Low & no beer saturated? Only in opportunity.

A recent analysis piece in The Grocer asked if the low & no beer category was hitting saturation point.

The demise of Freestar and the evolution of Infinite Sessions to include low-alc beers, were mentioned at the top of the piece as early signs of a worrying bigger picture for the category.

That worrying picture could not be further from reality.

Low and no alcohol products are up almost 15% (NIQ 52 w/e 15 July), low & no beers are up 20% in the same period versus total alcohol sales falling by 1.5%.

Waitrose has introduced their low/no bays and are likely to be the first rather than the only.

Penetration among UK consumers is rising, and quickly, but still much lower than a number of our European neighbours.

Mintel reports that category sales will grow moderately over the next two years (in an overall sluggish economy), gain momentum as the economy strengthens and be driven by higher engagement among current under 45s through the end of the decade.

Far from being saturated, this is a category with still a huge opportunity.

Show me the beer brand without a low/no offer these days, and I’ll show you a failing beer brand.  Lucky Saint is winning awards, plaudits, listings and fans at every turn.  Days, Big Drop and the Drop Bear Beer Company are making huge strides. Even allowing for established beer brands power-playing their way to the top of the low/no sales league, Freestar didn’t fail because there isn’t enough room.

I suspect Q4 will be low and no beer’s biggest quarter ever. And January 2024 will be the single biggest month in the category’s history. Because this is a category still in its infancy, the early foothills, at the start of the race.

Covid has had an impact on how much people want to drink; social media too; and wfh a few days per week; and the cost-of-living crisis.  Drinking low/no now comes with nowhere near the stigma it had even just two years ago.

To take advantage of the opportunities, and succeed where Freestar has failed, low/no beer brands must get a few things right, first and foremost of which is distribution. If you don’t get this quickly enough, the revenue doesn’t come in and there’s nothing to spend on marketing except investors’ cash, which quickly runs out. You must get to the point quickly of being able to stand on your own two feet.

Second is not being seduced by innovation. Growing, scaling-up companies with dozens of different SKUs quickly learn they can’t all be supported. It’s simple economics – don’t spread yourself too thinly.

Third is marketing, where things get really interesting and so, so many brands get it wrong. This may seem harsh, but if you don’t understand your market, you’ll fail. Don’t understand your available market segments, you’ll fail. Don’t have a clear target, you’ll fail. Don’t have a clear positioning, you’ll fail. Don’t have proper objectives, you’ll fail. I suspect Freestar got lost somewhere in this Forest of Failure.

And that’s before you’ve even got to external comms – creative, media, PR, social etc. Getting the balance right between “selling the apples and growing the apple tree” is one of marketing’s fundamental challenges at the best of times – which we are not currently living in.

During tougher times the temptation, largely disproven by all analysis, is to switch marketing spend to focus on performance – sell all the apples! And then as contextual improvements happen, to gradually add elements of brand-building, as if concocting the greatest risotto of all time – slow and steady. In our current verrrrrrrry slowly improving economy, this balance has never been more important… you really do have to try to both grow the apple tree AND sell the apples.

So, let’s not take the failure of one brand and the slight shift of another as a portent of category doom. The opportunity is absolutely there… it just needs skill, nous, experience, creativity, agility, energy and not a little luck, to deliver it.

Nick Woods

Strategy & Creative Director, Sunny Side Up PR & Comms