The state of the no- and low-alcohol (NOLO) market has been a popular topic in recent years, with an increasing number of consumers choosing to moderate their consumption, and quality improving across the category.

While sober consumers do make up a portion of the NOLO market, the target demographic is not exclusively sober. In fact, 41 per cent of NOLO consumers switch between NOLO drinks and full-strength depending on the occasion, according to the IWSR. Many consumers make the switch for health reasons, or to avoid undesirable effects of alcohol.

Recently, Giesen commissioned a study with YouGov which found that 96 per cent of Australians identify their wellness goals as important, and 45 per cent believe that moderation is important. In addition, over half of Australian drinkers plan to avoid alcohol, with that number increasing to 70 per cent among millennials.

Giesen’s Marketing Manager, Angela Flynn, explained how these findings influenced Giesen’s consumer program.

“From the campaigns we have activated in Australia for our Giesen 0%, we have determined that our primary consumers are regular wine drinkers across a wide demographic, skewed towards older millennials; regular wine drinkers who are looking to moderate their overall alcohol intake in order to achieve their health and wellness goals. This can be anything from drinking no alcohol mid-week and then full-strength on the weekends, or they have a busy weekend planned but still want to socialise and enjoy the taste of a wine, just without the effects of alcohol,” she said.

While NOLO category recruitment is primarily present among legal drinking age Gen Z consumers, Australian Vintage Head of Category: Insights and Brand, Emily Harper, outlined the appeal for older markets.

“Mature drinkers want to cut down often for health and calorie-control reasons, while health-focused younger customers want wine that tastes and looks like wine, without the negative side effects,” she said.

Increasing quality

The NOLO market is maturing, with most consumers having interacted with the category for at least a year. With this maturity comes a demand for more diverse and higher quality products. NOLO products have previously been considered as the poor cousin of traditional alcoholic beverages, but Rich Watkins, Co-Founder and Head Brewer of BentSpoke, explained that this perception has changed in recent years.

“The shift to non-alc used to mean sacrificing taste and flavour, but not anymore. Thanks to advancements in production techniques, the quality and taste of non-alc beers have significantly improved,” he said.

Albertus Lombard, Lion’s Premium Brand Director explained that NOLO producers have responded to this consumer confidence by premiumising and diversifying their non-alc range.

“Over the last few years there has been a noticeable increase in consumer awareness and acceptance of non-alcoholic beer as a viable option. In response, breweries expanded their non-alcoholic beer portfolios, offering a wider range of styles and flavours to cater to different tastes. This evolved from easy drinking styles to more flavourful options which have now become a meaningful size within the category,” he said.

In the NOLO wine segment, sparkling wines are particularly popular, as they compensate for the lack of alcohol with textural bubbles.

“For sparkling no alcohol wines, the introduction of effervescent bubbles helps to fill that void and adds excitement and energy to the palate, therefore some consumers might find no-alcohol sparkling wines more palatable compared to no-alcohol still wines. Also, no-alcohol sparkling brings that feeling of occasion and celebration to an event, even without the alcohol,” Flynn said.

When it comes to non-alc spirits, distillers are already well-accustomed to adding and blending flavours, as Four Pillars Founder and Head Distiller, Cameron Mackenzie, explained.

“Non-alc spirits are a difficult product to make so hats off to anyone that does it and does it well. For us, the benefit was having the experience in extracting flavour from botanicals to create a product, which is essentially what we have done with Bandwagon Dry and Bloody Bandwagon, but just in a different way to our gins.

“Bandwagon is simply the non-alcoholic version of our two most popular gins, Rare Dry Gin and Bloody Shiraz Gin. They follow all the same flavour paths minus the alcohol, so anything our gins can do, so can our Bandwagon products. Both Bandwagon Dry and Bloody Bandwagon can be enjoyed as classic G&Ts, with a splash more Bandwagon than a usual gin serve to really let the botanicals of the non-alc spirit shine through,” he said.

One area that NOLO products could stand to see greater recognition is in the awards scene. Brodie French, Head Brewer at Hawke’s Brewing, outlined the situation for breweries.

“Currently low-alc is judged as 0.5 to 3.5 per cent ABV in the reduced/low-alc category at the AIBAs and 0.5 to 2.5 per cent at the Indies, which is fine. However, at the Indies, Reduced Alcohol beers get judged for trophies or Best in Class along with Session beers, which includes beers up to five per cent, which doesn’t seem fair. The two categories should be separated into their respective trophies so Reduced Alcohol is awarded a trophy separately from Session beers,” he said.

Potential for growth

Expansion of the NOLO market shows no sign of stopping, with double digit growth in Australia last year. Even so, there is greater scope for growth in the NOLO market, especially when considering the size and influence of international NOLO brands and products.

“Australia has seen an increase in the availability of non-alcoholic alternatives however still does not yet match the depth and breadth of options found in some European markets. However, with a growing trend towards moderation in alcohol consumption, the Australian non-alcoholic beverage market has continued to steadily expand,” Lombard said.

French also identified low-alc as an area of growth for liquor retailers.

“Non-alc beers can be sold outside of traditional liquor channels like convenience and grocery, however low-alc beers are exclusive to liquor retail,” he said.

In the future, the producers that spoke to National Liquor News expect the quality to continue to increase, and consumers to seek out premium options.

Watkins is confident about the growth potential of the industry.

 “In the long term, the non-alc category is likely to evolve into a full-fledged industry, standing on its own with a diverse range of products and experiences that cater to all types of consumers looking for alcohol-free alternatives. This isn’t just a trend; it’s the emergence of a new landscape in the industry.”

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