India: Zero-alcohol beer gradually becoming new rage in India

The zero-alcohol beer is being tipped as the next big thing in the global market as an increasing number of people are choosing to abandon mainstream lagers in favour of healthier alternatives, the Financial Express reported on March 8.

At a Diwali party hosted by his cousin, 25-year-old Raghav Anand, a New Delhi-based businessman, absentmindedly opened a can of his favourite Heineken beer and finished almost half of it before noticing the bemused expressions around him. “Everybody asked me why I had chosen a non-alcoholic beer when there were alcoholic variants available… That’s when I realised I was having Heineken 0.0 (an alcohol-free malt beverage by the brand) and not just my regular, good old beer,” laughs Anand, adding, “But the resemblance in the taste was uncanny… It tasted the same as beer except that it was healthier… I have its six-pack stock at home at all times now.”

The zero-alcohol beer is being tipped as the next big thing in the global market as an increasing number of people are choosing to abandon mainstream lagers in favour of healthier alternatives. The world’s biggest brewers, Anheuser-Busch InBev (AB InBev) and Heineken, sensed this change and came up with non-alcoholic versions of their signature brands—titled Budweiser 0.0 and Heineken 0.0, respectively—which were launched in India last year. Besides these, other options in the market include Coca-Cola’s Barbican, Bavaria Brewery’s Bavaria 0.0%, United Breweries Group’s Kingfisher Radler and Delhi-based Jade Forest’s Ginger Ale. Mumbai-based zero-alcohol beer brand Coolberg also has a range of offerings.

“The world over we are seeing an increase in the sales of non-alcoholic malt-based beverages, so we thought of expanding our portfolio into such a segment, as this caters to different kinds of audiences—those involved in non-alcoholic adult occasions and people who don’t drink alcohol,” says Ramesh Viswanathan, chief new business officer at United Breweries. The Bengaluru-based beermaker, partly owned by Heineken, is seeing strong sales for its Kingfisher Radler and Heineken 0.0 variants from not just the metro cities, but also from places like Jaipur and Chandigarh. The two products, which were launched in March last year, are currently available in 100 Indian cities.

A change in consumer tastes and preferences is deemed responsible for this growth of the non-alcoholic beer industry. “Studies have confirmed that Indians have a palate for sweet-tasting beverages and sweeter beer styles such as wheat beers. Craft-style beers are also becoming increasingly popular… homegrown brands are experimenting with flavours and fruits specific to India,” says Shuchir Suri, co-founder, Jade Forest, a Delhi-based startup whose products are widely used in top bars and restaurants across the city. “Beer, once stereotyped as a drink more consumed by males, is now enjoyed by both men and women. As trends show, India is easily influenced by western patterns, hence, we expect a paradigm shift towards non-alcoholic beverages,” he adds.

Globally, the non-alcoholic beer market was valued at over $13.5 billion in 2016 and is anticipated to grow at a compound annual rate of 7.5% till 2024, according to Global Market Insights, a US-based global market research and consulting services provider. Interestingly, one of the major factors propelling this growth of zero-alcohol malts, lagers, ales and shandies is the occurrence of a ‘beer belly’—a consequence of higher carbs, sugar and calorie intake due to alcohol, which also slows down the breakdown of fat in the body. “The calories in non-alcoholic beers are less than that in carbonated soft drinks and their alcoholic versions… Consumers are now adopting a more conscious lifestyle, becoming more aware of their alcohol intake and are looking to consume alcoholic beverages in moderation… This has also enhanced the adoption of non-alcoholic products,” says Ben Verhaert, south Asia market president at AB InBev. Typically, both Heineken 0.0 and Budweiser 0.0 have around 40-60% less calories than traditional soft drinks.

Interestingly, Budweiser 0.0, which was launched in India in July last year, is gathering momentum not just in the top urban centres, but also in Gujarat where sale and purchase of alcohol is prohibited.

“We have been retailing non-alcoholic beers since the past six years, but the growth started from last year,” says Delhi-based Rahul Singh, founder of Beer Cafe, India’s largest alco-beverage service brand. “These malted beverages are far more healthier than their alcoholic counterparts and people who understand global trends and are worried about their health are happily opting for these,” he says, adding, “These alternatives are coming readily to the aid of those who have to get behind the wheel after a party, college-goers willing to experiment, those who have had heavy workout sessions and are looking to relax, among other people.”

The affordability factor, too, is a great attraction. A 330-ml can of Budweiser 0.0 is priced at Rs 80, while that of Heineken 0.0 is available for Rs 70. A pack of 12 Jade Forest’s Ginger Ale bottles (275 ml) is priced at Rs 1,020 on its website, while a pack of six Barbican bottles (330 ml) is priced at around Rs 600 on e-commerce platforms. The Coolberg flavoured no-alcohol beer is available for around Rs 70. “The making of these is more expensive because alcohol has to be stripped out towards the end of the beer-making process, but since consumers don’t have to pay any government duties on these, it gets cheaper,” explains Singh. “For instance, if a regular beer costs Rs 150, the government takes `80 in taxes and duties, but for a non-alcoholic variant priced at Rs 70, the government takes a mere Rs 15,” he says.

However, one factor that might serve as a hindrance in the future is the levy of additional taxes and cess, as per media reports. The government is reportedly seeking to increase the tax on such drinks to 28% from the current 18%, and levy an additional 12% compensation cess. While others refused to comment on the said proposal, as per Viswanathan, this move is more or less baseless. “There is no basis for increasing the tax or levying a cess on non-alcoholic malt-based beverages. We are providing an agri-based, low-sugar, healthy product. It’s a healthier alternative to the ‘sin’ products… We don’t expect any change in taxation for such products,” he says.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .