Industry Watch

By Jen Gaeto, Contributing Editor

Packaging Reframes the Low/No-Alcohol Story

The low- and no-alcohol category is still very young and, as a result, brand loyalty is weak. The challenge for brands is to attract and maintain consumers, but there’s also an opportunity to build that loyalty and become a de ning brand in the category. So, how can brands carve out a presence in this sector as the trend continues to evolve?

It may be an emerging category, but low/no alcohol is gaining some serious traction, as evidenced by data collected by global alcohol beverage market analyst IWSR for its 2022 “No- and Low-Alcohol Strategic Study.” The study, which examined low/no alcohol markets in Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the U.K., and the U.S., found that the market value of the sector in 2021 reached almost $10 billion, up 6% from $7.8 billion in 2018. The category now has a 3.5% volume share of the total alcohol sector.

To take advantage of this boom, brands and retailers need to understand why consumers are spending more in this category. While some are no doubt turning to low/no alcohol options to support a sober lifestyle, others are motivated by health reasons and a desire to simply reduce rather than eliminate their alcohol consumption. This is evidenced by the number of participants taking part in Dry January, which was designed to help people get into better, healthier relationships with alcohol. In 2022 a total of 131,266 people in the U.K. signed up to Dry January—the highest participation to date. In the U.S., polls from Morning Consult, YouGov, and Attest Surveys found that as many as 15% of Americans planned to give up alcohol during January of 2021.

The IWSR’s study also noted that, globally, consumers are switching between “regular” drinking occasions (full-strength alcohol) and “nights off” (non-alcoholic options). This is supported by a 2021 NielsenIQ Homescan survey, which found that 78% of non-alcoholic drink buyers in the U.S. are also buying alcoholic beer. So, it appears to be a desire for moderation, not sobriety, that’s driving purchasing decisions.

Of those who do not purchase low/no products, many state concerns about the taste and express a belief that they won’t match up to their alcoholic counterparts, giving brands and retailers a concrete challenge to address through the design and marketing of their products. With many low/no options costing about the same as their alcoholic counterparts, getting people to choose them can be a hard sell, especially as they’re competing with cheaper soft drinks from trusted brands, with flavor profiles people know and love. But carving out an identity in the low/no category isn’t a matter of winning over everyone. Success may instead require segmentation and targeted branding that focuses on certain types of people. According to a Mintel report, in the U.K., men—particularly those aged 18 to 34 with annual earnings above £50,000—were the biggest low/no alcohol buyers in 2020. The report speculates that this is driven by concerns over alcohol’s empty calories and its limiting effect on progress in the gym. The statistics bear this out, as interest in low/no tapers as you move up through the age groups. Some brands have caught on to this motivating factor and are emphasizing the health benefits of their products through careful branding, packaging, and advertising. For example, German brand Erdinger Alkoholfrei, or Erdinger Non-Alcoholic in English, which is “brewed according to the Bavarian Purity Law,” has fewer calories and contains vitamins B9 and B12, which “support the regeneration process.” Photography on its website reflects the brand’s target consumer—young, healthy people in sportswear—while the strapline, “ERDINGER Alkoholfrei—the sporty thirst-quencher” leaves little doubt over the target consumers’ interests. Callouts are prevalent on the label, emphasizing isotonic properties and reduced calories. Erdinger has also covered concerns over taste, taking great pains to emphasize the flavor profile and mouth feel of the beverage. Likewise, Oregon-based Ransom Winery and Distillery recently developed Dho -s, a non-alcohol aperitif brand. Launched in 2020, it prides

Labeling for Erdinger Non-Alcoholic emphasizes the beverage’s isotonic properties and reduced calories as well as its avor pro le and mouth feel.