The low and no-alcohol category has continued its off-trade momentum into 2023, growing in value by 11% against the backdrop of a total alcohol category which declined by 2.5%. The drinking occasion for low/no is wider than ever, with more people choosing to moderate their drinking more regularly than ever before.
In our recent NIQ State of the Nation survey we found that 10% of consumers who are looking to moderate their alcohol consumption are doing so by turning to low-alcohol and alcohol-free alternatives – and we expect that number to increase. The major multiples have clearly seen the value that low/no alcohol products can bring, by increasing presence in their stores with dedicated bays that have been expanding for several years.
Producers have leveraged their full-strength alcohol brands to offer no-alcohol alternatives, alongside independent manufacturers dedicated to the category.
However, the impulse channel remains largely untapped. It currently has just 7.4% value share of the low/no market, compared to 23.2% share of total alcohol.
The fragmented and diverse nature of the impulse channel could go some way to explaining this, but sales and trends over the past year suggest the situation might be about to change.
Growth within impulse has accelerated to 22.9% in the past year, suggesting retailers are giving the category more support. With an opportunity to add an extra £45 million to the market there is significant upside should the channel follow the lead of the major multiples.
James Shillcock, general manager of CleanCo, the largest independent dedicated no-alcohol spirits brand, agrees.
“While grocery retailers have tapped into low/no – with some of the largest stating they want to see 5% of their total BWS sales coming from low/no within five years – convenience is clearly behind the curve,” Shillcock says.
“We have partnered closely with Schweppes to create best-in-class no-alcohol fixtures within the multiples that exploded our rate of sale and could be replicated in the convenience channel.”
It is important to remember that, despite obvious links to Dry January, the category actually peaks during the summer months. Competition for space at this time of the year is tough, but a dual strategy of promoting alcoholic and non-alcoholic alternatives could have a significant upside.
Shillcock adds: “We’ve seen a boom in consumers using our range to create CleanCo cocktails at summer social events such as barbecues and picnics. This is a huge untapped summer opportunity for convenience.”
An ever-increasing number of shoppers are looking to moderate their alcohol consumption. The major multiples have played a key role in heightening awareness and offering a wide variety of options. Impulse retailers should think about how a dual strategy can be used to capitalise on key events during the summer to grow their share of off-trade spend.