No & low alcohol beer will be vital to category’s growth in the US, reveals latest OPM analysis

The increasing popularity of Dry January amongst consumers has highlighted that the no/low alcohol beer segment is no temporary trend. Lower alcohol options within beer could win over consumers who aren’t traditionally engaged with the category and ensure growth as beverage preferences continues to evolve.

Beer is a category well known for its broad variety and range of options. Now, this steadfast favorite is evolving to meet the needs of consumers who are looking for lower alcohol alternatives. ABV (alcohol by volume) within beer, particularly craft varieties, has always pushed the boundaries in terms of strength. However, as demand for alcohol alternatives grows, lower ABV options within the beer category are becoming more readily available to keep pace with changing tastes and to appeal to a new set of consumers – who may not have been engaged with the category previously.

 

At the end of 2021, CGA’s On Premise Measurement service (OPM) reveals the no/low alcohol segment within beer was worth just under US$100m in sales compared to US$99m at the end of 2019 – demonstrating that the segment has recovered back to 100% of its pre-COVID-19 levels. OPM data also highlights that no/low is also one of the fastest growing segments within beer, increasing by 96% in the latest 52 weeks, further demonstrating that this is not a temporary trend for the category.

 

OPM is the only fully projected, extensively validated, measure of beverage alcohol performance in the American On Premise. Used to track share and trends by all the leading beverage suppliers, OPM is the most robust view of sales performance for bars and restaurants ever produced in the US.

 

From a consumer perspective, engagement with this segment has only grown, with the percentage of beer drinkers consuming no/low alcohol beer increasing from 12% in Fall 2019 to 16% by Fall 2021. Intriguingly, beer drinkers have also been experimenting with other no/low alcohol categories. The no/low spirits segment has seen engagement grow from 8% in Fall 2019 to 11% just two years later, while no/low wine saw consumer engagement increase from 8% to 13% in the same time period. Beer drinkers have even increased their engagement with mocktails, from 8% in Fall 2019 to 13% in Fall 2021, highlighting that there’s obvious demand for better-for-you alcohol alternatives in the On Premise – and particularly within beer.

 

Within the no/low alcohol beer segment, there are also substantial opportunities for new entrants to solidify a place as a major supplier. At the end of 2019, the top three brands within the segment accounted for a 60% share, and by the end of 2021 this had only grown to 70% – making the no/low alcohol beer segment significantly less competitive than other segments within the lower alcohol space.

 

All evidence suggests that the no/low alcohol beer segment will continue to strengthen its position within the category as consumer demand for alcohol alternatives continues to grow. Using OPM data, CGA will continue to track the evolution of this segment, and the impact that new innovations will have on the category’s share.

 

Patrick Bannon, CGA Client Director, Americas, said: “No/low is clearly becoming a more popular choice for On Premise visitors, and in particular beer drinkers. It will be interesting to see how beer drinkers’ tastes and preferences evolve over time within this segment.

If beer manufacturers can reproduce some of the great tasting beer that consumers know and love as no/low alternatives they are putting themselves in the best position for success. As strategies will need to adapt to an ever-changing segment, we at CGA will be keeping our finger on the pulse of the beer category through our OPM read as well as more valuable areas such as BeverageTrak.”

 

For further details on CGA’s On Premise Measurement solutions, along with support in understanding trends at category, segment and brand level within the On Premise, contact Matthew Crompton at Matthew.Crompton@cgastrategy.com

Related posts:

Share post

Archive

Subscribe to our newsletter

Access the latest On Premise news and reports by signing up below.