Insights & Trends
The Rise of the Non Alcoholic Drinks Industry
We’ve been watching the popularity of non-alcoholic drinks grow over the last 3 years, and according to new research commissioned over the last 8 months, their time has finally come.
hA Global Story
We’ve been watching the popularity of alcohol-free drinks grow over the last 3 years, and according to new research commissioned over the last 8 months, their time has finally come.
With London leading the way and Los Angeles not far behind in terms of non-alcoholic drinks growth, we commissioned IWSR and CGA to closely examine the market and provide us with first-of-its-kind data. Here are a few key insights and findings extracted from our research.
In light of their continuous efforts towards wellness, increased curiosity and demand for greater product and flavour choices, consumers continue to lead the changes in both the hospitality and drinks industry.
The current market.
A large percentage of restaurants based in both Los Angeles and London are taking full advantage of this shift to no and low drink consumption. Customers now have more choice, with dedicated non-alcoholic cocktail menus as well as a wide selection of sophisticated non-alcoholic spirits, aperitifs, beers and fermented drinks. Non-alcoholic Gin has proven to be particularly in demand.
With availability growing steadily, the popularity of these alcohol-free alternatives is only set to increase. While innovative bars and restaurants are fully seizing this opportunity and providing their customers with a myriad of choices, there are still many who have yet to engage with the non-alcoholic trend, and adoption across the board is still a way off.
- 55% of the most influential bartenders in London, Los Angeles and NYC believe the no and low ABV trend will grow in the next 12 months.
- 83% of bar managers in Los Angeles think non-alcoholic cocktails are part of a growing trend with over 40% of restaurants in Los Angeles now offering a non-alcoholic specific drinks menu. We see that bars and restaurants are on board with this trend and offer non-alc drinks to consumers, but there are many who are yet to be convinced by this trend.
Specifically, 71% of bar managers we interviewed in New York said they don’t see non-alcoholic cocktails and drinks as part of a wider trend. However, our statistics and research tell a different story. We believe that New York bartenders don’t see the full potential of non-alcoholic drinks in the future based on opinion rather than fact.
We surveyed 76 cocktail bars and restaurants in LA and 75 in NYC and we found that there’s not much difference in sales and performance between these two locations.
In fact, LA has generated $1.273 mil in non-alcoholic drinks sales while NYC has generated $1 mil in non-alc sales, not far behind in terms of sales performance.
Even though the US is expected to lead in non-alc sales and performance, at this early stage, trends seem to be led by London.
- In April 2018, there were just four non-alcoholic spirits on the market in the UK. By October, just 6 months later, there were 42.
- 55% of venues are either dedicating sections of their menus to non-alcoholic drinks or creating stand-alone menus for them.
- 23% of the most influential venues in London report better sales of non-alcoholic drinks in the last year than ever before.
There’s a market shift towards non-alcoholic drink consumption. We can see through our research that habits and preferences in types of drinks are slowly changing and consumers are asking for more choice. In the UK, 59% of people are ordering non-alcoholic drinks on nights out when they usually drink alcohol, compared with only 29% who are drinking solely alcoholic drinks. We see that consumers crave variety in choice out of curiosity and out of wanting to drink responsibly without missing out on the social experience.
Non-alcoholic drinks as seen from a consumer perspective
The industry perspective is that growth in non-alc drink consumption is expected across the world, as a huge cultural shift is happening. Interest is demonstrated by the growth of Seedlip amongst influential bartenders and high-end accounts. Non-alcoholic spirit cocktails have been featured on the menus of some of the most prestigious bars in Hong Kong, Australia and Western Europe.
Curiosity and interest in non-alcoholic spirits have grown since our last report on non-alc growth in 2017. There’s a demand for quality non-alc spirits and beverages as well as better flavour, as:
- 58% of consumers are drinking more no and low-ABV drinks than last year.
- In the UK, 59% of people are ordering non-alcoholic drinks on nights out when they are also drinking alcohol. Having an option that tastes the same as an alcoholic beverage, or even better, is a great win for non-alc drinkers.
This trend is not about not drinking at all but about having more choice in drinks without giving up your social life.
- Specifically, 61% of consumers in the UK want better non-alc choices in drinks.
- Consumers are interested in drinking less alcohol without sacrificing their social life. Our data shows that 43% are going out drinking at least once a week, and are taking advantage when non-alcoholic drinks are available.
Online searches with the word ‘mocktail’ are up 42%, suggesting that consumers are looking for ways to drink less alcohol without sacrificing social experience.
Distill Ventures - an accelerator of brilliant liquids.
Distill Ventures is actively investing in brands which fulfil the need for more non-alcoholic drinks brands and is always seeking new investment opportunities in this area.