Nov 23, 2022 — As the holiday season approaches, the beverage industry expects sales to increase as consumers stock up on booze. However, manufacturers are increasingly responding to consumer demands for zero percent alcohol options, as Generation Z leads the way in the “moderate drinking” space. Younger generations still demand full flavors but with less ABV as health priorities exceed the levels of alcohol consumption often associated with older generations.
As the desire for low-alcohol and alcohol-free pops up, the industry is taking note and investing in products aimed at consumers eager to party on their own terms.
Some of the biggest players in the industry are moving towards the zero percent market.
Earlier this month, Keurig Dr Pepper, the beverage conglomerate that owns 7UP, Snapple and zero-percent-alcoholic cocktail makers Atypique, invested a minority stake in non-alcoholic brewery Athletic Brewing.
This purchase marks an expansion of Keurig Dr Pepper and the beverage industry’s growing interest in low- and no-percentage alcohol.
Talking with FoodIngredientsFirstChris Furnari, communications manager at Athletic Brewing, points to the impact of the current low-drinking trend.
“An increasing number of drinkers are cutting back on their alcohol intake, largely because they are discovering the harmful side effects of drinking too often. A recent Gallup poll found that 71% of Americans believe alcohol negatively impacts them,” he says.
“We’ve also seen recent data suggesting that nearly half (46%) of American drinkers are actively trying to cut back on their drinking. However, 80% of our consumers still drink alcohol. They are just more careful about when they decide to drink.
This reduction in alcohol consumption is contextual but also generational.
“In particular, younger consumers, especially those of Generation Z, choose to reserve the occasions when they drink alcohol for special events and weekends,” concludes Furnari.
Christmas is still a lucrative time for beverage manufacturers, even as demand has shifted from traditional seasonal beverages to tasty non-alcoholic offerings. NPD aimed at developing this market is proving effective.
Keurig Dr Pepper wants to tap into this consumer market. It presents robust data to support this direction.
“Non-Alcoholic beer in the US grew nearly 20% in retail dollars over the past year, with the craft segment, where Athletic Brewing has a 55% market share, far outpacing the category’s total growth.” , he claims.
Keurig Dr Pepper is confirming its direction in the zero percent market with the understanding that consumers still want to drink, just in moderation.
“Non-alcoholic beer accounts for more than 85 percent of total sales in the rapidly growing category of non-alcoholic beer, wine and spirits as more consumers moderate their alcohol consumption,” the company notes.
Keurig Dr Pepper Executive Chairman Bob Gamgor confirmed the company’s direction. “Our investment reflects our interest and ability to move into exciting white spaces, even in the blurring of alcoholic and non-alcoholic categories,” he says. “We look forward to partnering with the Athletic Brewing team to help them scale the business.”
Recent data and research from Innova Market Insights supports Keurig Dr Pepper’s analysis. The numbers show how Gen Z is pushing the increase in beverage sales to zero percent.
The market researcher highlighted the potential of this space, noting the particularly high number of consumers demanding non-alcoholic options. He also notes that this growing market still presents significant opportunities as consumers demand full-flavored beverages without the boozy effect.
There has been an increase in NPD within the low- and no-alcohol sphere, including
Kerry releases a line of premium zero percent botanicals for the upscale market of the teetotal crowd, hoping to reclaim its share within the expanding zero percent space.
Earlier this year, FoodIngredientsFirst spoke with Vicky Berry, European senior business development manager at Synergy Flavors, during International Beer Day. At the time, she wanted to see the 0% increase in launches.
“2022 has seen some big launches in this space, such as Guinness 0:0 and Peroni Nastro Azzuro 0:0% – the non-alcoholic counterpart to Peroni Nastro Azzuro, which the Asahi Group has invested €20m (€20.4m US dollars) ) in developing countries,” he said.
By James Davis
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