The challenge of building brand equity in the no and low alcohol drinks market

Nostalgia for holidays and a desire to broaden horizons will influence the way consumers choose wine when restaurants, pubs and bars reopen.

Dry January and health kicks give drinks brand owners new opportunities in the fast growing no and low alcohol category—and CGA’s new BrandBuilder solution can help operators and suppliers meet the challenge of establishing long-term brand equity and resonance in the on-trade.

 

The traditional appetite for abstention and moderation makes January an important springboard for drinks suppliers and operators to position no and low alcohol brands for growth, and soaring interest has led to a sharp rise in choice for consumers. By measuring awareness, engagement and consumption for more than 800 drinks brands, CGA’s BrandBuilder helps businesses understand brand equity and loyalty among target consumers across the On Premise.

 

BrandBuilder has fascinating insights into recent success in the no and low category—despite severe trading restrictions for much of 2020. The category was one of the fastest growing segments prior to the pandemic, with value sales growth of 50% in the year to February 2020. CGA’s latest research shows that on average, nearly two thirds (64%) of consumers were drinking no or low alcohol category brands as, or more, frequently in the On Premise than they were a year earlier—the highest proportion of all LAD categories. Taste (28%), ease of drinking (26%) and brand trust (22%) were the top three factors behind choice.

 

The emphasis on trust means that extensions of existing drinks brands tend to dominate the no and low category, and they enjoy a head start in recognition. But the top five no and low alcohol lager brands all have lower equity scores and NPS ratings than their parent brands—a sign of the challenge of building reputation in a burgeoning category. On average, more than half (54%) of drinkers feel neutral towards no and low brands, with less than a third (31%) showing positivity.

 

CGA’s research also highlights the role of On Premise in building new no and low alcohol brands. On average, three in five (60%) consumers say their experience of drinking a brand when out has contributed towards a positive impression of it—making on-trade experience the most valuable factor in perception.

The On Premise is an absolutely crucial incubator for the no and low alcohol category, for new and established brands alike, and success there invariably transitions to the off-trade,” says Charlie Mitchell, CGA’s research and insight director. “This is a particularly nuanced segment of the market, and with consumers’ attitudes changing so fast, it is vital to understand every brand’s strengths and weaknesses in different sectors, occasions and much more.”

Consumers’ interest has been driven by the twin motivations of health and saving money, which have influenced 38% and 32% of participants respectively. While nearly a third of consumers who had planned to take part in Dry January said they had been put off by the current COVID-19 restrictions, the latest lockdown does not appear to have significantly affected the healthier drinking market, with only one in ten consumers drinking more now than they were during previous lockdowns.

The pandemic has done little to slow consumers’ interest in healthier drinking, and new year’s resolutions are giving the no and low alcohol category another burst of momentum,” says Charlie Mitchell. “Sadly Dry January will be a memory by the time the on-trade properly returns, but with health at the front of people’s minds there will still be huge potential to grow sales in this exciting category over the rest of 2021 and beyond.”

CGA’s BrandBuilder helps businesses build strategies for growth by revealing the who, what, where, when and why of consumer demand. By signalling how to attract new consumers, increase frequency of purchase and generate loyalty, it gives brands a crucial advantage in an ultra-competitive market. To learn more about BrandBuilder, contact Charlie Mitchell at charlie.mitchell@cga.co.uk.

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