Low– and zero–alcohol beverages in South Africa are fast becoming popular.
While the reasons may vary, globally, research has shown that consumers are becoming less loyal to their favourite alcoholic drinks.
Among other things, this stems from the need to taper off their consumption, the adoption of healthy lifestyles and, in some instances, stringent laws regarding alcohol consumption.
All these factors are likely to boost sales of low- to non–alcohol drinks in many markets, including SA, where the market is still in its infancy.
A Growing Market
A report released in July by Global Market Insights states that the global non-alcoholic wine and beer market is poised to hike from a turnover of around $20 billion in 2018 to over $30 billion by 2025.
The report also states that the beer segment accounted for more than 60% of the non-alcoholic wine and beer market share in 2018.
The Middle East & Africa’s non-alcoholic beer market is anticipated to witness the highest growth potential, with a compound annual growth rate of 7% by 2024.
Rapid adoption due to product legalization by government and religious institutions will drive the regional demand, according to Global Market Insights, a US-based market research and consulting service provider.
In a recent report, research group Nielsen found that 47% of adult drinkers wanted to reduce their alcohol consumption to lead healthier lifestyles in 2019, and South Africa is no different, says SAB, the country’s biggest producer.
No matter what is driving the shift in drinking patterns, one thing is sure: “It has created the opportunity for new beverage categories to emerge, giving brands creative licence to sell a myriad products, from organic to low-carb and no- to low-alcohol beverages,” says Zoleka Lisa, Vice-President of Corporate Affairs and Sustainability at SAB.
SAB is part of Anheuser-Busch InBev (AB InBev), the world’s largest beer maker.
All The Taste None of The Alcohol
In recent years, a number of low– and non-alcohol versions of popular beers, sparkling wine, spirits and most recently cider have been introduced to the SA market as large producers SAB, Distell and Heineken position themselves to gain and grow market share in the lucrative zero-alcohol category. These companies want to give their customers choice, while tapping into a new customer base.
SAB produces non-alcohol beer Castle Free and other low–alcohol beer brands such as Castle Lite, Hansa Golden Crisp, and Flying Fish Chill Lite.
Lisa explains that an alcohol-free beer offers people the freedom of choice to still enjoy the taste and the social nature of drinking beer with their mates, but without the alcohol.
“It also allows the drinker to have a safer consumption experience by practicing ‘pacing’ –alternating the consumption of alcoholic beers with alcohol-free beers as a means of moderation.”
Lisa believes that pacing is one important component of moderate drinking. The practice of pacing allows for safer and smart drinking options, because a lower intake of alcohol over longer periods gives the body time to break down alcohol at a steady rate, therefore accumulating less alcohol in the bloodstream.
Distell and Heineken say their target market is existing alcohol drinkers who want more freedom and choice.
“The non-alcoholic range is targeted at consumers who are driven by a need for self-expression, choice, and the need to moderate their alcohol consumption,” says Distell’s Dennis Matsane.
Distell produces ciders, wines and spirits. It recently launched SA’s first non-alcoholic cider, Savanna Non-Alcohol Lemon. It also produces zero-alcohol sparkling wines under the JC Le Roux brand.
Matsane explains that Savannah Non-Alcohol Lemon was launched as part of an expansion of the company’s product offering to a consumer base that enjoys the crisp, dry and distinctive taste of Savanna, but without the alcohol, with particular emphasis on moderation and responsible drinking.
Heineken says its Heineken 0.0 beer gives consumers options for all their drinking occasions. “This addresses a consumer trend of moderate alcohol consumption,” said Lauren Muller, SA Marketing Manager for Heineken.
Unlike alcoholic drinks, the non– to low–alcohol versions do not attract excise duty tax, but are levied with the recently introduced sugar tax.
Commenting on its growth prospects for low– and non-alcohol drinks, Muller says while that alcohol category is still in its infancy in SA, it holds great potential.
“While we do not have a specific goal for South Africa, globally Heineken has seen strong growth in Heineken 0.0 in Europe and Russia, and in some countries, non-alcoholic beverages can account for as much as 10% of total beer business,” she says.
SAB and its parent company AB InBev wants to increase its portfolio of no– and low-alcohol beers to represent 20% of the organisation’s global beer volume by 2025, Lisa says. This is part of its public–interest commitments made to government.
SAB believes that as the sales of lighter or lower–alcohol beer sales increase, it is a win-win situation for brewers and the public, “as we grow our volumes while reduce the total alcohol consumption in South Africa, meaning a safer place for all”.
Words by Thabiso Mochiko