What does future hold for the non-alcoholic drinks sector? 

T

he time is ripe for new non-alcoholic beverages to leap onto the market. Whether through sidling up alongside alcohol in traditional drinking moments or carving out a space of their own, there is plenty of room for innovation and growth in the category, according to suppliers and producers at the Innovation In Non-Alcoholic Beverages Conference 2022, presented by Just Drinks conference, held in London in late September. 

Speakers were unanimous in their belief the category is set to boom despite increasing competition from an influx of new non-alcoholic products. 

Setting the scene, James Crampton, Heineken UK’s corporate affairs director, said: “Times are changing. We know 70% of us now want to lead a healthier lifestyle, whether that’s choosing meat-free days or being mindful of how much alcohol we’re consuming. We want moderation to be aspirational. We want moderation to be even cool.” 

Craig Hutchison, founded and CEO of Mindful Brands, added: “This category will continue to grow, outpacing alcohol for the rest of our lifetime. Until non-alcohol-consuming adults have the same amount of choice as alcohol-consuming adults have, there is room for more brands.” 

The product, however, has to be right. Flavour, ingredients and aesthetics are essential to creating a moment that stands up to its conventional alcoholic counterpart. “Aspirational” moderation won’t be achieved with a pint of fruit juice in a dirty glass. 

Quality was top of the agenda in London and “flavour is king” became a recurring catchphrase of the two-day conference. “I can’t emphasise this point enough; our favourite drinks are always preferred because of how they taste not necessarily because of what they do,” Boost Drinks marketing and international business director Adrian Hipkiss said. “The taste of what we offer is critical if we are to scale-up categories and really generate critical mass.” 

Investment in flavour and quality comes with a price and speakers agreed the cost of alcohol alternatives should stay relative to conventional alcohol, both as an indicator of quality and to maintain innovation in the category. 

The need for education, both in the trade and for consumers, was central to the pricing argument but also threaded itself through most discussions. How do manufacturers get consumers to trust new products? How do they communicate the benefits of functional drinks? How can educating the consumer improve their experience? 

A sticking point for non-alcoholic drinks is the lingering stigma around not having a ‘proper’ drink; holding a bottle when everyone else is drinking a pint and fielding questions on the non-alcoholic choice – with women often subjected to awkward questions around pregnancy. 

For this reason, “pints are the holy grail” when thinking about creating a drinking moment that looks and feels traditional, according to Crampton. 

“Pubs and pints go hand in hand, so to be able to really supercharge the category it [non-alcoholic beer on draught] needs to be more available in pubs. Ninety-two per cent of beer volumes in the UK are on draught and we will never make the headway without being viable and visible at the decision point when a punter walks into the bar,” he said. 

Heineken has been working on dispense technology and solving storage and preservation problems to stop beer fermenting once it has left its breweries. He added: “There can be no greater reputational threats to a company than if the alcohol-free beer they sell turns out to be alcoholic.” 

Luke Boase, founder of Lucky Saint, feels releasing his non-alcoholic lager on draught has been one of the company’s top innovations. Just three years ago the thought of draught caused “violent debate” at Lucky Saint HQ. But after trialling it just before the pandemic, Boase said: “The consumer response was so powerful that we’ve gone on and we’ve doubled down on it.” 

But how can brands compete for limited tap space, especially when the demand is not yet great enough for more than one alcohol-free draught line per pub? For Boase, having a giant like Heineken in the market can only do good things for the category. 

“Heineken joining draught is a massive positive for the category. If you have consumers who walk into a pub and expect to find alcohol-free beer on tap, it is wildly positive. As a brand do we worry about it? Not at all,” he said. 

“Functionality is absolutely critical. It provides the energy level that we’re all looking for. It provides a contribution to the nutrition that we all need. But the emotional space is really important, too. And we need to remember that, actually, if we can satisfy some of those moods and moments, that poses some great opportunity for all of us. 
 
“Something we found quite surprising [was] a lot of the traditional functional categories are used in social aspects of our lives. We’ve spoken at a lot of these conferences last couple of years about the importance of substitutes in alcohol. And you might not think that that comes from the likes of sport drinks and energy drinks but it absolutely does, in addition to the great innovation that we see in more sophisticated experiences. The point really is that we need to satisfy both emotional and functional needs states as we continue to grow these spaces.” 
 
A challenge facing the category is how to attract new consumers sceptical of the benefits of energy drinks. Hipkiss said labels need “cleaning up” to make benefits cleaner and consumers need educating on ingredients. 
 
“If 71% of UK adults are tired more than half of the time, why do 42% of 18- to 44-year-olds not consume the energy category?” he asked. “I mean, it’s a very accessible space. There’s a range of price points. There’s a range of formats. It’s available pretty much just in every store that you enter. 
 
“The first thing we need to do is take a look at the barriers: 31% of adults are self-conscious about consuming energy drinks. We need to face the mistrust of ingredients – some of those are becoming more common, I don’t think the consumer would refer to caffeine as a ‘psychoactive substance’ but they’ve been relying on it for some time. But the caffeine in a 250ml energy drink is comparable to a cup of coffee, the caffeine even in a big 500ml serve is comparable to a coffee-shop coffee. 
 
“There’s definitely some education to do on well-known ingredients in addition to ingredients that are maybe not so well known particularly like taurine, or the B-vitamin spectrum. So, we all have a job to educate them.”