Setting the bar low
After the bountiful Christmas period come two words to strike fear into the hearts of drinks retailers: dry January.
Broke and beleaguered shoppers often like to give their livers and wallets a rest after the party season, but the practice has really gathered steam in recent years after being hijacked by the health lobby.
Alcohol Concern’s Dry January gains extensive coverage in the mainstream media and sales of booze inevitably dip. So, if you can’t beat them, join them – push no-alcohol beers and wines as an alternative to soft drinks, or low-alcohol products, as many simply want a damp January rather than a dry one.
No-alcohol beer sales are up 15% in value to £20.5 million (Nielsen, year to November 8) and 5.6% in volume. But it is just a tiny fraction of the £3.1 billion lager market, and low-alcohol beers such as Carling C2 are struggling, despite the focus suppliers have given them. Low-alcohol beers dropped 30.5% in value to £2.9 million.
Nielsen analyst Natasha Kendall says retailers are trying their best to push these lighter drinks, but consumers are not as excited.
“No and low-alcohol lager was experiencing fair growth, but slowed this summer as the retailers focused on the big packs of mainstream brands to drive sales for the World Cup,” she says.
“Retailers seem more focused on the category than in previous years and it tends to have its own fixture in- store now. It would probably be fair to say retailers are pushing it more than consumers are demanding it.”
Low and no-alcohol wine is also struggling, with the category down 5.9% in volume and 0.5% in value to £37.6 million (Nielsen, year to November 8) – again a tiny fraction of the £5.5 billion still wine category.
Kendall says: “No and low-alcohol wine hasn’t really taken off, despite some launches in this category and despite more of a focus from retailers.
“The category is still very small in relation to total still wine and it does appear there is more activity in the lighter styles, such as 8% Moscato, than in no and low as such. Again, retailers tend to be pushing this but consumer demand is still relatively low.”
But Eisberg alcohol-free wine brand manager Fran Draper says the alcohol-free wine category is surging while low-alcohol wine suffers.
Sales of market leader Eisberg are up 30% in value (Nielsen, year to June 21) and Draper says: “This shows a demand for alcohol-free options, so consumers can enjoy the ritual of the pour, the pleasure of the glass and the taste of Chardonnay, Riesling, rosé and Cabernet Sauvignon, safe in the knowledge that it’s alcohol-free. During January, many shoppers will be taking part in a January detox or charitable events such as Dry January. This means they will be curious to try ‘adult’ alcohol-free alternatives if they haven’t before.”
South African supplier Brand Phoenix once placed great emphasis on the low-alcohol wine category, but has now pulled most of its lines after deciding UK consumers would never have a huge appetite for it.
Fellow supplier Origin Wines is still keen to grow this category, but says it needs to be merchandised differently.
Owner Bernard Fontannaz says: “The main factor is positioning on- shelf to get exposure and awareness. We need to be next to cider and RTDs as we are aiming at the same consumer profile.
“As we are hidden away in the wine aisle we cannot access our target consumers. We also need to find a place in the fridge in shop.”
But he adds: “Flavoured drinks are doing extremely well and our low-alcohol fruit cocktails, such as Keep Light and Be Fair, fit the bill, plus we are offering another dimension at Origin because we are Fairtrade.
“Fairtrade fortnight [February 23 to March 8, 2015] should be an excellent opportunity to give exposure to a drink which is fitting the current trend.”
Draper agrees lighter drinks could be given more of a push during this period. “We see an uplift in sales of Eisberg when the product is clearly signposted as alcohol-free or situated end of aisle,” she says. “In addition, grouping products with a natural synergy leads to impulse purchases that inevitably increase basket spend.
“Consumers are becoming increasingly demanding, looking for new and exciting flavours to enjoy at home, even through the January detox season. We need to help them with new ways to enjoy their favourite drinks. We have created mocktail recipes with an expert mixologist that will help the more adventurous consumer enjoy the wines through multiple serving suggestions.”
Lindsay Castling, brand manager for Estrella Galicia, is confident alcohol-free beer will continue to grow sales in an increasingly health- conscious Britain.
Its alcohol-free variant was given a big marketing push this year and is going from strength to strength in the on-trade. Castling says: “With increased visibility and sampling we are starting to see sales increases, although not huge, in our bottle sales to the retail channel and we are confident the brand will enjoy significant increases over the next 12 months as we continue our activities.”
Non-alcoholic beer is growing in popularity among British drinkers as one in seven bought into the category in the past year, according to new Mintel figures.
It is most popular among 18 to 34-year-olds, where 26% of consumers
bought into the category, compared to 14% overall.
Mintel analyst Jonny Forsyth says: “Non-alcoholic beer has huge long- term sales potential. This is an area of innovation that all major brewers [and retailers] should be focusing on as consumers want reassurance of product quality – something trusted brands can provide.”
But Mintel says the UK still lags way behind other European countries, particularly Spain, on alcohol-free beer.
Castling says: “In Spain alcohol- free accounts for approximately 11% of total beer sales, with the Spanish consumer demanding a quality taste profile. This is where Estrella Galicia 0.0% can hold its own as it maintains the bitterness of an alcoholic lager and has the seal of approval from a demanding consumer, something that is translating well to the UK.”
She adds: “I believe more visibility and sampling for these products is needed so consumers can see there is a socially accepted alternative that tastes good. The retailers need to
get behind the products and show the consumer that the alcohol-free category exists, instead of relying on the consumer to ask for the product.
“Consumers are increasingly health conscious and it has become more popular to meet for a soft drink or fruit juice. An alcohol-free beer gives the adult market its own soft drink and offers that placebo effect of enjoying a refreshing beer without the dangers of alcohol consumption, but with the added health benefits beers have always offered.”