What’s next for alcohol-free spirits?

In celebration of the launch of KAM’s new low and no research report, we’ve spoken to a number of industry experts to gain different perspectives on the Low and No opportunity. In this blog, Laura Stephen, Brand Director at Pernod Ricard UK, shares her thoughts on why Low and No is growing, and why Pernod Ricard is investing in the alcohol-free spirits category with the Ceder’s brand.

1. What do you think is driving the growth in demand for Low and No? How has the impact of the Covid crisis affected the category as a whole?

“Health and wellbeing have been at the forefront of many consumers’ minds as we’ve all stayed at home. Low/no drinks offer many of the positives of alcoholic drinks – the ritual of preparing it, the feeling of indulgence enjoying it, and a more sophisticated, adult flavour profile than soft drink alternatives.

One of the key benefits alcohol can give is encouraging bonding in group-related situations. This has been of less value during the pandemic as we’ve not been able to spend time in groups outside our own household. Therefore, the lack of this bond-forming benefit is less of a barrier to low/no than it would have been before.

Over the past year, we have seen the popularity of no/low drinks rise further, as consumers embrace non-alcoholic cocktails and experiment with more interesting non-alcoholic serves whilst enjoying the ritual of ‘having a drink’.”


2. KAM research shows that awareness of alcohol-free spirits is growing. How has the category grown and what do you see the role of alcohol-free spirits going forward?

“The no/low movement has been growing steadily over the past 5 years, alongside the rapid growth in interest in health and wellness, which has fuelled consumer trends towards moderation resulting in an increase in people adding non-alcoholic drinks to their repertoires.

The non-alcoholic spirits category is now worth £9m and it continues to deliver strong value growth (+24%)1 as customers and consumers seek out exciting new premium serves to satisfy the growing demand for no alcohol options. CEDER’S is now the No.2 brand in the low/no spirits category2 and it recently won two gold medals in The Spirits Business No & Low Masters.

Innovation is a key growth area and there are a lot of new players coming to market, offering non-alcoholic light and dark spirits that lend themselves to being used in non-alcoholic cocktails, making for an exciting proposition for consumers. In June 2020 we launched CEDER’S Pink Rose, the fourth expression in the range, and this Christmas it became the no.1 value growth contributor across all low/no spirits SKUs.3

3. How and why are people choosing alcohol-free spirits? 

“For many, no/low options are a way to moderate and find balance rather than cut alcohol out completely. Whether it’s to look after their health and wellness, make the most of social moments, or keep a clear head for the next day, no/low drinks allow people to moderate their consumption with something that still gives them an exciting taste experience versus a soft drink.”

4. KAM research shows that alcohol-free options are in demand both in the on-trade and increasing in the off-trade, especially this year as people have spent so much time at home. Is there a place for alcohol-free spirits at home?

“Although the no/low category is growing at pace, it is still a relatively emerging trend so driving brand-in-hand opportunities is key to connecting with consumers through trial and educating them on the perfect serve. Given the current challenges of lockdown, consumers have embraced virtual experiences and Pernod Ricard UK has been significantly investing in providing drinks inspiration to help consumers take their skills to the next level and provide convivial moments.

At the start of January as part of CEDER’S Strike the Balance campaign, we held a Wellness Retreat, the brand’s first virtual event featuring big names from the wellness world including Fearne Cotton, Jasmine Hemsley and Cat Meffan. It was a hugely successful consumer-facing experience that was well received and the live event sold out.

Once restrictions are eased, CEDER’S will be exploring opportunities to engage with consumers through the On-Trade and experiential events.”

5. Where do you see the future of the low and no category? How will it evolve?

“The IWSR recently revised its 2024 forecast of the growth of the low/no spirits category to +25%4 (from a pre-COVID forecast of 42%.) 30% of consumers claim they are moderating their alcohol consumption5 and 18% plan to continue trying more low-alcohol or alcohol-free drinks to reduce their alcohol consumption, showing the trend for non-alcoholic spirits looks set to continue.6

The innate human desire to enjoy ourselves and to bring people together for unique experiences remains very strong, and alcohol has always and will continue to play a big part in this for UK consumers. However, this shift towards seeking more balance in our lives is here to stay and we have seen mid-week wine consumption decline with consumers less likely to drink wine Mon-Thurs than they were in 2013.7

Looking for better ways to enjoy the drinks we love, moderating when we can whilst still trying new and exciting things will be a big driver of drinks trends in the future.”

And there you have it! Thank you for your time and insights, Laura. 

Click here to access our full Low+No 2021 research report (£99) or to find out more about this research.

1 Nielsen – Total Coverage – Value – 52 w/e 26.12.20 2 Nielsen – Total Coverage – Value – 52 w/e 26.12.20 3 Nielsen – Total Coverage – Value – 12 w/e 26.12.20  4 IWSR Forecast – Volume (000 9LCs) – Category Forecasts COVID Market Update October 2020 5 Bonhamy Finch U&A Study 2019 6 Waitrose Food & Drink Report 2021 7 Kantar Worldpanel 2019 – change in wine occasions by time of day and day of week

Blake Gladman

Hi, I'm Blake, Strategy & Insight Director at KAM. I look after all our research products and manage the collection and delivery of insight throughout KAM. I love long runs and good food (the perfect life balance).