Health-conscious consumers make alcohol brands rethink their product line

Health conscious consumers are changing the narrative of the alcohol industry. From Smirnoff to Kingfisher, brands are sizing up their zero-alcohol offerings, with an extended range of products and an advertising pitch that aligns more closely with an alternative lifestyle. The new products are low on alcohol, sugar and preservatives and cater to the growing ‘sober curious’ movement, a cross-generational lifestyle choice that was nurtured in the US, but has since spread worldwide.

 

Sharang Pant, Head-Retail Measurement Services and Retailer Vertical, South Asia, Nielsen Global Connect says, “Non-alcoholic malt drinks is an emerging segment, growing rapidly. It is targeted at the urban consumer looking for an alternative to carbonated soft drinks. Brands in this segment are currently focussing on creating awareness and visibility and rightly prioritising the modern trade channel for driving sales. The channel accounts for 44 per cent of the sales while over 30 per cent comes from the eating and drinking outlets.  Nearly half the segment sales are coming from the states of Andhra Pradesh, Karnataka, Uttar Pradesh and Maharashtra. However, the brands will have to get distribution into other markets and channels to grow further.”

 

Brand behaviour is being shaped by consumers, say marketers. “We are seeing a shift in global consumption habits, where consumers are starting to drink less, smarter and better. ‘Mindful drinking’ has emerged as a strong trend,” said Hayley Read, head of Martini, Bacardi AMEA. An expanded non-alcoholic beverages portfolio also allows liquor companies to tap into a hitherto untapped consumer segment, one that largely frequented juice bars and coffee shops.

 

Companies have introduced a bouquet of products to entice the consumer. UB Group has Kingfisher Radler, a low sugar, natural carbonated malt drink in three flavours. Heineken 0.0 is another and Smirnoff is all set to launch Lemon Pop, a lemon carbonate drink.

 

Ben Verhaert, president –South Asia, AB InBev said, “Majority of the population in India today abstains from alcohol, which is a large segment that has traditionally remained un-introduced to the beer category. For them, we would like to offer the taste of beer that can be enjoyed across different occasions freely and responsibly.”

 

By expanding the brand outside the core circle, liquor companies are doing two things. One, they are plugging into changing consumption behaviour and two, they are finding ways to drive early familiarisation with the brand. These are classic measures that brands across categories have undertaken to stay relevant, in the midst of disruptive market forces, say experts.

 

The non-alcoholic portfolio helps brands cross another hurdle. Many teetotallers do not trust alcohol brands; by expanding the promise, the companies are hoping to bring them into the fold. 

 

 Ramesh Viswanathan, chief officer, New Business, United Breweries explains that many non-drinkers who have chosen to abstain for personal, health or dietary reasons are keen to be a part of the Kingfisher universe as they see it as an aspirational label. The expanded product line helps reach out to such consumers.

 

The challenge however, for alcohol brands, is to gain credence for their teetotaller credentials. Hence Vishwanathan said, “When we started our campaign we talked about Heineken "now you can" in which we have explained about the products and have made it available to them in super markets and stores.”

 

Market leaders are seriously considering the non-alcoholic segment as a scalable option. About half of American adults (and two-thirds of those ages 21 to 34) say they’re trying to drink less, according to data from market-research firm Nielsen.

 

Globally, the non-alcoholic beer category is growing at a rapid pace and is anticipated to surpass $25 billion by 2024. Heineken’s global mandate states it must source 10 per cent of its revenue from non-alcoholic products by 2025. It is already the largest non-alcoholic beer in the world, selling one million cases a month.  For AB InBev no or lower alcohol beer products will make up at least 20 per cent of their global beer volume by 2025. As of 2018, 8 per cent of their global beer volumes came from no and low alcoholic beverages.

 

 

POUR MATTERS

 
  • UB Group has launched Kingfisher Radler, a low sugar, natural carbonated malt drink in three flavours
  • Heineken has brought in Heineken 0.0, made from barley and hops
  • Smirnoff is all set to launch Lemon Pop, a lemon carbonate drink 



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