Alcohol-free beverage market booming after booze bans

Non-alcoholic beverages – including beer, wine, and gin – have grown in popularity following the three Covid-19 booze bans over the past year.

South Africans were hesitant to switch out alcoholic beverages for non-alcoholic beverages prior to the bans – but this is now changing.

The shift can be seen in a report from alcohol beverage data and analysis company IWSR, which found that South Africa is expected to see a double-digit rise in no/low alcohol beverages over the next few years.

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Growing taste

“South Africa is expected to experience the highest compound annual growth rate (CAGR) volume rate (2020 to 2024), at approximately +16%, albeit from a low base,” according to the IWSR No- and Low-Alcohol Strategic Study 2021.

This rise is a turnaround from what was once a prevailing negative attitude to no/low alcohol beverages, especially regarding wine. The VinIntell November 2018 issue, for instance, noted that there were quality issues around non-alcohol wines, which consumers were not prepared to shrug off. “Consumers are saying had they wanted a low- or no-alcohol wine they would have bought fruit juice,” it noted.

Global shift

SA is not the only country moving to no/low alcohol beverages. The report found that this part of the global market is expected to rise by over 31% by 2024.

This trend is a sharp turnaround from flat performance for the 2019-2020 period, which only saw a 0.5% rise in the category.

Though the booze ban played a role in people moving to no/low alcohol beverages in SA, IWSR notes that ‘avoiding the effects of drinking alcohol’ was the main reason people were doing it around the world.

“What we’re seeing is a moderation trend that’s sweeping across key global markets, and that’s bringing
with it increased demand for reduced alcohol, or alcohol-free drinks,” says Mark Meek, CEO of London-based IWSR Drinks Market Analysis.

Boost for local producers 

Locally, these types of beverages are finding a market. Shoprite says the sale of alcohol-free beer and other beverages increased over prohibition periods, with the market seeing a 150% increase in demand during the initial ban last year.

Flare Beverages MD Sean McIntyre says sales of its alcohol-free drinks “increased between 20% to 30%, which is substantial” for a liquor retailer that imports its beer. He says the high demand was certainly exacerbated by the bans.

Non-alcoholic drinks are not new. But sales spiked when consumers found themselves in pursuit of substitutes for their depleted alcohol supplies.

The same but not

Khuleko Siwele, a 23-year-old non-alcoholic beverage consumer, says she first opted for a Heineken 0% instead of a soft drink or juice simply because she was curious. “They actually taste very similar. I don’t want to say the ‘same’ but it’s hard to tell you are not drinking alcohol”.

Siwele says that on days when she is too late to buy alcohol with a percentage, she would go for the alcohol-free beverage as she can still have a booze taste.

While consumers can still enjoy the taste of an alcoholic beverage, what is different is that a state of sobriety is maintained – which may or may not be preferred.

A product is classified as alcohol-free when it contains less than 0.5% alcohol, according to the Liquor Products Act.

This story first appeared on Moneyweb and has been republished with permission.