Business

More are drinking alcohol-free cocktails, spirits, beer and wine

The non-alcoholic beverage industry has surged in the past year as consumers shift from wine-soaked nights to prioritizing their health and wellness.

While some people decline completely, others switch to drinks that taste similar to their favorite, but without the alcohol. Once thought of as a passing trend – indeed, it can be mocked – there is now modern non-alcoholic wine, beer and desserts – now in bars, restaurants and grocery stores all over the world.

Most consumers of these drinks do not give up alcohol forever. Alcohol analysis company IWSR said that 58% of non-alcoholic and low-alcoholic consumers still drink in moderation.

Jeff Menashi, founder and CEO of beverage company Demeter & Co

The difference now, he said, is that people want “healthier drinking.”

Consumers are willing to pay

Whether it’s gin, tequila, vodka, or rum, non-alcoholic beverage startup CleanCo claims that its line of drinks tastes like the real thing.

Their price points are not different either.

A 700ml bottle of Hendrick’s liquor costs about $40, while the alcohol-free version of CleanCo sells for about $25.

But that doesn’t stop consumers from footing the bill. According to data analytics firm NielsenIQ, sales of soft drinks rose 33.2% last year, with $331 million in total sales.

Sales of non-alcoholic beer and cider grew by 31.7%, but significantly sales of non-alcoholic spirits grew by 113.4% over the same period.

CleanCo’s Alcohol-Free Apple Vodka and Spiced Rum.

Courtesy of CleanCo

The cost is justified by the time and effort required to create a non-alcoholic beverage that tastes, smells and smells the same as traditional spirits, said Justin Hicklin, CEO of CleanCo.

“We use eight or nine … different distillation techniques to be able to extract the flavours,” he said. “This is something very complicated – and very expensive.”

Hicklin said the juniper used in the company’s non-alcoholic gin comes from one supplier in Bulgaria – “the best juniper you can buy.”

CleanCo entered the UK market in 2018 after founder Spencer Matthews saw a surge in the once largely underrepresented industry. The brand partnered with Demeter & Co, which brought the company’s non-alcoholic beverages to the US market in October.

Menashi estimates there are between seven to 10 million potential consumers in the United Kingdom and 12 to 15 million in the United States.

“We are focused on these two markets in the next two years,” he said.

Pricing doesn’t seem to be an issue for consumers at the moment.

Mark Livings

Lyre’s CEO

Bottles of non-alcoholic spirits made by Lyre’s are more expensive. Founded in 2019, the company completed a £20 million ($26 million) funding round in November, with the business now valued at £270 million ($357 million).

“The products contain ingredients purchased from 39 different countries in order to deliver the exact flavor profile,” said Mark Livings, CEO of Lyre. “Some are so complex that they contain over 36 different flavors.”

Livings said the brand is in “excessive growth” mode, with a bottle sold every 30 seconds.

“Pricing does not appear to be an issue for consumers at the moment,” he said.

Interest in Asia and the Middle East

The high demand for low- and low-alcoholic beverages is rapidly gaining momentum in Asia and the Middle East as well.

Available in 60 countries, Lyre’s three largest markets in Asia are Singapore, Hong Kong, and mainland China. The company has expanded into Malaysia and eight countries across the Middle East, which have strict regulations against alcoholic beverages.

“We are taking a completely different path [there] Livings said of how we take in the rest of the world. “We do this respectfully… to make sure we comply with all local laws and all… sensitivities.”

Lyre’s non-alcoholic gin, called ‘Dry London Spirit’, is the company’s most well-known product in the UK.

Courtesy of Lyre’s

It’s an exciting time for the global spirits industry, which will add “an additional two billion people,” Livings said.

“You’ll see high-income or wealthy people prioritizing their health, but now it’s starting to seep into all consumer groups,” he said.

Age is another factor. According to research published by the International Journal of Drug Policy, younger people, who have grown up during the wellness movements promoting plant-based and organic foods, are drinking less alcohol than generations before them.

However, not everyone uses non-alcoholic spirits. Hong Kong’s Darkside, ranked 49th best bar in the world in 2021, relies on ingredients like coconut water, Sichuan pepper, and kombucha rather than alcohol alternatives.

“We work with kombucha because it not only creates flavour, but we’ve also noticed that a lot of the reasons people don’t drink alcohol during social gatherings is because they are on a detox diet, an alcohol-free diet, or pregnant,” said Arcadios Rybak, bar manager. In Rosewood Hong Kong where Darkside is located.

“These categories of guests tend not to put away the beneficial kombucha,” he said.

Not for everyone

Although soft drinks have become “more of a habit than an anomaly”, Singapore’s Eunice Tan said, not everyone is inclined to try it.

Tan said she does not like the taste of alcohol, so products that mimic the taste of gin or bourbon will not appeal to her.

Lyre’s non-alcoholic Spiced Cane Spirit is one of the best sellers.

Courtesy of Lyre’s

“Because I’ve never been drunk before, I don’t know what ‘original’ or ‘fuss’ tastes it gives,” she said. “So no, I wouldn’t go for an alcohol-free alternative…unless I’m having a house party, and I want to cater to my guests.”

Some non-alcoholic drinks aren’t completely alcohol-free either. Non-alcoholic beverages are defined as containing less than 0.5% alcohol by volume, according to the IWSR. This is one reason why addiction counselors advise people with a history of alcohol abuse to avoid these drinks, although opinions on the issue are mixed, according to the website Alcoholics Anonymous.

More options

Until recently, users could choose from mocktails, soda, juice, or water in bars and restaurants, which wasn’t good enough for some.

“Mocktails have always been so sweet and so petite…I can mix OJ and 7 Up myself,” Tan said. “When I eat out or at the bar, I will appreciate the creativity and thinking from the establishment in catering to adult tastes.”

Cloudstreet’s “Can’t believe it’s not red wine!” Made with cherry juice, pink pepper, and mushroom syrup.

Courtesy of Cloudstreet

Dan Dworkin, director of food and beverage at The American Club Singapore, said the response was positive after the social club introduced non-alcoholic spirits from British brand Seedlip.

“If you have a tonic and a gin made with Seedlip gin, you’ll feel like you’re drinking the real deal,” he said.

In addition to health and religious reasons, he said, people order these drinks because they don’t want to “appear out of place while out with friends or colleagues.” Others, he said, wanted options other than “just a regular soft drink, but something more interesting and subtly”.

Cloudstreet’s “I Really Mead You Right Now” consists of Portuguese honey and flowers.

Courtesy of Cloudstreet

Some restaurants, such as Cloudstreet in Singapore, pair non-alcoholic drinks with food.

“We didn’t want to exclude our non-drinking guests from the full experience,” said Vinodan Philo, Cloudstreet’s Group Beverage Manager. “We even offer … pairings in the same wine glasses for consistency.”

the cost? An additional S$128 ($94) per person.

Philo said customers pay more dollars because the drinks contain ingredients such as Portuguese honey, lapsang sochong (a type of black tea), pink pepper and mushroom syrup.

DarkSide in Hong Kong has three non-alcoholic drinks on its menu.

Courtesy of DarkSide

According to the IWSR, the trend in non-alcoholic beverages shows no signs of slowing. The beverage analysis firm expects the industry to grow 31% by 2024 as more bars and restaurants bring in soft drinks.

“I remember going to a restaurant 20 years ago that didn’t offer a vegan option,” said CleanCo’s Hecklin. Likewise, “bars will not survive today if they only pay with alcoholic beverages.”

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