For Non-Alcoholic Beverage Brands, The Time Is Now

The global beer market’s fastest-growing segment

Unless you abstained from sports TV this past year, chances are you’ve partaken of at least one commercial for Heineken 0.0—the alcohol-free offering from the world’s second-largest brewer.

The humorous spots feature no dialogue to appeal universally through silent-film situational comedy.

The formula for each ad goes: a person publicly drinking Heineken 0.0 gets approached by someone disapproving, to which the drinker proudly displays that the beverage has zero alcohol. The punchline comes that the drinker’s enjoyment of the beverage has distracted them from some unrelated mistake.

The timely product and smart campaign helped Heineken grow its no-alcohol beer business by nearly 10%, taking advantage of a global boom in consumer demand that has grown 38% in 2020.

While it is true that low- and no-alcohol beer sales account for only a fraction of the $600 billion global beer market, that fraction is expected to surpass $29 billion by 2026 as the fastest-growing segment.

Millennials are quickly credited with bringing about this trend toward healthier alternatives. However a larger demographic exists globally.

Among Muslims and Buddhists, whose faiths discourage alcohol, drinks with greater than 0.03% alcohol are forbidden. Heineken 0.0 is a bold play for this broader demographic.

Why then are they marketing it to Americans? Because people in eastern cultures more readily adapt certain products than the western markets are in the opposite direction.

NA beer is set to grow tremendously in the next 6-7 years as the Muslim people of North Africa and the Middle East (NAME) continue to rise in wealth. They are fond of many things in Western culture, and aspire to raise a bottled beer in a bar—as they have seen in countless popular films–yet they can’t (per their faiths).

Hence, Anheuser-Busch InBev has launched its Budweiser 0.0 in India, and other brands are certain to step up their own 0.0 offerings globally as the category and awareness continues growing.

The largest obstacle in North America is the pejorative view of NA Beer as tasting “chemically.” And they aren’t wrong. Many brands, who will go un-named, strip the alcohol from their vats of product chemically—leaving an unpalatable residue in the flavor.

However you will not experience that unfortunate side effect in German-made NAs such as Clausthaler whose production process is governed by German Purity Law. They create delicious NA beer by using a special yeast that doesn’t yield yeast sugar when and brewing at a super cold temperature to prevent fermentation and the creation of alcohol. Otherwise the brewmaking process is identical to making beer—because it is beer.

Driving the growth of NA in North America are however these crazy millennials with their newfangled ideas about living better lives than the generations before them. They aren’t subscribing to boozy lifestyles. They’re interested in optimizing their time and health. NA offers fewer calories, no sluggishness, and you can drink it while taking part in everything from office work to action sports to purposeful dating.

Global Non-Alcoholic Beer Market size was worth over USD 13 billion in 2016 and will witness compound annual growth rate over 7.5% until at least 2026. The pandemic may even accelerate this.

Despite documented spikes in the market, however, many NA brewers are asleep at the wheel in terms of capitalizing on the marketing opportunity to grab market share. Existing brands don’t seem to realize now’s the time to dust off their brands for a new world.

The days of NA being only for pregnant women and guys in AA are over.

Heineken has done the best job so far of positioning themselves for the next 10 years. Who will be next?

It’s time your brand took the lead.


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