“Beer for the modern adult” – that’s how Bill Shufelt, owner of Athletic Brewing Co. in Statford, CT, describes his brewery’s beer. All of the beer brewed at Athletic is non-alcoholic. While non-alcoholic beer may seem like an oxymoron it, along with its cousin, low-alcohol beer, is trending in the marketplace. And not just in the U.S market, but in overseas markets as diverse and as different as Belgium and China. Before exploring the numbers and reasons behind the growth of low-alcohol and non-alcoholic beer let’s start with some definitions.
In the United States, the Alcohol and Tobacco Tax and Trade Bureau defines beer as “beer, ale, porter, stout and other similar fermented beverages (including sake and similar products) containing one-half of one percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from substitutes for malt.” It is, in my opinion, a quirky definition, but let’s not get into that here. They key point, for present purposes, is that for beer to qualify as beer it has to have an ABV of at least 0.5%. So everything below 0.5% ABV is either non-alcoholic and low-alcohol beer. Technically, non-alcoholic beer has an ABV of 0.0%, although the Oxford Companion to Beer notes that, “technically speaking, there is no such thing as non-alcoholic beer because beer contains alcohol by definition”. For the sake of simplicity, and for the purposes of this blog entry, I will use the term low-alcohol beer to refer to all beer under 0.5% ABV, and 0.0% ABV to refer to non-alcoholic beer. One of the challenges I found in researching this piece is that lines between the two are often blurred – so for example the term non-alcoholic beer is sometimes used in such a way that it also includes non-alcoholic beer.
Low-alcohol/non-alcoholic beer is not a new concept, of course. During Prohibition, it was in fact legal to brew beer that contained less than 0.5% alcohol – so-called ‘near beer’. In more contemporary times low alcohol beer has been produced in both the United States and Europe. Those of us who live in the United States are familiar with O’Douls, a low alcohol beer (<0.5% ABV), introduced by Anheuser Busch in 1990. My European friends are probably more familiar with low-alcohol brands such as Kaliber which is brewed by Guinness and St. Pauli N.A., brewed by Beck’s (which is now owned by AB InBev).
When I was drinking mass-produced beer in the 1990s, low alcohol beer had a bad reputation. It wasn’t so much that it didn’t give you a buzz (it wasn’t meant to after all), but rather that it just didn’t taste all that good. Toady the low alcohol beer market seems to be booming, and those who prefer low-alcohol beers no longer are restricted to an awful tasting product.
Just how popular is low-alcohol beer. Globally, the market for low alcohol beer was $13 billion in 2016; by 2024 it is projected to be $25 billion. And it’s growing popularity seems ubiquitous. In Belgium, in 2018, non- alcoholic lagers and wheat beers experienced a thirty percent market growth. Non-alcoholic and low alcohol beer is also gaining in popularity in China. In 2016, twenty-nine percent of new beers launched were in one of these two categories. Approximately eight percent of the beer produced by AB InBev is low or non-alcoholic. They project that by 2025, that will increase to twenty percent.
The increasing popularity of low and non-alcoholic beer appears driven by the consumers prioritizing healthier lifestyles. Why don’t they drink a healthier non-alcoholic alternative, I hear you ask. It is true that some juices may provide healthy alternatives to beer. They do not, however, deliver the lifestyle image provided by beer. Beer projects a particular lifestyle image; consuming low-alcohol or non-alcoholic beer protects that image, while not compromising an individual’s health.
The recent upsurge in interest in low and non-alcoholic beer has prompted some of the world’s major breweries to launch new products to add to their existing beer portfolios. In January 2019, the world’s second largest brewer, Heineken, will launched a new non-alcoholic beer in the United States – Heineken 0.0 (pronounced zero zero). The new beer, first introduced into Spain in January 2017, is now available in over thirty countries. Heineken 0.0 has only sixty-five calories. It also goes a step further than its low-alcohol cousins, in that it contains zero alcohol. In other words, the ABV is 0.0%. In marketing the new beer, Heineken suggest that people drink it at times when perhaps they would normally not drink beer – such as during an office lunch or after a workout. Other potential markets for non-alcoholic beer include drivers of motor vehicles, pregnant women, people taking medication, athletes, and those who abstain from alcohol for religious and other cultural reasons. Studies in Europe also show that avoiding a hangover and keeping in control are factors driving demand for non-alcoholic and low alcohol beer.
The growing demand for non-alcoholic and low alcohol beer is part of broader taste shifts impacting the alcohol industry. According to CNBC reporter Angelica LaVito, “consumers are increasingly shunning beer and instead drinking wine, spirits and hard seltzers, which they perceive as healthier than beer.” The shift away from beer and towards wine can be clearly seen in the two graphics below. In the first graphic you can observe the general decrease in per capita alcohol consumption, particularly beer, in the United States in the post-1980 period. The second graphic shows that in 1993, 47% of American who drank alcohol stated that beer was their preferred alcohol of choice. This compared to 27% preferring wine and 21% preferring liquor. By 2017, the percentage preferring beer had fallen to 40%, while the percentage preferring wine and liquor had risen to 30% and 26% respectively.
This is a trend that is also occurring in other countries. A recent article on the BBC website was titled, “Under-25s turning their backs on alcohol, study suggests”. The article reported on new research at University College London which found that the percentage of 16-24 year olds who do not consume alcohol increased from 18% in 2005 to 29% percent in 2015. In Belgium, a recent survey revealed that sixty-two percent of Belgians felt that they consumed too much alcohol.
In the United States, we have observed the growing popularity of so-called session beers – beers that are less than 5% ABV. A 2016 survey by Nielsen and CGA Strategy found that 45% of craft beer drinkers prefer session over beers with a higher ABV. Of the twenty-five fastest growing craft beer brands in 2016, thirteen were session beers. Almost every craft brewery produce session beers. Many have went to great efforts to ensure that from a taste perspective that they are an acceptable alternative to higher ABV beers. Thornbridge Brewery in Bakewell, U.K. disposed of four batches (sixty thousand bottles) of beer in their quest for a palatable low-alcohol beer. The end result was their Big Easy, a very drinkable Pale Ale with an ABV of only 0.5%. Athletic Brewing Co. of Stratford, CT is a craft brewery that produces only non-alcoholic beer. Athletic Brewing’s flagship beers are an IPA and a Golden Ale, while season offerings include an Autumn Brown Ale and a Harvest IPA. Crafting a non-alcoholic beer that did not compromise on flavor was a challenge for Athletic’s owner Bill Shufelt. It meant producing over one hundred test batches on home brewing equipment, before he was satisfied.
Market signals clearly demonstrate growing consumer demand for low-alcohol and non-alcoholic beer. This shift in consumer preferences impacts every brewery, from the smallest microbrewery to the largest multinational. And they are clearly responding, witness the seemingly growing number of non-alcoholic and low alcohol beers that are now available. Furthermore, breweries are working very diligently to ensure that those who choose non-alcoholic and low alcohol beers are not being compromised when it comes to taste. And it seems to be resonating with some consumers. Thirty-one percent of Germans between the ages of eighteen and twenty-four 18-24 agreed that non-alcoholic and low alcohol beer tastes just as good as ‘regular’ beer. More and more, we are seeing beer writers helping consumers navigate the increasingly crowded low-alcohol and non-alcoholic beer market by tasting and rating the various offerings.
Further Reading:
Ng Fat, Linda, Nicola Shelton, and Noriko Cable. 2018. Investigating the growing trend of non-drinking among young people: Analysis of repeated cross-sectional surveys in England, 2005-2015. BMC Public Health, Volume 18:1090.
