Saving ‘no & low’ alcohol from stagnation

I might be an outlier, but I’ve got an uneasy feeling about growth prospects for no & low alcohol. And that is because of similarities in the dynamics currently impacting the performance of plant-based meat alts.

In recent months sales of plant-based meat alts have tumbled, with declines felt across key markets including the U.S. and U.K. This is not where we wanted to be with sales barely achieving 1.5% of global meat revenue. Perceived as poor value, sensorially inferior and very much a substitute for the real thing, Deloitte has already warned that ‘the addressable market’ for plant-based meat is probably much less than we thought.

Officially, the no & low glass is still half full. IWSR is projecting +7% CAGR right through until 2026. Demand is increasing as far afield as Asia, where mindful drinking is fueling equally bullish projections. These buoyant predictions rely on a combination of existing buyers coming back and buying more often as well as an increase in overall buyer numbers. But what if these assumptions are flawed? What if a significant number of previous buyers were on a curiosity trip? What if the ceiling for no & low is much less than we thought?

Attracted by faster growth rates, manufacturers have landed a huge amount of rapidly improving innovation – led by Heineken’s brilliant 0.0 effort. And yet the sector remains fairly small – at best, just 3.5% of the volume consumed in alcohol.

For manufacturers in the no & low space, I suggest that we don’t assume that growth will come. Rather, we work to mitigate the risks of a plant-based style meltdown, activating new strategies, such as the five outlined below.

That said, the comparison to wine indicated on the label (‘Functional Wine Alternative’) is problematic because it creates expectations. A few people in the office became spectacularly unstuck upon first sip because the liquid experience is nothing like wine. For pioneers like Three Spirit, there is an obvious tension between trying to help consumers understand where and when the new product might be suitable whilst at the same time trying not to mislead. Here, a promise of sensory discovery could work. Regardless, these products certainly raise the bar and must be applauded.

My work examining the prospects for food tech (think cultured meat and animal-free dairy) has revealed just how powerful words can be. Different frameworks generate wildly different intentions to trial. Working with behavioral scientists I’ve also learned that framing a new sector as an alternative to an existing one or defining a new sector by what it isn’t (e.g. alcohol-free) is to set it on a path of being forever subservient to what came before.

Dash Lilley, co-founder and Head of Product at Three Spirit told MMR’s No & Low Show that ‘no & low, alcohol-free and non-alcoholic are all a bit clunky, and imply inferior substitution. Names set expectations, and I think we can do better.’

And I really think we can, but it will take a combined industry effort to propel this high potential sector into more positive territory. Frames such as ‘new wave’ or ‘next-gen’ beverages have the power to release no & low from the shackles of substitution. In Germany, several no & low beer brands have positioned themselves as ‘sober sports drinks’. Could this be a contributing factor to that country’s world-beating levels of household penetration?

The prospect of stagnation should make sobering reading for companies who have publicly declared sales targets for alcohol free. Let’s be clear, no & low remains high potential territory – not least because of people’s more intentional approach to well-being.

So, to protect future growth prospects, I urge consideration of some of the additional measures that have been outlined here. Because in a world that’s increasingly thirsty for experiences, we must avoid consumer perceptions of pale imitations – which rarely flourish in the longer term.