Big names in alcohol are interested in non-alcoholic drinks

(Toronto) Canadians’ growing interest in non-alcoholic drinks is prompting big names in alcohol to launch sober versions of well-known products like Guinness beer and Tanqueray gin.

“If I were running an alcohol company, this wouldn’t be an area I would ignore,” says Joël Grégoire, associate director for food and beverage at market research firm Mintel.

Surveys in the United States and Canada show that consumers, particularly younger generations, are increasingly reducing their alcohol consumption.

Mintel research shows that about 15% of Canadians aged 20 and over don’t drink at all. There are other consumers, probably many more, who do not completely eliminate alcohol, but who reduce it; they are nicknamed the “sober curious”.

“When you try to develop your brand among younger consumers, who are those who are generally the most open to innovation, that’s where there are a lot of opportunities,” according to Joël Grégoire.

Companies large and small are seizing this opportunity. When Sarah Kate founded Some Good Clean Fun, a website promoting soft drinks and the alcohol-free lifestyle, in April 2021, there were very few products on the market. “Since then, it has exploded,” she says.

Some major brands have been offering soft drinks for a long time, but often it was a single non-alcoholic beer intended to capture a small portion of the market.

“Over the last two to three years, most of the innovations brought to market in soft drinks have come from smaller brands,” says Sarah Kate. She also observed a growing trend in acquisitions of smaller brands, such as Keurig D^r Pepper buying the ready-to-drink alcohol-free cocktail brand Atypical from a Quebec company.

And in 2019, Diageo, a multinational drinks company that includes Guinness, Baileys, Smirnoff and Tanqueray in its portfolio, bought non-alcoholic spirits company Seedlip.

Diageo has launched alcohol-free versions of several well-known products in recent years, making a splash with the Canadian launch of its alcohol-free Guinness in September. She also has a non-alcoholic Captain Morgan Spiced Gold this year, a non-alcoholic Tanqueray gin in 2021 and a non-alcoholic Gordon’s gin in 2020.

Sarah Kate credits Diageo with doing a lot of research into what works in an alcohol-free format and what’s popular.

Asahi launched Asahi Super Dry 0.0% last year, starting in the UK and Ireland, and more recently in North America and other countries. And in January 2022, Corona launched Sunbrew, which contains vitamin D, but no alcohol.

Other companies have launched nonalcoholic drinks that don’t directly imitate their flagship products, such as Molson Coors’ Roxie canned mocktails and Martini & Rossi alcohol-free aperitifs.

The “sober curious” group is growing, especially among younger generations, according to Nadia Niccoli, Diageo’s director of marketing for North America. The COVID-19 pandemic appears to have accelerated this shift, she added, with a growing number of consumers seeking healthier options.

In 2021, a Statistics Canada survey found that one in five Canadians drank less than before the pandemic, and that younger Canadians were more likely to reduce their consumption.

But Sarah Kate observed that in an industry where small producers have been pushing the boundaries for years, the intervention of big brands can be a double-edged sword. She warns that competition from beverage giants can make it more difficult for smaller brands to gain market share.

Nadia Niccoli points out that it takes time and money to develop a good soft drink, especially to reproduce something that many people already know the taste of. Joël Grégoire adds that when brands launch alcohol-free versions of their well-known products, they are taking a big risk, because connoisseurs of Guinness, for example, will likely notice differences between the two drinks.