The Non-Alcoholic Drink Revolution

Market Shake's next cycle is dedicated to the zero and low alcohol sector, thriving in the pandemic.

Hello, Market Shakers! 

After our plant-based revolution, our next Market Shake cycle covers another exciting category thriving during the pandemic: the no-low alcoholic drinks. In the coming weeks, we will share worldwide trends, consumers’ feedback, products available in the market, and finally, some insights with great interviews with industry professionals. 

We will mainly focus on alcohol-free beverages, new brands, and emerging trends. Today, the sector is still relatively limited compared to convention spirits, accounting for 3% of the global market. But the 2021 IWSR Drinks Market Analysis projects a 31% growth by 2024. Carried by younger generations carrying about health and alcohol moderation, the category is promising. 

Before we jump in, we thought first to define what’s the non-alcoholic category understood here. 

The thirst for non-alcoholic beverages isn’t new. Going ‘virgin’ with a drink goes centuries back. During the cocktail age in the United States, recipe books referred to ‘Temperance’ drinks, also known as the mocktails of today. The word mocktail itself appeared in 1916. The culture of alcohol-free cocktails took off in the 80s, and from there, it took several decades for new sophisticated entrants with higher standards to enter the field. 

In the past decade, innovations brought the category to a whole new level, from beer to spirits, RTDs, wine. Since the early 2010s, the category went from limited, often very sugary, options to exciting premium brands landing on the market. And with good reasons, as the consumption of alcohol-free drinks increased pretty much everywhere in the last few years, with the 18-24 and 25-34-year-old generations not keen on drinking alcohol at all. 

What’s a non-alcoholic beverage exactly?

In principle, a non-alcoholic drink is an alternative to an alcoholic beverage but made without alcohol or with the alcohol removed or reduced. Most of the time, though, non-alcoholic beverages will contain trace amounts of alcohol because manufacturers can’t purify them further. So most drinks labeled as non-alcoholic will hold up to 0.5% alcohol by volume (ABV). 

Due to the lack of clarity surrounding the alcohol concentrations in non-alcoholic drinks, experts express concern about health and risk associated with their consumption. They criticize label rules for being misleading. For instance, drinking non-alcoholic beverages before driving a vehicle isn’t trivial in countries with strict drunk driving laws. Furthermore, addiction specialists assessed that even a tiny amount of alcohol is enough to bring on people with addictions.

Legally, non-alcoholic and alcohol-free drinks aren’t synonymous.

The tricky part about non-alcoholic and alcohol-free drinks is that they refer to two different categories. 

  • Legally, non-alcoholic products have no alcohol in them whatsoever, and even though the legal definitions may vary by country, the limit is rather strict and around 0.05%. 

  • On the other hand, alcohol-free products—and yes, it does sound the same, widely differ depending on countries’ rules. For example, in Europe, most countries set the limit at 0.5%, but drinks can reach higher concentrations. 

The confusion continues with “low-alcohol” drinks for which the limit can go up to 1.2% or even higher, up to 2.8%. Sometimes, the definition also varies depending on the nature of the drink—whether it’s a malt or fermented beverage, for instance. So let’s do a quick tour of some legislations in the world. 

  • In the United States, the law distinguishes between ‘non-alcoholic,” a malt drink that contains less than 0.5% alcohol by volume (ABV), and “alcohol-free” for malt drinks that contain no alcohol at all. 

  • The European Union requires drinks containing more than 1.2% ABV to state their alcoholic strength. Below 1.2% is up to countries’ legislation to determine the liberalization for non-alcoholic and alcohol-free beverages. Italy and France follow the EU legislation, and non-alcoholic drinks contain precisely or less than 1.2% ABV. In Germany, Sweden, and Denmark, “alcohol-free” beverages are allowed to have a maximum ABV of < 0.5%. Finland, however, defines an “alcohol-free” drink as being anything under 2.8% ABV. 

  • The United Kingdom distinguishes between the low-alcoholic label, for drinks under 1.2% ABV, and the alcohol-free label, for drinks under 0.05%—a position stricter than most European countries. A product at 0.5% ABV is considered “de-alcoholized” under the Food Labelling Regulations. 

  • In Japan, drinks under 1% ABV are not considered alcoholic beverages under the Liquor Tax Law. However, the Advertisement Judging Committee on Alcoholic Drink strictly defines non-alcoholic drinks with 0.00% ABV. 

  • Australia doesn’t require alcohol labeling and warning for drinks with less than 0.5% ABV.

  • In Russia, drinks containing less than 0.5% ABV are considered non-alcoholic, but the limit is 1.2% or less for fermented products such as kvass. 

From ‘replacing’ to being a category in itself

Health concerns stimulate the growing interest in no and low-alcohol drinks. Consumers are more aware of the health benefits of staying away from spirits, especially young generations. The pandemic further encouraged people to drink with moderation—we’re not facing so much an abstinence movement as a search for balance.

In parallel, consumers started to appreciate NoLo drinks for their inherent quality, especially for premium products. The perception of non-alcoholic beverages has changed and expanded, thanks to clever brand communication. Major companies and start-ups are opening the way to a new generation of drinks that can be social, tasty, and cool, even if non-alcoholic. 

See you next Tuesday! 

We will do a quick world tour of emerging trends and brands and take a peek at Japan’s market.

Reach out for questions and comments!

👉 P.S.: GourmetPro is also on Linkedin and Twitter!