UK: UK drinks industry embarks on low-alcohol trend
The UK drinks industry has embarked on a detox that extends beyond January with companies racing to bring out nolo (no- or low-alcohol) beers, spirits and cocktails to satisfy a thirst for hangover-free drinking, The Guardian reported on January 20.
The Scottish beer giant Brewdog started this year by opening the worlds first alcohol-free beer bar in London. At face value the move seems counter-intuitive but sales of no- and low-alcohol drinks were worth £60 mln to the pub trade last year a near-50% increase, according to research firm CGA. The booze-free drink market is worth at least double that if supermarket sales are taken into account as Britons try to cut their alcohol intake at home too.
With an estimated 4.2 million UK consumers trying to stick to a dry January pledge, the British Beer & Pub Association (BBPA), estimates that nearly 5 mln pints of low and no-alcohol beer will be bought this month. But for many people, abstaining from booze is already a lifestyle choice with more than one in five adults teetotal, according to official figures. The worlds biggest brewers and drinks makers have been quick to spot the opportunity. Johnnie Walker owner Diageo has non-alcoholic spirit Seedlip while Budweiser owner Anheuser-Busch InBev and Heineken have launched dozens of low- and non-alcoholic beers. Smaller-scale and craft brewers are also trying to carve out a role; Brewdog has enjoyed success with its low-alcohol Nanny State pale ale, while London-based, alcohol-free craft brewer Big Drop is also enjoying bumper growth with a range of beers that includes lager, pale ale and IPA.
To keep up with demand, Big Drop will next month launch a £1 mln crowdfunding campaign as it looks to increase its presence in UK pubs. The goal is to make sure Big Drop is on tap right next to your favourite craft beer. We want people to be as confident ordering Big Drop as any full-strength beer, said its co-founder Rob Fink, a former City lawyer who started the company with his friend James Kindred.
Sales volumes of low and non-alcoholic beer have risen by about 18% in the past five years in Western Europe, according to Euromonitor, and are forecast to climb another 12% by the end of 2022. Growth has been even stronger in the UK.
Big Drop has already raised £1.3 mln from private equity and trade investors, including the founders of Camden Town Brewery, from several previous fundraising rounds. It plans to use the Seedrs investment platform to expand its presence in the UK as well as push into new markets such as the US and Australia. The company, which uses specialist brewing methods to ensure the alcohol never exceeds 0.5%, had a turnover of close to £1 mln in 2019 but hopes to hit £6 mln in two years.
Although drinkers were inundated with new no- and low-alcohol beers, wines, spirits and cocktails last year, CGA analyst Charlie Mitchell expects the trend to continue in 2020 as opting out of alcohol moves into the mainstream. Its research found that one in three adults had tried one in the previous six months.
With even more people likely to cut back on booze after the Christmas excesses, producers, operators and suppliers are queueing up to jump on the opportunity with an ever-increasing range of no- and low-alcohol alternatives, he explains. With many consumers eager to trial them out of curiosity, the challenge will be to build loyalty in a market where it is increasingly hard to stand out.
In common with Scottish brewer Brewdog, which rewarded small investors with perks, Big Drop which does not own its own brewery is offering investors extras such as festival tickets and discounts to encourage them to part with their cash, with £50 the smallest stake.
We started this company because our own lifestyles had changed, explained Fink who wants to do for alcohol-free beer what the craft beer revolution has done for beer.
James and I had recently become fathers and the lower-alcohol beer we wanted just wasnt there. We knew there were a lot of people who felt exactly the same way as we did.
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