/low drinkers also enjoy standard strength alcohol too – only 17% of people report they are drinking no/low to avoid alcohol completely.

The country with the largest proportion of alcohol abstainers is the US, with 23% of no/low drinkers avoiding alcohol completely.

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