Attitudes towards Low- and Non-alcoholic Drink - UK - April 2015
“Cost is also a barrier hampering over-45s’ interest in the market and introductory offers or money-back guarantees could encourage trial to try to address the doubts about the quality of these drinks.”
– Chris Wisson, Senior Drinks Analyst
This report looks at the following areas:
- Managing expectations of saving money on low/non-alcoholic drinks
- Winning over older drinkers
- Competing more efficiently with soft drinks
- Following in German footsteps
Lower/non-alcoholic variants remain a niche part of alcoholic drink markets in the UK, with a quarter of adults having drunk them in the six months to February 2015. With many Brits cutting back on their consumption of alcohol on health grounds, there are opportunities for reduced alcohol drinks to thrive as less calorific options. However, they appear to be losing out to soft drinks, which are many drinkers’ preferred alternative to standard-strength alcoholic drinks for a variety of occasions. Links to being too expensive and having an unappealing taste continue to hamper the market.
Nevertheless, there have been encouraging signs of rising lower-alcohol beer sales since the introduction of the 2.8% ABV (Alcohol by Volume) tax band, with the segment being buoyed by an increasing number of high-profile operators. However, lower/non-alcoholic wines continue to struggle, largely due to perceptions of their inferior taste and a lack of innovation. An increase in NPD (New Product Development) activity, store visibility and marketing support is likely to be needed to drive these segments into more robust growth in the coming years.
This report covers the UK market for low/non-alcoholic drinks and explores consumer attitudes towards these variants. In all categories, non-alcoholic drinks refer to those which have an ABV of 0%, or have trace amounts of alcohol (eg 0.1% ABV).
Many consumers are cutting back on their consumption of alcohol, largely on financial and health grounds. Lower/non-alcoholic drinks remain a niche part of the alcohol landscape in the UK, a situation which is unlikely to change in the coming years. The lower-alcohol beer market is seeing slow growth, with a number of new operators such as Foster’s Radler boosting the visibility and credibility of the market. However, inconsistencies in the quality of these drinks are affecting consumer views and need resolving. Meanwhile, the lower/non-alcohol wine market has struggled in recent years, with a lack of NPD activity and marketing support also holding back volume growth.
Perceived poor taste is among the key reasons why sales growth has been limited in these markets. Only a quarter of adults drank at least one type of a low/non-alcoholic drink in the six months to February 2015, underlining how the majority of adults need convincing about their credentials. The lower-alcohol segment is likely to have to utilise sampling and/or promotional activity to win over the many sceptical consumers.
Brands also have to find ways of communicating value for money more effectively as just under half of drinkers would be interested in lower/non-alcoholic drinks if they were noticeably cheaper than standard-strength variants. While lower-alcohol drinks do benefit from tax breaks, many consumers appear to expect greater savings than these can accommodate. Rather than focusing on the absence of alcohol, brands should instead communicate what they have included which justifies their price. Examples of this include a complex production process, unique ingredients or added flavours such as citrus, all of which can make these drinks seem more premium.
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