Drinkers are seeking to moderate their alcohol consumption without going completely teetotal.
As a result, the non-alcoholic beer and low-alcohol beer (NABLAB) sector has witnessed more than 50% growth over the last two years.
Dry January is approaching as consumers seek to get the year off to a healthy start, giving retailers the opportunity to win with a strong selection of NABLAB brands.
Rory Davidson, Commercial Director at Budweiser Brewing Group UK&I, tells Grocery Trader how retailers can maximise sales around Dry January.
How much is the NABLAB category worth and is it in growth?
Over the last couple of years, we’ve seen the movement towards moderation go from strength to strength, and this has accelerated during the pandemic. As a result, the no-and-low category is now worth £101.6m, growing by 58% since 2019.
What is driving this growth?
The no-and-low category is predominantly driven by consumers moderating their alcohol consumption, rather than eliminating it entirely. One in 10 beer drinkers now regularly opt for an alcohol-free alternative, a figure which has grown by 16% year-on-year. It’s clear that no-and-low is no longer just a trend, but a lifestyle choice for many.
Additionally, 70% of consumers are now looking to be healthier. This is leading to consumers making improved choices with their alcohol consumption with a third of shoppers saying limiting alcohol was an important part of their healthier lifestyle. Often containing fewer calories and less sugar, no-and-low beers are seen as a healthier option for consumers who still want to enjoy the great taste of beer.
How can retailers make the most of the Dry January opportunity?
Dry January represents a huge opportunity for retailers to entice new shoppers into the no-and-low category and retain them all year round. We’re predicting this Dry January to be bigger than ever, so stores need to ensure they have a robust line-up in order to make the most of it.
Providing choice will be key. Consumers will be looking to explore the range of no-and-low alcohol alternatives available, from beers to wines to spirits. Throughout January, retailers should ensure no-and-low options have prominent space on shelf, whilst maximising in-store signage to encourage discovery.
Retailers also need to be aware of broader developments within the alcohol category and how these will impact consumers’ no and low choices. A key trend we are seeing is premiumisation, with super-premium now the number one growing segment in the overall beer category, increasing two times ahead of the total category. The premium no-and-low category is also growing, a significant 23% year-on-year. As such, stocking no-and-low alternatives of consumers’ favourite premium beers, such as Budweiser Zero and Stella Artois Alcohol Free, will be key to retailers’ success this Dry January. Both have proven a hit with consumers, growing significantly ahead of the total no-and-low category and showing triple digit growth across both volume and value.
With three out of five beers now consumed with food, are retailers missing an opportunity to merchandise beer with food? How can retailers better take advantage of this opportunity?
Cross-merchandising food and beer pairings represents a huge opportunity for retailers to boost basket spend. Stella Artois is designed to be savoured with food and is top of mind amongst consumers for four out of 10 meal occasions. The beer’s mild malt and light hops accentuate the richness of dishes such as lamb, lobster, and shellfish without overwhelming the food’s flavour. Retailers can create premium in-store meal deals to tap into shoppers looking to treat themselves on date night, for example.
However, there are also new opportunities for retailers to drive spend around meal occasions with beers and their no and low alternatives. One in two meal occasions are now everyday meals, making them the number one contributor to meal occasion growth. As consumers look to moderate their alcohol-consumption, no-and-low alternatives have a huge role to play in these mid-week everyday occasions, offering shoppers the great taste of beer but minus the alcohol. As such, stores should consider cross merchandising no and low options alongside everyday meals.
We are also seeing consumers increasingly turn to no-and-low alcohol options at lunchtime, 1-in-10 UK adults have consumed a low and no variant with their lunch at home. Including alcohol-free beers in lunch meal deal options is a savvy way for stores to tap into this. Budweiser Zero is an alcohol-free beer with 50 calories and zero sugar, so is a great option to suggest that consumers pair with a lighter sandwich or salad, for example. Merchandising these deals effectively brings new shoppers into the category, in turn driving sales.
Beer also continues to play a huge role in snacking occasions; 82% of consumers said they would purchase a food and snack pairing. As shoppers are increasingly looking for no-and-low options, retailers should include these options in their snacking bundles too. Pairing Bud Light with crisps caters to those consumers having a night in, who wish to enjoy a beer while moderating their alcohol consumption.
How important is brand in terms of consumers’ choice of their NABLAB purchases?
Brand is the most important factor for consumers when deciding which no-and-low product to buy – ahead of calories, ingredients, taste claims and ABV. Retailers should be looking to leverage the popularity of the parent brand to encourage discovery. In-display signage increases awareness of the no-and-low variants of shoppers’ usual beer of choice. This is especially important given half of consumers say they find it difficult to find no-and-low products.
Many commentators would say taste has been a barrier for the NABAB category. Do you think the category is innovating enough to overcome this barrier?
As the no-and-low category continues to grow, so too does consumer expectation. Shoppers expect alcohol-free options that taste just as good, if not better, as their traditional counterparts. Innovations developed at Budweiser Brewing Group meant we were able to brew our two most recent NABLAB launches, Budweiser Zero and Stella Artois Alcohol-Free, to the exact same original recipe with the same ingredients. It’s these taste credentials that have led to both brands becoming market leaders with a strong repeat rate. Stella Artois Alcohol Free, for example, has a 22.4% repeat purchase rate with more shoppers opting for the brand than other alcohol-free beer alternatives.
Our innovation in NABLAB extends beyond taste! During the height of the pandemic, we used excess alcohol from the process of brewing our alcohol-free beers, such as Stella Artois Alcohol-Free and Budweiser Zero to donate thousands of litres of disinfectant and hand sanitiser to health workers and the emergency services. Doing so not only provided key workers with hand sanitiser when demand was high, but also meant we were able to mitigate our waste.
Are brands making the most of the NABLAB opportunity?
The challenge is for brands to meet the growing consumer demand for no and low alternatives, while ensuring that they’re providing quality products. Getting taste right is really important as mentioned, particularly for no and low variants of known and loved brands. We know consumers are increasingly demanding choice, but this can’t come to the detriment of quality. We spent a long-time developing Stella Artois Alcohol Free for this very reason and will pay the same care and attention to all of our NPD.
Are consumers moving towards the premium and super-premium end of the market?
Covid-19 cemented the trend towards premiumisation as shoppers sought out known and trusted brands. Alcohol was one area where shoppers chose to splash out, with 52% willing to pay extra for quality when buying alcoholic drinks to have at home. As a result, the super-premium category is growing 6.3% year-on-year in the Off-Trade and is now the number one growing segment in the overall beer category.
By 2025, we expect 70% of beer consumption to be of the premium and super-premium category so retailers should ensure they are stocking up on a diverse portfolio of premium beers now.
What other long-term trends do you see emerging in the overall beer category?
The pandemic saw consumers drinking habits being driven in-home, due to forced closures of the On-Trade. Even with pubs and bars open, we are expecting a long-term behavioural shift towards at-home occasions.
Looking at these in-home drinking occasions, relaxing and meals are clear winners, making up 40% and 41% of all beer occasions respectively, compared to on-the-go (8%) and socialising (13%). It is here that offering choice will be key. A wide portfolio of beers across premium, super-premium and no-and-low will allow retailers to tap into these occasions and drive sales.
Retailers should also be aware of key cultural moments in the calendar which will boost at-home occasions and ensure they are prioritising the right options on-shelf. From no-and-low options during Dry January, a well-stocked beer fridge ahead of Bank Holidays and sponsorship brands during key sporting tournaments – such as the Budweiser Family, official beers of FIFA 2022 World Cup.