Drinks retailing

It’s safe to say that that buyer will either have changed their attitude or been sacked. Retailers across the country are growing their listings of no-alcohol drinks – sometimes dramatically so; a logical business decision that responds to a well-documented shift in consumer attitudes.

The 2024 KAM report into low and no-alcohol found that the number of Brits who drink more than 14 units a week halved in the previous three years. All age groups claim to want to reduce their intake.

“Consumers have never been more concerned by their health and wellbeing,” says Lotte Tregear, director of category management & ecommerce for Red Bull UK. “It’s more important to them than the cost of living.”

But not imbibing elements that they perceive as harmful – such as sugar or alcohol – is only half the story. A growing number of consumers are looking for drinks that aren’t simply not bad for them, but have a positive impact on their health.

Dealing with stress, aiding mental acuity and maximising gut health are increasingly common elements in what Tregear calls a culture of self-optimisation. “Consumers are increasingly asking ‘how can your drink help me with my life?’,” she says.

That pull from the consumers is leading to an extraordinary burst of creativity from within the alcohol-free space, particularly within the functional category. Increasingly wide-ranging in scope, it includes everything from teas with energy-boosting qualities to mood-enhancing lagers and CBD-infused RTD drinks.

“We’re expecting CBD drinks to overtake kombucha in sales,” says Co-op low/no buyer Kristian Atkinson, “which is incredible considering how relatively new the concept is.”

The carbonated soft drinks space is particularly active. According to Mintel, it accounted for 46% of all drinks launches billed as non-alc in 2024.

It all goes to make alcohol-free an exceptionally vibrant part of the drinks world; a rare category in growth, with innovative drinks being launched on a weekly, if not daily, basis.

But unlike established alcohol categories, alcohol-free has little or no regulation beyond basic health and safety requirements. New arrivals are limited only by the imagination and vision of their creator. This can lead to beverages that are fascinating – but also fiendishly hard to categorise.

Robot Kombucha is a good example. Sold in a can featuring a perky cartoon, it’s a million miles away from traditional old-school kombuchas. It’s also organic, sweetened with honey and flavoured with a painstakingly crafted homemade cola essence. The label describes it as both an organic honey cola and a kombucha.

It’s very good, expensive (£4.50 per can), and has been snapped up by Harrods and Harvey Nichols. But is it a soft drink? A drink for children? For adults? A health drink? The answer to all of these questions is “yes”.

Robot might be the most extreme example, but a growing number of drinks that are being sold as alcohol-free straddle multiple categories – particularly in the adult soda or health categories.

In Sweden, Per Godée from Franka Drinks makes a gold medal-winning soda called Nordic Spritz. It uses local berries, has no artificial ingredients and is sweet, spicy and tangy. It is not like any existing alcohol product and there is no logical reason why children couldn’t drink it, beyond maybe finding the flavours too grown up. Godée admits that it is a drink that “bridges the gap between traditional soft drinks and alcoholic beverages”.

“I think the reason some of these brands are selling in the adult section is because they have a focus on flavour and sophistication,” says Gemma Mills of the alcohol-free subscription box business Jomo Club. “They don’t want their drink to be seen as a child’s drink, despite it being perfectly safe.”

Some believe that the terms alcohol-free or non-alcoholic are being used somewhat cynically to cash in on a hot category. “Often [producers] just throw a lot of buzzwords at a product to see which ones stick,” says Denise Hamilton-Mace editor of Low No Drinker magazine. Others feel that using the descriptors earmarks the product as intended for adult consumption.

Brands are adding ‘zero alcohol’ on labels to almost legitimise that drink as a suitable alcohol alternative,” says Mintel food & drink director Alex Beckett.

CLEAR BOUNDARIES

If this makes the AF space exciting, it also makes it somewhat confusing. And that can be a problem. Sarah Holland, Waitrose’s low/no buyer, says that as well as drinks that are clean, consumers are looking for products that are clearly labelled. And that clarity is difficult when drinks are crossing boundaries. Alcohol-free already falls into an odd space where it can be the responsibility of multiple buying departments (alcohol, soft drinks and health for instance), and the question of where drinks should be located in a store is equally vexed – and likely to get more so.

Imagine a protein-led drink with added vitamins and adaptogenic mushrooms starts to market itself as a sophisticated sipper. Where should it retail: in dairy, pharmacy or the drinks aisle?

“You can see why the sparkling elderflowers, fruit juice mocktails and functional drinks are increasingly aligning themselves with alcohol-free adult drinking occasions,” says category strategy expert, Kate Blake, who has formerly worked at Diageo. “But they aren’t replicating the taste of an alcoholic beverage and it’s important to draw a clear distinction and segmentation between the two at the point of purchase.”

The situation is made more fraught by the sensitivity around alcohol. The AF world is currently being viewed positively by governments for obvious reasons. If there is any hint that it could be acting (inadvertently or not) as a recruitment category for alcohol, that good will would evaporate overnight.

And policing this category is tough. It’s significant that neither the Wine & Spirit Trade Association nor the Portman Group would comment for this article because drinks that are not directly related to alcohol fall outside their remit.

Alcohol-free, in other words, is on a crazy, exhilarating ride and we can all expect to be thrown around a bit over the next few years.

As the trading manager for one supermarket put it: “We are seeing a blurring of the lines in soft drinks and alcohol-free [now]. What might that look like in 10 years’ time?”