Sales of non-alcoholic beverages have been rising since the mid-2000s, when alcohol consumption began its steady decline. And such is their success, the global non-alcoholic drinks market is now valued at a whopping $1.46tn and is projected to grow at a CAGR of 6% over the next five years, according to Grand View Research.
But while these drinks are positively flying off the shelves, the industry is facing questions over flavour, with consumers saying they fail to match up to their alcoholic counterparts. Furthermore, it appears non-alcoholic beers are particularly susceptible to criticism.
“Most non-alcoholic beer isn’t great,” says Andy Crouch publisher of All About Beer.
So, are non-alcoholic beverages failing to satisfy this growing market and what does this mean for the future of the industry?
Are non-alcoholic drinks failing on flavour?
Surprisingly, the answer to this question is no. Because while non-alcoholic beverages might not fully match up to their alcoholic counterparts, they offer consumers a social solution to a decades-old problem.
“It’s not about creating replicas but producing drinks for adults that help people feel socially included,” says Laura Willoughby, founder of mindful drinking organisation, Club Soda. “Some of the most successful alcohol-free drinks are not mimics.”
Furthermore, many consumers are looking for healthy drinks, which are non-alcoholic, without resorting to sugar-sweetened soft drinks or juices.
“Alcohol-free beer is 100% healthier than a soda - in fact, once you take alcohol out of beer it is one of the healthiest things you can drink - so it’s important not to always see alcohol-free as a lesser form of alcohol, but instead good drinks made by people who know how to craft great drinks using hops, grapes, vintagers, fruit and distillation techniques,” adds Willoughby.
In short, taste is not top priority with consumers.
“Taste is certainly important, but it’s no longer the sole priority,” says Brian Rosen, founder and managing partner of InvestBev. “Consumers in this category are often motivated by health and wellness benefits, which can outweigh minor differences in taste. With the current hyper-focus on better-for-you products, many are willing to accept a slightly different flavour profile if the beverage aligns with their lifestyle goals.”
But while this may be true, flavour is clearly not irrelevant to consumers and beverage brands are moving fast to meet growing demand for high-quality, non-alcoholic drinks.
“The category has taken great steps forward over the last eight to ten years to the point that most low-alcohol and alcohol-free options can now hold their own against full strength drinks in taste tests,” says Peter Gowans, UK country manager for Erdinger Alkoholfrei.
And industry experts have been quick to celebrate the sector’s success.
“The low- and no-alcohol category has made significant strides in recent years, often surprising even seasoned drinkers with its quality,” says InvestBev’s Rosen. “As consumers embrace drinking less and shift toward alternatives, manufacturers have invested heavily in flavour innovation. These products now deliver taste profiles that rival traditional alcoholic beverages.”
But what more can the industry do to improve its non-alcoholic offering and further boost sales?
How can the beverage industry boost non-alcoholic sales?
The beverage industry overall is going through a time of huge innovation and this includes the non-alcoholic beverage sector.
“The growth in opportunity has driven more innovation in low alcohol and alcohol-free drinks over the last ten years,” says Erdinger Alkoholfrei’s Gowans.
What’s more, many in the industry expect to see a rise in the launch of new brands, showing huge confidence in the future success of the sector.
“Whilst some drinks, notably beer, are more advanced than others, we’re likely to see continued development as more producers join the market and strive to improve the consumer experience,” says Gowans.
So, what more can the industry do to further its success in the non-alcoholic sector?
The answer to this takes us back to where we started – the importance of flavour. Because it might not be the top priority for consumers, but it definitely matters.
“To resonate with consumers, manufacturers should lead with taste and flavour while positioning the no-alcohol status as an added benefit,” says InvestBev’s Rosen. “Consumers care about enjoying a great-tasting product.”
Furthermore, brands are fully aware of the importance of flavour in consumer satisfaction and loyalty.
“Consumers are increasingly looking for high-quality no- and low-alcohol options that don’t compromise on flavour,” says a spokesperson for Heineken.
And brands can use this time, when alcohol consumption is in decline, to really highlight the benefits of their products to consumers.
“Effective marketing should emphasise bold flavours, premium ingredients, and wellness advantages, creating products that feel aspirational and indulgent rather than merely functional,” says InvestBev’s Rosen.
