Mixed Thoughts on Success of Nonalcohol Beer

Some see category growth, while others cite 'a slow build'
Photograph courtesy of Anheuser-Busch

CHICAGO  Demand for lower- and no-alcohol adult beverages is growing, according to Gary Hemphill, managing director of research for New York-based Beverage Marketing Corp. But it hasn’t taken off yet for all convenience-store retailers.

Younger drinking-age consumers are behind this demand, Hemphill said, which is resulting in more innovation in beers, spirits and wines with low or no alcohol by volume (ABV).

Anheuser-Busch’s Brewers Collective, a group of craft breweries from across the country, introduced six new low-ABV or nonalcohol brews in January. Breweries in the collective are owned by St. Louis-based A-B but operate as autonomously as possible to keep their culture and creativity, according to Joy Young, senior director of innovation for the Brewers Collective.

Young said the Brewers Collective has been working “feverishly” in the low- and no-alcohol space. They define low-alcohol beers as having a 0.51% to 3.5% ABV, while no-alcohol beers have an ABV of 0% to 0.5%.

The health-and-wellness movement has been spurring the growth in the category, she said. “Our focus on no- and low-alcohol beers is really about opening up to more occasions, more moments when people can actually enjoy our products,” Young said.

Whether someone is trying to decrease their alcohol intake or wants a lighter beer to enjoy during a high-energy activity, having lower-ABV options opens these drinking occasions, she says.

The Brewers Collective has seen an uptick in 2019 of double-digit growth for the first time in several years in the no- and low-alcohol categories, Young said. Part of A-B’s overall goals is to have at least 20% of its volume be no- and low-alcohol drinks by the end of 2025.

While there may be some growth in the category, Erick Dowling, adult beverage and lottery category manager for Maverik, said it hasn’t taken off at his stores.

Nonalcohol beers make up less than 1% of category sales for the Salt Lake City-based chain, Dowling said; however, pitches for nonalcohol or low-ABV beers have increased recently, he said.

“It seems like [nonalcohol beer is] making bigger headway, especially as it does better in on-premise,” Dowling said. “But I’m a firm believer that it has a place to play on-premise. I keep seeing data that millennial consumers want a [nonalcohol] offering that still reminds them of a beerlike drink, but every time we’ve tried it, it just seems to fall flat on its face. It’s just not something that the consumer really grabs at this point.”

Dowling said he carries a few no-alcohol beers, including Heineken-owned Lagunitas Hoppy Refresher, Heineken 0.0 and Anheuser-Busch’s O’Doul’s. He also plans on adding Molson Coors Beverage Co.’s Coors Edge.

Michael “MJ” Simons, category manager for Brentwood, Tenn.-based Mapco Express, said he doesn’t carry any no-alcohol or low-ABV beers.

“I am keeping an eye on it, but with the limited amount of space and all the new innovation coming out this year that I wanted to take advantage of, I do not see the results that I could use to justify inclusion,” he said.

Dowling said he’ll keep trying the nonalcohol beer options.

“I think it probably will grow­­ eventually," he said. "It has just been a slow build for sure."

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