BUYERS' GUIDE TO Drinks Retailing 2019 - Drinks Retailing News
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BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk DrinksRetailingNEWS 3 COMMENT MINDFULNESS IS HERE FOR GOOD REASON Drinks retailers that have noticed sliding sales of beers, wines and spirits might be inclined to lament the chasteness of those pesky millennial and generation Z consumers. “Why aren’t they binge-drinking like their forebears?” they may ask. “And what, pray tell, is a protein ball?” It is easy to blame antipathy among younger shoppers for declining volume sales within BWS: two-fifths of Brits aged 18-24 either do not drink or are trying to moderate their alcohol consumption, according to Kantar. However, it is really interesting to note that the largest group of teetotallers in Britain are women aged 50 and above. They account for a third Contents of all people shunning alcohol. That illustrates just how important it is for retailers to embrace the trend for mindful drinking, as demand is coming from both ends of the spectrum and it is growing each year. When we say mindful drinking, we really mean moderating alcohol consumption. This can take the form of drinking less but drinking better quality, and primarily it focuses on 5 27STATISTICS How the category fared this year – the figures behind KOMBUCHA The fermented tea drink is finding favour in the on-trade – championing low and no-alcohol alternatives. the trends the off-trade is next The craze for mindfulness continues to permeate every facet of British life. Mindful eating is all about chewing slowly and enjoying the taste and texture of every mouthful, rather than just shovelling in food. There is even mindful sex – it involves 6 BEHIND THE NUMBERS Why consumers are prepared to pay more for products that 28 WINE Why lower-alcohol versions need to up their game when it meditation, sensual stories, massage candles, sex toys, calorie meet certain criteria comes to quality counting and, ahem, fur oil, according to The Sunday Times. Some of this noise is easy to dismiss, but mindfulness really focuses on making decisions to lead a lifestyle that is better for the wellness of your body and mind. This is important because 8 CLARIFYING TERMINOLOGY There are calls for definitions around abv to be made clearer 30 LIGHTER WINE The producers pioneering a way of keeping texture and people are living longer in a digitally enabled world, with reams on labelling flavour at lower abv of educational material on wellness at their fingertips. People do not want the quality of their long lives to be diminished. The challenge for producers and retailers is to present drinks that are lower in alcohol or free of alcohol, 10 ROUNDTABLE DRN’s team of experts discuss the importance of making the 31 DRINKAWARE Retailers and consumers alike are inspired by the latest but that also taste great and look great. They really should be category more cohesive campaign presented in environmentally friendly packaging too. Beers, wines and spirits have always flourished on the back of creating a sense of belonging, serving as the glue that holds social situations together. Now the challenge is to replicate 16 LOW-ALCOHOL BEER It’s the sector that’s being held up as the role model for others 32 BUYERS The people who decide what products are best are bravely that with high-quality alternatives that remove the harm and moving forward working together hassle from packaging, and benefit shoppers’ health rather than put it at risk, while adding excitement, Instagrammability, personalisation and customisation. If retailers can crack this trend, the sector should enjoy a long and healthy future. 24 ALCOHOL-FREE SPIRITS In a burgeoning sector, producers are focusing on NPD 34 MERCHANDISING Producers and retailers give some useful insight into Martin Green, editor with benefits ranging in-store Editor Commercial director Drinks Retailing News is circulated to business owners and buyers across MARTIN GREEN SAMANTHA HALLIDAY SUBSCRIPTION all channels of the UK off-trade – championing the off-trade since 1863. HOTLINE: Visit www.drinksetailingnews.co.uk or Longley House, International Drive, 01371 853630 Deputy Editor Account manager follow us on Twitter @DrinksRetailing . Southgate Avenue, Crawley, West SONYA HOOK ERICA STUART Drinks Retailing News is published by Sussex RH10 6AQ Agile Media. Printed by Stephens & George. Repro by Agile Media. Registered as a newspaper at the Post Office, ISSN www.drinksretailingnews.co.uk Art director Publisher 0043-5775 ©Agile Media Ltd. ISTOCK.COM/MARIJA JOVOVIC DRN and Drinks Retailing News are @drinksretailing JAMES DOWN LEE SHARKEY SUBSCRIPTION trademarks of Agile Media. ENQUIRES: £3.50 a copy inc postage. Annual subscriptions: £77 UK, £132 Europe, Sub editor Managing director agilemedia@ecosubs.co.uk £203.50 worldwide email JAQ BAYLES RUSSELL DODD IMAGES: ISTOCK.COM/ WLDAVIES 003 Contents DRN Mindful Nov 2019 SUBBED CORRECTED.indd 3 06/11/2019 14:52
BUYERS’ GUIDE TO MINDFUL DRINKING 2019 DrinksRetailingNEWS www.drinksretailingnews.co.uk 5 ANALYSIS: STATISTICS MAIN FIGURES AT A GLANCE A visual guide to how the numbers stack up for low and no-alcohol 0.7% £22.4 no and low-alcohol alternatives £116.6 £202 represent just a fraction of the BWS category MILLION MILLION growth in the no and low- MILLION the value of the no and low- alcohol BWS category over the value of the adult soft alcohol BWS category the past year drinks category 2% just one in 50 shoppers of alcohol- free BWS have never consumed alcohol 20.4% proportion of Brits who say they are teetotal, including 22.6% of women and 4,000 the approximate number of press 18.1% of men releases DRN receives per day SOURCES: NIELSEN, KANTAR, ONS announcing new alcohol-free drinks 005 Stats DRN Mindful Nov 2019 SUBBED.indd 5 06/11/2019 13:42
6 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk ANALYSIS: RESEARCH BREAKING DOWN THE STATISTICS 006-007 Kantar DRN Mindful Nov 2019 SUBBED/CORRECTED.indd 6 05/11/2019 15:48
DrinksRetailingNEWS 7 Research by Kantar shows that consumers are prepared to pay a premium for products that fit a particular set of mindful credentials. By Martin Green T he no and low-alcohol bottle entirely made of paper. Refillables category has seized are becoming more prominent in £71 million in shopper supermarkets. spend from BWS over “Low and no can offer a lot of flavour. the past year, according to Kantar It can offer the experience of having an alcoholic drink, but being either low or Low and no can offer a lot data. Andy Crossan, alcohol insight no-alcohol. It fits well into the conscious of flavour. It can offer the director at the research firm, addressed a room of mindful drinking enthusiasts at a consumer element. Consciousness will continue to be a driving force for the experience of having an recent Kiasco Research summit on the 2020 consumer. alcoholic drink, but being topic. He reports that only 2% of people “Consciousness goes hand in hand with either low or no-alcohol who bought no and low-alcohol drinks health. On average we are willing to spend over the past year were previously 17p more on a meal when it hits that teetotal. health credential. If it can market itself he adds, highlighting an opportunity for “It’s very rare that people move from and touch upon enjoyment, practicality retailers and for producers such as Big outside the BWS sector into low and and health then a premium is really Drop and Small Beer. no alcohol,” he says. “We know that it’s justified. One example is Nakd bars, which “Spirits at 0% has been a real key younger drinkers who are more likely to sell at a premium of 25% more than your differentiator in the market. It has found dabble in low and no. average chocolate bar, despite being 40% a good niche to go after and is reaping the “It has done well among young and lighter in weight. benefits of it,” he says. affluent consumers. “We can see the parallels you can Crossan adds that the wine trade “For the younger generation, it’s draw from no and low. Justifying a can learn a lot from spirits when it more about moderating. Two-fifths of premium relies on clarity and points of comes to promoting alternative serves 18 to 24-year-olds tell us that they are differentiation.” that help Brits moderate their alcohol actively trying to moderate their alcohol consumption. “Spirits have got ahead of consumption. At the other end of the CHOOSING NOT TO DRINK the game on it,” he says. spectrum, the highest percentage of Kantar surveys 30,000 households on a “Be creative with it and think about teetotallers per demographic group regular basis and monitors why people how you can market your drinks along comes from 50-plus females. They choose not to drink alcohol. “Across all with a soft drink, a mixer, to bring it down account for a third of non-drinkers in age groups, not liking the taste is either in abv and bring it down to that lower Britain and that is growing. number one or number two in the list of alcohol. “We have younger drinkers reasons,” says Crossan. “That is the biggest “Wine with a mixer is growing at 8.1% moderating, and the older generation hurdle that alcohol brands and no and year on year. It’s a good area for wine to cutting out alcohol altogether.” low brands have to get over. look into, considering spirits is cracking Crossan is keen to point out that the “The good news is in 2017 a fifth of this sector considerably at the minute. average modern consumer is “very consumers said they didn’t buy non- The occasions that it attracts are upbeat conscious”. He does not simply mean alcoholic and low-alcohol beers because and about socialising, an area in which that they are awake, rather that they are they didn’t like the taste, whereas in our low and no-alcohol does very well. mindful of the drinks they consume and most recent survey the highest answer for “It also attracts younger consumers – the purchasing decisions they make. people who drink them is because they 41% of still wine serves with a mixer are 18 “One third of shoppers try to buy taste really good. Although there’s a long to 35. It could be about taking your brand, products with environmentally friendly way to go in this area, it’s very interesting which maybe doesn’t have the credentials credentials,” he says. “Almost half of that it is shifting in a positive direction.” of a no and low, but think about how consumers believe that manufacturers Many brand owners ask Crossan if you can reinvent it with a serve to attract should be leading on reducing use of shoppers are picking up alcohol-free beers moderators, because there is a massive plastic. Carlsberg has brought out a by mistake, thinking they are alcoholic. opportunity to capture moderators “Well if they were, there’s a pretty high through spritzers in particular. percentage coming back, and that is a key “A higher percentage of those drinking trend in this area,” he says. “If you can get these drinks are happy to consider low your taste right, in terms of non-alcoholic and no alcohol and they are trying to beer in particular, the repeat rates tend to moderate. The average trying to moderate If you can get your taste be very high. A few brands are touching is 40%, but it’s 51% in this area. 50% on their own in this area, so there’s an “For the conscious consumer, there right, in terms of non- opportunity in that.” is a pattern developing – younger alcoholic beer in particular, He points to Adnams Ghost Ship consumers moderating and older ISTOCK.COM/ ARTHOBBIT alcohol-free as a good example of a brand consumers leaving alcohol. The 2020 the repeat rates tend to be enjoying strong shopper loyalty in this consumer is very conscious, and that will very high space. “There is nothing that premium continue to drive decision making in the within no and low-alcohol beer and cider,” future for purchases.” 006-007 Kantar DRN Mindful Nov 2019 SUBBED/CORRECTED.indd 7 05/11/2019 15:48
8 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk ANALYSIS: LABELLING CLARIFICATION CALLED FOR ON DEFINITIONS OF LOW AND NO ISTOCK.COM/ KHOSRORK D At the moment, product rinks producers reacted with dismay labelling is dependent last year when a on a variety of abv Department of Health consultation resulted in percentage levels, which no change to guidance creates confusion for all around labelling of no and low-alcohol drinks. That maintained a frustrating involved. The general status quo. Under current guidance, only consensus is that greater beers and wines of up to 0.05% abv can be labelled as alcohol-free. Those with guidance is needed. an abv of 0.5% to 1.2% should be labelled Martin Green reports as low alcohol. Anything between 0.05% and 0.5% is supposed to be described as de-alchoholised. This is problematic for producers and retailers as it creates confusion among consumers and stifles growth in an important category. In Germany a 0.5% beer is labelled alcohol-free and in the US it is referred to as non-alcoholic. This is ISTOCK.COM/ CHAMPJA because a beer or wine at 0.5% abv has no physiological impact on the body. It is too weak to affect the blood alcohol level, and is safe for drivers and pregnant women to enjoy. Yet they are often left concerned by the product being described as low-alcohol rather than alcohol-free or non-alcoholic, and that deters them from making a purchase. Orange juice typically has an abv of 0.5% as a result of natural fermentation, as does a banana and a loaf of bread. “You can currently buy kombucha that’s 1.2% abv in Waitrose without age ID, so who knows what the rules really are at the moment?” asks Laura Willoughby, Everything 0.5% and below ISTOCK.COM/ ROWAN JORDAN should be no-alcohol. That’s where it is across the rest of the world 008-009 Labelling DRN Mindful Nov 2019 SUBBED.indd 8 06/11/2019 13:43
DrinksRetailingNEWS 9 founder of consumer group Club Soda. The Department of Health has seemingly realised that its decision not to change the guidance is an error, and it has just finished another consultation with Public Health England about the benefits of telling people that drinks at an abv of 0.5% and below are alcohol-free. “I am hoping it will come out with the right suggestion, bearing in mind one of its strategies is to promote more low and We feel strongly that more no-alcohol as a way of helping people reduce their drinking,” says Willoughby. support should be given to “Everything 0.5% and below should be the development of low and no-alcohol. That’s where it is across the no-alcohol drinks because ISTOCK.COM/ DEAGREEZ rest of the world. At the moment, when producers are asked about it being 0.5%, of the role they play in they go, ‘oh I don’t know, it’s the same as a banana’, and everyone panics. encouraging people to drink “Spain and Germany have such responsibly buoyant, accepted alcohol-free beer markets, because the pregnancy groups, the driving groups, the government and greater clarity as they make purchasing everyone else were aligned on what was choices.” alcohol-free, how much you can drink Willoughby can offer some intriguing and these were OK if you’re pregnant and examples of just how muddled the driving and so on. current guidance around labelling is. “It’s a bit ridiculous anyway, because “At the minute, as an alcohol-free beer they’re only guidelines. It’s up to Trading you have to say what you are [alcohol-free Standards to decide on. There’s no or low-alcohol]. But if you are a soft drink, comeback at the minute. Nobody has told the rules don’t apply, you can be 0.5%,” anybody off, nobody has asked anybody she says. “Equally there’s no sugar tax on to re-label their products. Nanny State Kopparberg alcohol-free, because it’s an [which is 0.5% abv] is still called alcohol- alcohol-free cider, but if it was a soft drink free on the label. If a minister can be kept it would have sugar tax. in the Department of Health for long “So every soft drink should call itself enough it might help.” an alcohol-free version of an alcoholic drink to get out of sugar tax, and every BACKING CHANGE alcohol-free beer should call itself a soft ISTOCK.COM/ FYMSTUDIO Some producers of 0.0% abv have drink and then it can have whatever abv warned that it would be misleading on it,” she says. “That’s the weird situation and dangerous to refer to 0.5% abv at the minute. beers as alcohol-free beer. However, the “Consistency around messages needs British Beer & Pub Association and the to change. I hope that will change. If the Portman Group have backed a change government really thinks people are at in guidance. “We’re seeing a real boom risk when consuming things at 0.5% abv, in the popularity of low and no-alcohol then it really needs to look at other drink products,” says Portman Group chief types.” executive John Timothy. “The impending The government is a bit tied up with expiration of current guidance around election fever and Brexit right now, their definitions has acted as a catalyst for but it should eventually get around to a rethink of descriptors for this important tightening up its alcohol strategy and category of drinks. labelling guidance. “We feel strongly that more support “Once it has changed, the sector needs should be given to the development to come together and work out how of low and no-alcohol drinks because it talks to those other key influencers of the role they play in encouraging in the sector, to have a very clear and people to drink responsibly. There are consistent message,” says Willoughby. currently four descriptors in use, which “Who looks after this sector? There isn’t are confusing for both producers and a trade association in place. The existing consumers to navigate. trade associations such as SIBA have some “Bringing the UK’s alcohol-free responsibility in this space, but there are ISTOCK.COM/ VIKTOR_GLADKOV threshold up to 0.5% from where it some new things to discuss, and nobody currently sits at 0.05% will bring UK is bringing the concerns up for wider regulations in line with existing practice discussion. in the majority of European countries – “There will be perception hurdles as this will create a level playing field for UK well as regulatory hurdles that need to producers and will also give consumers be discussed.” 008-009 Labelling DRN Mindful Nov 2019 SUBBED.indd 9 06/11/2019 13:43
10 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk SEEKING COHESION IN A FRAGMENTED CATEGORY While it’s a tiny market at the moment, no and low-alcohol is only going to grow, our roundtable experts agree. But the trade needs to work together to properly define the sector and ensure a smooth journey into the future. Martin Green reports from the event ANALYSIS: ROUNDTABLE THE PANEL ZOEY HENDERSON RICHARD JONES LAURA WILLOUGHBY DAWN DAVIES MW Head of operations, Redemption Managing director, Reh Kendermann Founder, Club Soda Head buyer, the Whisky Exchange 010-015 Roundtable DRN Mindful Nov 2019 SUBBED CORRECTED.indd 10 05/11/2019 15:50
DrinksRetailingNEWS 11 S ales of beer, wine and With thanks to our partner group of alcohol-free, gluten-free, vegan spirits are declining Black Tower and associate bars; Richard Jones, managing director of each year as sponsor Big Drop Brewing Black Tower supplier Reh Kendermann increasing numbers of and chairman of Yapp Brothers; Nick Brits strive to Worthington, commercial director at Big moderate their Drop; and Laura Willoughby, founder alcohol consumption and lead healthier of Club Soda, an organisation of 45,000 lives. Drinks retailers can help preserve members that encourages mindful the future health of our industry by drinking and runs festivals to that end. championing the mindful drinking Willoughby’s research suggests that movement that is sweeping the nation. 8.6 million people are moderating their Sales of low and no-alcohol alternatives drinking this year, and she aims to create account for just 0.7% of the BWS category, a society in which nobody has to feel out while annual sales of adult soft drinks of place not drinking. She is concerned currently stand at just £202 million per that nobody is looking after this sector, year (Nielsen and Kantar). However, and no trade body is taking ownership there is a great deal of potential for this of it. “There are perception hurdles as flourishing sector. Consumer demand well as regulatory hurdles that need to be is rising, it has the potential to offer high discussed,” she says. margins and it is important for retailers to back it from a responsibility standpoint. DISJOINTED SECTOR Yet right now the category is The no and low-alcohol sector certainly embryonic, muddled and fragmented, so seems extremely disjointed. There is little it is important to bring the trade together consistency around merchandising in the to share best practice and to work on a retail channel, shoppers are often unsure blueprint for shaping a successful future. With that in mind we assembled THE VENUE where to find these drinks and terms such as low-alcohol and alcohol-free can be a heavyweight panel covering many Thank you to Vagabond Wines confusing for consumers. The pricing is different facets of the trade to discuss the for hosting DRN’s roundtable polarised, with alcohol-free wine typically discussion about mindful drinking. potential of this sector and how to ensure selling below £4 per bottle and the likes that it thrives long into the future. of Seedlip, Ceder’s and Aecorn pushing It comprised: Dawn Davies MW, head VAGABOND towards super-premium price points. buyer at the Whisky Exchange and Charlotte Street, London The category clearly has a long way Speciality Drinks; Freddie Cobb, buyer vagabondwines.co.uk to go, and there are many obstacles at Vagabond Wines; Zoey Henderson, to be overcome, but the trade clearly head of operations at Redemption, a recognises its potential. “I am seeing increasing sales and increasing numbers of products coming through, but I am seeing increasingly bad products and I am seeing a need for more clarity around the topic,” says Davies, who launched Seedlip The messaging, the at Selfridges and then at the Whisky Exchange when she changed jobs. education and labelling are Henderson adds: “It’s in such a unique in a bit of a mess right now, place and it’s in such infancy. The messaging, the education and labelling but it will become much are in a bit of a mess right now, but it will clearer in future become much clearer in future. We have to drive it.” NICK WORTHINGTON FREDDIE COBB SONYA HOOK MARTIN GREEN Commercial director, Big Drop Buyer, Vagabond Wines Deputy editor, DRN Editor, DRN 010-015 Roundtable DRN Mindful Nov 2019 SUBBED CORRECTED.indd 11 05/11/2019 15:50
12 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk Davies is pleased to be making high margins by selling drinks that mimic spirits, but unsure if it is ethical. “I wonder if no and low is ripping off the consumer,” she says. “We make very high margins on no and low. It is huge. It’s good for me to make a higher margin, but is it right?” Jones argues that the trade needs higher-margin products if it is to survive, and urges buyers to champion this category. “The drinks industry, compared with a lot of retail industries, especially in the off-trade, has one of the lowest margins,” he says. “One of the reasons there are very few large specialist chains left in the industry is that it’s not sustainable to run a shop on the margins that are currently out there. As an industry we need to have exciting products that enable the trade to actually make a living. “At the moment, if you look at the commercials of running most drinks companies, as a specialist it’s extremely difficult to make a living. As a grocer it’s great, because if people buy a whole basket of groceries and then add alcohol to it, that’s an additional sale. But if you are surviving purely on selling alcoholic products, the industry really needs another 10% margin to be really healthy. It’s great if they are offering that margin. Take it.” CRUCIAL ALTERNATIVES Jones has worked in the wine trade for more than 40 years and he believes low and no-alcohol products are crucial to its sustainability. “This is really critical for us, particularly for the wine industry,” he says. “Having had a glorious 50 years of growing wine sales as it was demystified and the supermarkets started selling it and sales grew enormously, wine sales have been reducing for at least five years now, and we need to sell something. Lower alcohol is don’t dealcoholise, we don’t extract, we Davies: “We have how we can offer alternatives.” don’t use reverse osmosis – we go through to be responsible as Cobb worked in wine production the full brewing process and you end up buyers to give the before becoming a buyer at Vagabond, with a beer that tastes like a beer and you consumer a good and he says he is still to find an alcohol- are not compromising at all. product” free wine of the requisite quality to stock “We make beer to taste like beer, but and put on its Enomatic machines. “I’m without the alcohol, and we are very yet to taste anything that we would be much quality driven. Looking after proud enough to put our names to, so yourself is a massive trend now, and not that’s a concern,” he says. “ drinking no longer carries a stigma. It The beer category has enjoyed greater seemed to be ridiculous that there wasn’t success within the low and no-alcohol great beer out there without alcohol in it, sector as it has come closer to replicating so we created Big Drop. the taste, texture and experience of drinking a lager or an ale. “Beer seems “The demand is there now from consumers for quality products.” The whole soft drinks category to be the easiest transition for people to Redemption was ahead of the market understand,” says Worthington. “As long as there are brews out there that taste when it first launched bars selling alcohol- free drinks and vegan, gluten-free food needs to be flipped on its pretty close to alcoholic beer. It’s about choice, not compromise. You don’t have to six years ago. “Now, thankfully, the trends have caught up with our offer and we are head. No retailer worth its salt compromise on flavour or quality, you just open up a choice of having alcohol or not. very much on brand,” says Henderson. “At the start it was all about imitating alcohol should sell cola or lemonade “When you are naturally brewed – we and imitating meat, as that’s how you get 010-015 Roundtable DRN Mindful Nov 2019 SUBBED CORRECTED.indd 12 05/11/2019 15:51
DrinksRetailingNEWS 13 Natuero by Torres is also a very good product. “It’s not all about replicating, but giving someone who normally drinks alcohol the experience of drinking alcohol, getting as close as possible to that sensation in terms of taste and texture. It’s hugely important. It’s less important for someone who was never a drinker.” Cobb adds: “The low and no-alcohol wines I’ve tasted just don’t have the texture and mouthfeel. People are moving away from crisp, light wines such as Pinot Grigio. They want something that has a bit more body to it. Not necessarily more alcohol, but more body, texture and mouthfeel to it.” REDUCING SUGAR Some producers use sugar to provide texture when creating alcohol-free drinks, but Redemption is also a sugar-free bar. “A big reason for people not drinking alcohol is they want to reduce their sugar,” says Henderson. “We know how much sugar alcohol contains. It’s finding that balance and finding products that can mimic the flavour profiles and textures of alcohol without using sugars. “But for us it all boils down to education, because people are unaware of the percentages, what’s in the drinks, how to drink it and how to mentally assess price points. With vegan food, people attributed the meat on the plate to the value, but it’s actually the creation of the dish and the flavours, and with non- alcoholic drinks it’s the process, the herbs, botanicals, textures and flavours. All of those combined. You have to start a whole new education process. “The whole soft drinks category needs to be flipped on its head. No retailer worth its salt should sell cola or lemonade. Henderson (top comes to communicating with consumers They’re not good products. They’re full right): “You have to in the no and low-alcohol sector. people into it. But ultimately many people of chemicals. They’re bad for you. If the start a whole new “Some of the companies in the spirits don’t want imitation. other drinks on your menu are shining education process” industry are masters of branding,” “Some people still want something that examples of provenance and taste, and he says. “Diageo [which recently took tastes a bit like rum or tastes a bit like gin, then you automatically stick cola on the over Seedlip] is probably one the best and you get those flavour profiles. Then menu, that’s got to stop.” branding companies in the world, but it you get the plant spirit category, where Jones is also keen to point out that also has the financial resources to invest they are more like botanical tinctures. It’s alcohol-free and low-alcohol wine allows massively. The wine industry is incredibly a cross between alchemy and mixology, consumers to significantly cut back on fragmented. There are hundreds of and it sits in a different category.” calorie intake. “Zero-alcohol products thousands of wine producers, and the Davies agrees with this sentiment. tend to have about less than half the investment in brands is relatively small, “They are two separate categories and calories of the full-alcohol product,” because no company has the financial they need to be looked at in very different he says. “Our 5.5% abv wine has only 55 might of Diageo to do it. ways,” she says. “It has to be two very calories, and our zero-alcohol wine has 45 “The company with the largest market distinct things to educate the consumer in calories a glass. With the average 13.5% abv share in the UK is 5%. That compared the right way.” wine, you are probably looking at about to most FMCG sectors is very small. The biggest obstacle for her is texture. 135 calories for a dry wine. Trying to get new concepts to consumers “With no alcohol in it, texture is often “Alcohol carries twice as many calories requires communication. The fastest an issue,” says Davies. “Texture is really per gram as sugar, because the calories way is advertising. If you’ve got a very important in the whole experience of are very concentrated. For those who are small budget, it’s much slower and more alcohol. The only product I have come reducing calorie count, low or lower are difficult to get the message across, so across that gives me texture and good extremely good.” you’ve got to be very canny. We have a flavour is Aecorn. That’s really interesting He appreciates that spirits and beer very fragmented industry. and a really important part of the journey. have an advantage over wine when it “There will be very exciting things 010-015 Roundtable DRN Mindful Nov 2019 SUBBED CORRECTED.indd 13 05/11/2019 15:51
14 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk that suddenly poke their head up. Seedlip demand has not followed through, but it’s Cobb: “People are home will be crucial to the success of the is one of the most interesting things that changing this year. The on-trade is now moving away from category, particularly for the drinks that has happened, because it has created looking for better quality. crisp, light wines mimic spirits. “Aecorn and soda is simple, its own category. It’s another Hoover or “The retailers were quicker onto the such as Pinot fresh, low-sugar, low-calorie, easy to make. Dyson or Biro, it really has been very trend than the on-trade, but the on-trade Grigio. They want Those simple serves are very strong in the clever. is now catching up.” something that market. That’s why gin has done well.” “Trying to do that in wine is very has a bit more body She believes it is the big brand owners difficult. The brands are all quite small. SERIOUS MOVES to it” that will drive growth in this sector. Beer is four times bigger than wine is in Jones believes the grocers are now taking “Why are Moët, Tanqueray and Cîroc so this sector because the big brands are this category very seriously. “There is now popular?” she asks. “They have marketing behind it.” a specific buyer for low and no-alcohol budgets and advocates such as Beyonce. Most major brewers have piled into wine,” he says. “The beer buyer will buy The hope is that with Diageo now taking this space and secured listings with the the low and no-alcohol beer. A wine buyer on Seedlip, that may change. It is doing multiple retailers, but Worthington warns will be given certain countries to buy, that mass market branding. The big brand that this is not necessarily beneficial for and tacked on will be low and no-alcohol. owners will drive the mass market. the future health of the category. There is some thought being given to “There are some awesome brands “The big brands are behind it, but it, and most supermarkets now have that are doing some funky stuff that is that’s not always good,” he says. “They some sort of low and no section. It might changing the industry and how people often don’t know what to do, and they just be wine, or it might be all together. perceive wine. They are making it more dealcoholise it, and you end up with a The consumer now has something that consumer friendly and reducing alcohol poor product. Their consumer has to is reasonably well signposted. Lower- levels. Wine is not standing still, it’s just compromise, and it doesn’t always help alcohol will tend to be put into the main working in a small parameter.” the category. category as a sub-category. In the earlier Yet she argues that buyers need to “We were told by one of the big retailers days, it was a real problem. You don’t serve as gatekeepers for the category recently that if one of the big guys came put it with Coca-Cola, because it’s a very and ensure that it retains integrity going in with their alcohol-free version of their different drink to the soft drinks. forward. “It cannot go the way of gin. biggest selling product we would be out “The major retailers are taking this the door immediately. We know that very seriously, because they are selling product coming out would not even be more and more each year. Money drives a fifth the quality we have put in, but it these things, and space. We have probably has a brand name. There is a risk in the been through the most difficult stage – the beer space that the big brands are piling infancy, where people weren’t quite sure We see multiples with their into the retail space and squashing out – and now people are sure, and we see a the earlier alcohol-free brands that were lot of big multiples with their own-label own-label range, but for the more craft and quality driven. range, but for the category to grow you category to grow you need “The retailers were quicker to pick up need brands, because they tend to be on consumer demand than the on-trade. more innovative, more exciting.” brands, because they tend The on-trade has been much slower and Davies says that promoting simple to be more innovative the barriers have been up. The consumer serves that shoppers can easily make at 010-015 Roundtable DRN Mindful Nov 2019 SUBBED CORRECTED.indd 14 05/11/2019 15:51
DrinksRetailingNEWS 15 There are gins out there that are not the law tells me a product is. We have space,” she says. “You could do tastings of fucking gins, because they have no juniper to be responsible as buyers, to give the your ranges. We know that if you do a beer in them. If we don’t act now, the industry consumer a good product and to help tasting or botanical tasting, these events will be 10 miles down the road. the consumer to understand what are full. People will buy a brand of alcohol “If it’s not a gin, it shouldn’t be referred that product is. We are responsible as they haven’t tasted before, because they to as a gin. You can liken it to something. I retailers and bars for the consumer, but know what it does. They won’t spend said to one producer, I am not going to sell the producer has a responsibility to say, £1.50 on an alcohol-free drink unless they your product, because by EU definition ‘this is my category, is this an acceptable know they definitely like it, which is why you cannot call it a triple sec, you cannot product?’ and then drive it.” we do the festivals.” call it a liqueur, because you are by law Henderson was impressed by wrong, and if I don’t stand up for that then MARKET DRIVERS Sainsbury’s decision to launch a pop-up I am allowing these people to do what Worthington believes the category bar in London called the Clean Vic. “That happened with gin. They are changing the will be driven by a combination of was an amazing thing to do,” she says. labels now, because I said it’s illegal, you PR, marketing, online activity and “The smaller brands can piggyback on can’t do this. It’s up to me as someone who Willoughby: partnerships between suppliers and that. If big brands are smashing loads of knows what the law should be to help “Supermarkets retailers. “Communication is definitely marketing budgets and having celebrities safeguard the consumer. actually have a lot an issue in a retail environment,” he says. endorsing low and no-alcohol brands and “There have to be rules put in place, of space. You could “Online it’s easy, because you can present putting huge spend on online advertising people defining what is an alcohol-free do tastings of your more information about the product than and above-the-line advertising, then that’s product. I have to stand up for what ranges” what’s just on the pack. Driving trial is educating consumers, and they can then big for us, because once they taste it they get into the smaller brands.” say, ‘wow, that is not what I expected, it’s She feels many of the challenges much better’.” that dogged the sector in its infancy are Henderson says sampling can be starting to be ironed out. “It has been a tricky in a retail space. “It’s difficult in a logistical challenge,” she says. “We now supermarket environment, because you use a non-alcoholic wholesaler we can get get a thimble of it, it’s warm and it’s not all our products from. At the start there very exciting,” she says. “You want it in were independent brands, and you would a nice glass with a garnish. Retailers can have their product in for a couple of work with brands to do little pop-ups and weeks, then you couldn’t get hold of them, masterclasses, to get the people from the then they would disappear, you would be brand in to give the staff an education. waiting for the next batch to be made. That’s really important, to give that “In its infancy there were so many support. problems with routes to market. “The brands can then use their online Low and no-alcohol wholesalers have space to build resources, and there’s also been a massive help, because you can a responsibility of working with PR and get it all from one place. That’s a huge press to create more noise about it, and to barrier lifted.” have more mindful drinking festivals, to This trend for moderation looks likely to re-educate people about it.” accelerate in the future and it is becoming Willoughby has seen multiple retail easier than ever to make a success of it. buyers join her group to research Retailers that embrace it could reap the what consumers want in this space. rewards in the years ahead. It might even “Supermarkets actually have a lot of help them stay in business. 010-015 Roundtable DRN Mindful Nov 2019 SUBBED CORRECTED.indd 15 05/11/2019 15:51
16 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk ANALYSIS: ALE HOW BEER GOT T he early-1980s comedy sketch show Not The Nine O’Clock News captured the public RECAST AS A LOW mood around alcohol-free beer in a spoof commercial for Barbarian, a send-up of Barbican, then the market AND NO ROLE MODEL leader in the UK. You can find it on Youtube. The sketch sees Rowan Atkinson impersonate Lawrie McMenemy, the football manager who advertised the real thing, in a voiceover for a film in which Atkinson and co-stars Griff Rhys Jones and Mel Smith play a Once little more than the butt of many jokes, this category has group of dockers working up a sweat during a heavy shift. now become a hero of the reduced-abv movement, showing how They retire to the pub at the end of it’s possible to retain flavour and quality in the absence of alcohol. the day for a glass of the beer which the voiceover tells us is “clear, cool, flavourless Nigel Huddleston reports but, above all, refreshing, pint after pint”. The trio then demonstrate its cool, refreshing properties… by pouring it over their heads. Cut to Atkinson in a bath of the stuff and the commentary advising: “But mind, don’t confuse it with beer.” The sketch summed up the feeling 016-020 Beer DRN Mindful Nov 2019 SUBBED CORRECTED.indd 16 05/11/2019 15:58
DrinksRetailingNEWS 17 CORE PRINCIPLES Not only have low-alcohol beers changed by four factors: lifestyle, health, religion and beyond recognition but the range of reasons for drinking occasions.” seeking them out has widened as well. Graham Archibald at Morgenrot adds: What was once a single-function product – “It started with the health-conscious and looking like you were having a beer when you abstainer, but there is undoubtedly a younger had to drive home – is now a multi-purpose one. generation who aren’t as interested in alcohol John Hadingham, managing director of as previous ones helping to drive further Suffolk’s St Peter’s Brewery, which has been interest and growth.” seeing success in supermarkets with its Rob Fink at Big Drop says: “In a customer Without alcohol-free brand, says modern survey we found that only a fifth of health concerns are playing more into the respondents chose not to drink alcohol at all. hands of completely alcohol-free products than Most are simply looking at ways to moderate the low-alcohol band above 0.5%. their drinking without giving up beer altogether. “There is more interest in 0.0% and 0.5% abv “The underlying reasons for that could be than the low-alcohol sector, with one in three general health and wellbeing or any number of young adults shunning alcohol and one in five specific things, such as training for a sporting British adults now being teetotal,” he says. event, corporate policy for working hours or “The surge in demand is definitely driven pregnancy.” – but the category as a whole is enjoying ACTION POINTS FOR RETAILERS massive growth on the back of huge TOP TIPS shifts in consumer drinking habits and perception of such products. What’s more, the products themselves “Just as you’d make suggestions have actually changed. The fashion for on alcoholic drinks, start driving bigger, bolder flavours in full-strength interested consumers to your no and beers have inspired a new generation of low ranges. Consider shelf-talkers, brewers to create low-alcohol brews that signage and in-store promotions deliver more character and body. that drive trial. For smaller stores, The 0.5% abv specialist Big Drop is tastings are a great way to dispel just one example, adopting different any myths about quality and taste. processes from those early Barbicans to Low and no drinks are a world apart get flavour and body into the beer rather from how many of us may remember than take it out. ISTOCK.COM/ MARTIN-DM them, thankfully.” JOHN HADINGHAM, ST PETER’S INNOVATIVE TECHNIQUES Founder and chief executive Rob Fink “As with any drink sector there is says: “There’s a world of difference good and bad out there so make sure between what we do – brew to strength about alcohol-free and low-alcohol beers you try before you buy. Even better, so there’s no extraction of alcohol after at that time: that they were laughable, get some of your customers to blind the event – versus what other brewers do pallid imitations of proper beer, even taste some. We’re confident our with, say, their reverse osmosis kits. the landfill lagers that were increasingly beers will more than stand up. If you “We’ve developed innovative taking hold of the UK market. can start by offering three or four techniques and turned to ingredients Nearly four decades of knocking at the differing styles that really deliver that include specialist yeast and grain door later and low-alcohol and alcohol- on quality, you can then adapt and selection – more than 20 different free beers appear finally to have made it expand where necessary. A quality varieties – with brewing temperatures over the threshold from joke category to lager has to be the first concern, then that, well, go against the grain. become serious contenders for British a weizen and maybe then look at a “We sometimes add lactose which consumers affections. couple of craft ales.” boosts the mouthfeel and avoids the In the UK, Barbican has been consigned STEPHAN KOFLER, watery texture that blights many alcohol- to history – though the brand is still KROMBACHER UK free beers.” brewed in Dubai and popular in Malaysia Martyn Railton, managing director at “Take the time to understand what speciality beer importer Euroboozer, says it is you’re offering your customers. its sales growth in no-low was around Engage your suppliers in training for 500% in 2018 and that’s accelerated to your staff and activations for your 650% this year. customers. Also think about ranging. Railton reports particular success for We’ve developed innovative These options aren’t ‘diet’ or ‘light’; gluten-free low-alcohol beers from Stiegl they’re first and foremost for drinking in Austria and a 0.3% range from Mikkeller techniques and turned to occasions, so they should be treated of Denmark. ingredients that include as such. Think about milk: full-fat “No and-low alcohol lagers and wheat and skimmed sit side by side, not in beers have been the early pacesetters but specialist yeast and grain completely different aisles.” I think we’re seeing different beer styles selection JAMES GRUNDY, SMALL BEER and abvs now fighting back,” he adds. “The depth of beers now available 016-020 Beer DRN Mindful Nov 2019 SUBBED CORRECTED.indd 17 05/11/2019 15:58
18 DrinksRetailingNEWS www.drinksretailingnews.co.uk BUYERS’ GUIDE TO MINDFUL DRINKING 2019 DEFINITIONS With the market for lighter abv drinks diversifying at a rapid pace, descriptions such as “no-alcohol”, “alcohol-free” and “low-alcohol” are often used as if they are interchangeable. The Department of Health & Social Care issued new “descriptors guidance” in a bid to help consumers and businesses make sense of this area in December 2018. The definitions it lays down are paraphrased as follows: n Low-alcohol: 1.2% abv or less n De-alcoholised: 0.5% abv or less and only applied to a drink where the alcohol has been extracted n Alcohol-free: 0.05% abv or less where the alcohol has been extracted In addition, the term non-alcoholic shouldn’t be used in conjunction with a name commonly associated with an alcoholic drink, hence Heineken 0.0 is more accurately alcohol-free than non-alcoholic. ISTOCK.COM/ TERO VESALAINEN There are exceptions around spirits which makes the whole new Seedlip-inspired category a hot potato and one reason many brands in it shy away from using the word “spirit” at all. In addition, all products, whichever slot they fall into, are and the innovation being shown from more on low-strength lagers, particularly required to state their actual abv brewers is remarkable. alternatives to big brands such as anyway, or that they contain no “Our range now includes more than 20 Budweiser Prohibition, Peroni Libera, alcohol where they don’t. different beers and we’re always actively Heineken 0.0 and Beck’s Blue. The new guidance was issued last on the lookout for others.” Fink at Big Drop says Sainsbury’s recent year and replaced legal definitions that had been in place since Its recent deal to represent the Danish pop-up, alcohol-free Clean Vic pub in 1996 under the Food Labelling brewer To Øl in the UK has brought the London’s Holborn was a sign that multiple Regulations. Effectively, the labels producer’s 0.4% abv Under The Radar buyers are starting to “get it” more but are now voluntary and offer more into the fold. thinks independent retailers have been wiggle room for producers, but “We now have no/low-alcohol wild fruit central to helping the category diversify. local trading standards will use beers and stouts too,” adds Railton. “This He adds: “At first, I was often met the guidance to “help determine sort of thought, creativity and innovation with a blank look, even from the compliance” where they believe around low-alcohol beers has never been most progressive of independent craft labelling is misleading, inaccurate seen before so it’s a great time to drink beer shops. or unclear. The quasi-voluntary nature of the beer, whether you want alcohol or not.” “Now, after just three years, it would be guidance, bending to convention pretty unimaginable not to have a decent rather than rules, is why some RISING TO THE CHALLENGE alcohol-free section in a craft beer shop brewers freely move between There’s little doubt that some and the multiples are playing catch-up the categories even where their supermarkets’ support for low-alcohol on that. abvs don’t match the prescribed beer, with dedicated bays and greater “We’ve always aimed to give people definitions. For example, Big Drop choice, have propelled the category choice so they can still drink whatever calls its 0.5% beer alcohol-free, as forward over the past five years or so. style of beer they like, whenever they like, does Adnams with its 0.5% version of Ghost Ship ale. Railton thinks the low-alcohol rather than being forced down the route Big Drop’s Rob Fink says: challenge is now being taken up further of not-so-great-lagers. “There’s a big education piece and, down the retail food chain. “We’re expanding our range with a whether talking to trade contacts “When it comes to the big brands, new Golden Ale, available in 50cl bottles, or customers, there are plenty of the supermarkets are leading the way in and a series of 0.5% abv collaborations myths we like to bust. Alcohol-free terms of volume, but when it comes to with well-known breweries to broaden doesn’t necessarily mean it has choice, variety, different beer styles and our craft credentials, so that their to be 0%. An abv of up to 0.5% is limited-edition beers, independent bottle customers can better understand that the universally acceptable, with plenty shops and online retailers are doing a alcohol-free label no longer means worty of unlabelled foods having a similar or higher alcohol content, such as fantastic job,” he says. or watery.” ripe bananas and burger buns.” Multiples’ ranges still tend to focus It’s also just released a quartet 016-020 Beer DRN Mindful Nov 2019 SUBBED CORRECTED.indd 18 05/11/2019 15:58
20 DrinksRetailingNEWS www.drinksretailingnews.co.uk BUYERS’ GUIDE TO MINDFUL DRINKING 2019 of collaborations – with Fyne Ales, and make a decision on the low and no- Fourpure, Harbour and Salt – comprising a raspberry gose, a black IPA, a hibiscus alcohol beers of today, not the dross of the past,” he says. SMALL BEER saison and an India pale lager. “While I’m sure many people will still The thirst for lower-strength Lowlander added a Wit Beer to its prefer a full abv drink, many are realising alternatives to mainstream alcohol brands has seen a surge in alcohol-free range of botanically-brewed that they don’t want or can’t afford the popularity for beers above the 0.5% beers in the spring, joining American Pale alcohol hit every time. abv low-alcohol cut-off but below Ale, IPA, Winter IPA and Poorter. “In these scenarios, it was probably the 3% abv level that traditionally Founder Frederik Kampman says: better before to have a cup of tea or a soft typifies “proper” beer. “The switch into low/no is being led by drink. Now that is not the case.” One brewer, Small Beer, has even 18 to 24-year-olds. But while the trend Morgenrot, which handles appropriated the generic name for towards moderation is being led by Krombacher’s UK distribution, launched such products that dates back to younger consumers it is gaining traction the Dutch brewer Vandestreek’s the 18th century for a range that Playground Non-Alcoholic IPA this year comprises 2.7% abv Steam, 2.5% with the mass market and more affluent abv Session Pale, 2.1% abv Lager consumers.” and has now added a raspberry and and 1% abv Dark Lager. German brewer Krombacher extended blueberry sour beer called Fruit Co-founder James Grundy says: its UK range this year with the launch of Machine. “We see ourselves as lower-alcohol, Pils 0.0% and Weizen non-alcoholic in Sales director Graham Archibald which is entirely different to low. In response to market demand. says interest in it has gone “through our minds, low suggests that the Stephan Kofler, sales and marketing the roof”. abv is the leading factor for what’s director of Krombacher UK, concedes He adds: “Let’s be honest, the being served. We prioritise flavour that some shoppers and retailers might choice when it came to the no first and foremost, and then work extremely hard to achieve this at a still need convincing. and low- alcohol category was sociable strength.” “I would tell them to give them a try pretty dismal up until three or Surrey brewer Hogs Back has four years ago. It was almost a opted for 2.8% abv for its mid- badge of shame buying a no- strength proposition Little Swine alcohol beer. ale. “The landscape is massively “The starting point is that I’ve not different now with some incredible yet tasted a 0.5% beer that offers Let’s be honest, the choice innovation, meaning the choice in all the flavour,” says chairman Rupert Thompson. terms of quality and beer styles on when it came to the no and offer to consumers is staggering. “They are getting better, definitely. But there’s a trade- low- alcohol category was “The trend for health continues off between living with a decent to be a big driver of the category pretty dismal up until three but without the investment from flavour that isn’t exactly what you’re looking for, and having less or four years ago brewers in quality, we would never alcohol.” be where we are today.” 016-020 Beer DRN Mindful Nov 2019 SUBBED CORRECTED.indd 20 05/11/2019 15:58
22 BUYERS’ GUIDE TO MINDFUL DRINKING 2019 www.drinksretailingnews.co.uk ANALYSIS: ALCOHOL-FREE SPIRITS FUNCTIONALITY IS and floral flavours; and Joy, a blend of floral notes and a subtle damiana scent with a citrus and berry finish. The drinks have recently been THE WATCHWORD launched into the on-trade and online retail. Also new for autumn 2019 is Amplify, which claims to bring “a unique taste and strong attitude” to the market. Like traditional spirits Amplify is distilled and made with ingredients Spirits without alcohol may appear an odd concept, but producers such as juniper berries, coriander seeds, are focusing on delivering NPD with ‘benefits’, says Sonya Hook angelica root, lemon peel, lemongrass and ginseng root. The drink is recommended T served with tonic, but it can also be used he idea of a spirit premium craft spirits and high-quality Alcohol-free spirits as a base for a number of classic cocktail being “alcohol-free” mixers. These two trends have helped are enhanced by recipes. Amplify has already secured may not have made cement a rapid consumer acceptance of the use of premium listings in Morrisons stores, priced at £15 sense to consumers a this fledgling category, so much so that mixers a bottle. few years ago, and since Seedlip first introduced the concept Clare Gibson, marketing director, says: indeed many are yet to of a spirit without alcohol four years ago, a “Amplify is all about making the most of discover the concept. huge wave of newcomers has emerged. your experiences. Amplifying your senses Unlike beer and wine however, alcohol- In this month alone a number of new without the alcohol, which means you free spirits have the advantage of being products have appeared in this space. are sharper, more in the moment and just one component in a drink, with Senser Spirits is one of these, and the able to take in your surroundings. It is a premium mixers working to enhance the brand currently comprises a trio of 0% great-tasting, non-alcoholic alternative spirit’s flavour profile while also helping to abv “plant spirits” in 50cl bottles, which which appeals to the young at heart who mask the absence of alcohol. the producer says contains active blends are thirsty for new experiences. Whether And the rise in consumers drinking of natural botanicals to capture the choosing not to drink or overcome with more mindfully – and therefore seeking “spirit” of the plants. curiosity, Amplify is always a positive lower alcohol, lower sugar, cleaner The three in the range are: Power, a choice. The feedback we have had so far ingredients and sometimes alcohol-free blend of bitter orange, spiced cacao and has been fantastic, so we are really looking products – has neatly coincided with a vanilla caramel with a smoked black forward to bringing Amplify to a wider cocktail boom and a growing trend for cardamom finish; Love, which has berries audience as we celebrate our launch.” 022-026 Spirits1 DRN Mindful Nov 2019 SUBBED CORRECTED.indd 22 05/11/2019 15:46
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