A “moderation movement,” not “Dry January,” is driving the growth of non-alcoholic beer

The category is growing rapidly as consumers look for healthier options without compromising on taste and quality. For a long time it was not possible to achieve this Trinity.

But as brands – big and small, international and local – move into this space, drinkers have more choice than ever before.

This growth comes at a time when “normal” beer consumption is declining somewhat. Let's take the example of beer lovers from the past Germany, home of Oktoberfest. In recent years, the love of beer has developed there, which has led to a significant decline in beer consumption – last year alone, beer sales fell by 4.5%, according to official figures. Germany is now one of Europe's top markets for non-alcoholic beer, as data from the beverage market research institute IWSR shows.

While this may sound bleak to some traditional breweries, it just means that a new product category besides beer is opening up for the alcohol-shy demographic. Globally, the non-alcoholic beer market was valued at $22 billion in 2022 and is expected to continue to grow constant 5.5% over the next 10 years, market research group Global Market Insights found.

Away from “tired and dusty”

With “Dry January“In the rearview mirror, one thing is clear: While it's a great way to get people thinking about non-alcoholic drinks, opting for such drinks is far from being a one-month fad. Consider Lucky Saint, Britain's top non-alcoholic beer brands, according to market research firm Circana – the company reported a whopping 158% increase in sales in the week before Christmas compared to the same period last year.

The trend has also caught the attention of the world's biggest players. Alison Payne, global soft drinks marketing director at brewing giant Heineken, has observed over the years that Dry January helps attract more people into the growing soft drinks market.

“People who get into Dry January maintain some of that moderation habit even after January,” Payne said Assets.

Based in Amsterdam Heineken was among the first established international breweries to introduce non-alcoholic beer products. Heineken 0.0 was first launched in a few select European markets in 2017 and is now available everywhere 110 markets. Payne says the brand's “0.0” products have transformed non-alcoholic beers, previously considered “tired and dusty,” into dynamic and innovative drinks.

“It started with some sort of educational effort to make sure consumers were aware,” she said.

Heineken, the world's second largest brewery, launched its non-alcoholic range with the 'Now you can' campaign, where people were seen driving cars with a Heineken 0.0 bottle in their hand and giving presentations to show what it can be like to choose non-alcoholic beers.

Luke Boase, CEO of UK-based Lucky Saint, said Assets The brand has worked hard to achieve accessibility and continues to think about it. The company has achieved triple-digit growth in 2022 and 2023 due to the interest gained.

“The availability aspect is something that we have given a lot of priority to as a company and is somehow difficult to achieve -[to] Make sure it's not just a product that sits on the bottom of the fridge and never gets seen. “It’s available on menus…it’s available on tap now,” Boase said.

To achieve this, Lucky Saint has teamed up with pub group Mitchell & Butlers for the Thou Shalt Go to the Pub campaign, giving away gifts 10,000 free pints of its non-alcoholic beer to celebrate Dry January. Lucky Saint said it had a record-breaking January as more people chose its beers this year, Boase said.

“Campaigns like this make a huge difference in raising awareness so that people are actively thinking about non-alcoholic beers,” said Susie Goldspink, head of non-alcoholic and low-alcohol beers at IWSR Assets.

“The quality of non-alcoholic beer has improved significantly in recent years, the products taste much better, are more comparable to equivalent full strength beers and are more widely available with a lot of marketing effort and campaigns to increase awareness,” she said. “We are at the stage of category development where the major players are helping to drive testing and trust of their products in the category, which also benefits the smaller independent players.”

The “Moderation Movement,” Gen Z and Beyond

While people generally try to moderate their alcohol consumption, it is Generation Z (who will be between 12 and 27 years old in 2024) who are coming of age, according to data, who are driving the growth of non-alcoholic beers and ushering in a new era of socializing Drinking ushers in Payne.

Moderation in today's world means “lots of fluids” when drinking, she said – an example of this is switching between traditional and non-alcoholic beer in the same evening.

The Heineken non-alcoholic beer market can look very different depending on the country – in Spain, for example, this segment is well developed and accounts for almost 10% of the total beer market. According to Payne, the Netherlands is also one of the most mature 0.0 markets. Heineken's goal in Europe is to offer more non-alcoholic alternatives to key strategic brands in the region.

The time is particularly right now, Payne emphasized, as Generation Z is more likely to consider replacing their alcoholic beverage with a non-alcoholic one.

“Older consumers still have some of their old habits, which is that 0.0 beer is there when you give up, whereas Generation Z is much more open to that fluidity around moderation,” Payne said.

Lucky Saint's Boase reflects the idea that the youngest consumers – those belonging to Generation Z – have the most people who choose not to drink at all. But a more likely factor that attracts consumers to the Lucky Saint brand, regardless of their age, is its health consciousness.

“The biggest driver of this category and the people who come into this category … is health,” Boase said Assets, adding that Lucky Saint beers have a third of the calories than regular beer. He added that both physical and mental health reasons drive people's need for moderation, but it is not up to one age group to grow the soft drinks market.

“The moderation movement affects all age groups,” Boase said.

Attract consumers with innovations

With consumers willing to adopt non-alcoholic beverages and companies actively investing in this segment, the next few years will be about further normalizing and engaging consumers with non-alcoholic beer.

Heineken's 0.0 category now offers flavored beers that can compete with other carbonated drinks in some markets to offer new experiences to consumers.

“We are also seeing that category boundaries are blurring. So we think there are opportunities in areas like 0.0 beer cocktails… the kind of ready-to-drink cocktail areas,” Payne said.

In the company Results report 2023Heineken reported double-digit growth for non-alcoholic beer and cider in several markets.

“Ensuring we can make fantastic cask products will be a big focus in 2024… I think we can continue to offer variety in flavor – consumers want to discover new things,” Payne said.