How the spirits category can master moderation in changing times

You’ve probably noticed a shift that’s becoming impossible to ignore in conversations about On Premise trends – moderation.

Well, it’s not a blip or a passing phase. It’s a fundamental shift in how consumers are approaching their drinking habits. 

This is clearly demonstrated by the fact nearly a quarter of consumers (24%) say they’re drinking less alcohol overall. And moderation is the second biggest reason spirits are seeing a decline. (Other key factors are decline in footfall and spend, changing occasionality, and category switching.) 

Notably, these aren’t isolated numbers. They paint a picture of a population becoming more intentional about what they consume.  

But what does this mean for the spirits category? And more importantly, how can we adapt to reframe this challenge into an opportunity? 

What’s driving moderation 

You can’t debate moderation and its impact on the spirit category without first skimming beneath the surface of what’s behind it.  

Take popular podcasts like Diary of a CEO, Feel Better, Live More and ZOE Science & Nutrition. They’re influential to the point they’re shaping consumer behaviours and preferences. And there’s no denying health-conscious living is now mainstream, with a massive 90% of people who drinking less alcohol doing so for lifestyle and wellbeing reasons. 

But there’s more at play here than health and wellbeing. Furthermore, cost pressures continue to loom large, with over half (54%) of consumers cutting back.  

So, we’re looking at a dual challenge. In short, consumers are drinking less because it’s better for their bodies and their budgets 

Interestingly, younger consumers, especially those aged 18-34, are leading the charge as early adopters of no and low alcohol alternatives, despite not be moderating as much as older demographics.  

This tells me moderation isn’t a rejection of social drinking, but a redefinition of it. 

Tap into the no and low opportunity 

It’s easy to focus on what we’re losing when we talk about moderation. But there’s a flip side to this coin.  

The no and low alcohol category is booming, with total volume up 42% year-on-year and spirits within this segment growing by almost a third (32%). So, rather than resigning ourselves to the decline of spirits, let’s ask ourselves what we’re doing instead to scoop up the following consumer groups: 

• 20% who are opting to drink alcohol occasionally, but will order more no and low alcohol alternatives 

• 15% who are looking for lower abv content 

• 6% who are switching wholly to no and low 

That said, current buy in still sits at around 14% in the UK On Premise, just shy of the approval ratings needed to move from early adoption to mainstream trend.  

So, what does this tell us?  

Unleash untapped potential 

The potential is there. But we need to address the barriers holding consumers back such as: 

• Awareness – No and low options simply aren’t top of mind. 

• Availability – Consumers can only order what’s on the menu 

• Serve strategy – Stylish, Instagram-worthy serves are a must for the high adopting younger consumers who crave a curated experience. 

These are ideal starting points. But they’re not the whole story, because we also need to factor in the time and place. Only by delving even deeper can we, as an industry, begin to leverage the no and low appetite.  

Tailor to occasions 

One thing I’ve learned is moderation looks different depending on the occasion.  

Take formal dining. This is where we see the highest adoption of no and low drinks, particularly among younger demographics. It’s a natural fit when you think about it, because a sparkling water or a sophisticated mocktail pairs just as well with a meal as wine. 

Then, contrast high-tempo, late-night occasions. Here, 18-24-year-olds over-index by +6pp for choosing soft drinks, showing us moderation doesn’t always mean no and low. Sometimes, it’s about stretching out the night and pacing themselves.  

This zebra-striping – where consumers move between indulgence and moderation during the same occasion – requires a refined approach, because there isn’t a simpler, more straightforward solution. 

Operators need to understand these dynamics to activate the category effectively. It’s not enough to stock no and low options. Additionally, they need to know where, when, and how to position them. 

Education is key, and as an industry, we have a role to play in helping venues make these decisions. 

Capture the Value Narrative 

All the same, we should bear in mind moderation isn’t just about what consumers are drinking, but also why and how.  

Cost remains a buying motivator (or should I say demotivator in terms of spirit decline!). And this is where pricing and value perception come into play.  

Yes, operators are feeling the pinch and reporting declining drink sales. Yet this creates an opportunity for the spirits category to showcase value over volume. 

And let’s be clear. Value doesn’t have to mean cutting prices. Conversely, it’s about communicating the quality, experience, and story behind the drink.  

For all these reasons, premium no and low spirits can tap into the same aspirations as their alcoholic counterparts and provide a sense of indulgence without compromise. 

Set rather than follow the trend 

The good news is business leaders are taking notice and 39% of operators plan to expand their no and low ranges. In addition, our latest Global Bartender Report saw bartenders recognising the growth potential too. But they also need guidance to steer a path through this shift.  

That’s where we come in, as industry leaders. And it’s our job to help: 

• Develop category narratives 

• Refine serve strategies 

• Ensure pricing and activation hit the mark 

• Accelerate no and low to protect share 

• Target younger demographic with offerings relevant to their On Premise visits   

• Create a buzz around the presence of no and low products for dining occasions (and identify further opportunities where soft drinks are strong)