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No hangover? Low and no-alcohol NPD driven by wellness demands

foodingredientsfirst 2019-03-20
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Binge drinking is out and mindful drinking is in vogue. Alcohol reduction has become a key platform in the “balancing act” trend that the food and beverage industry has been addressing for several years. Lightness in alcohol content, sweetness, flavor and texture, as well as portion size, is gaining momentum in alcohol-based beverages, as consumers continue to look for ways to eat and drink more healthily and “light,” yet still enjoy what they love.

A recent Innova Market Insights survey (US, UK, France, Germany, China and Brazil) revealed that one in four consumers have cut down on their alcohol consumption in the past years. Offering solutions that are lower in alcohol but still full of flavor and experience, is expected to be on trend throughout 2019 and beyond.

Although “light” or reduced-alcohol drinks have been around for some time, they are increasingly drawing the attention of younger drinkers. Big brands such as Heineken and Guinness have also adapted their marketing of lighter-alcohol drinks towards the more mainstream consumer. By targeting millennials and young professionals, there has been a substantial increase in the uptake of low-alcoholic beverages.

“This is driven by ‘mindful’ drinking, which benefits products that are lower in alcohol than their established precursors,” Gerd Diefenthäler, Innovations Manager at Austria Juice, tells FoodIngredientsFirst. “Good examples are low/non-alcohol wines, ciders and ready-to-drink (RTD) cocktails. Next to these, alcoholic products that are assumed as ‘better-for-you’ with healthier formulations will be on the rise. Beyond these categories, consumers are on the look-out for natural, plant-based ingredients, as well as organic products.”

Moreover, botanical ingredients stand for naturalness and unique taste experiences, and according to Diefenthäler, that is “exactly what consumers are looking for.”

Many botanicals are already present in spirits, ciders, craft beers and alcohol mixers, and botanical-infused sparkling drinks are also increasing, he says. “In the wine and beer categories, these products are already established in Central Europe. ‘Mocktails’ are also becoming more and more requested by consumers, as well as alcohol-reduced ciders,” Diefenthäler notes.

Alongside the healthy lifestyle trend, especially among the younger generations, the movement towards drinking more products with less alcohol is also worth mentioning, Diefenthäler comments. “Modern drinkers look out for drinks they can consume throughout the evening without losing control. Staying in control all of the time is the main driver and binge drinking is out,” he claims.

“On the other hand, there is a trend towards experiences, wher consumers treat themselves to specialties or outstanding drinks, for example. They consume less, in terms of volume, and more in terms of higher value,” he reveals.

Consumption habits have changed significantly over the last decade and today, people under the age of 35 consume much less alcohol than previous generations, Diefenthäler says. Moreover, he says they are open-minded towards new beverage creations from the craft segment, and RTD cocktails with reduced-alcohol content and natural ingredients.

“Ciders and wine-based drinks are also preferred by younger generations searching for refreshing, easy-to-drink alternatives to beer, wine and standard soft drinks. Wine will be strong among consumers over the age of 35 with rising sales in the organic and sparkling sector,” he adds.  

The teetotal trend has been gathering momentum for some time, demonstrated through some of the significant beer manufacturers innovating on low or no-alcohol alternatives. In January 2018, Guinness launched its first non-alcohol lager, “Open Gate Pure Brew,” touted as a full-flavored, non-alcoholic lager. Heineken 0.0 hit the shelves in Barcelona, Spain in May 2017 and has since been released in over 30 countries. Heineken says: “We discovered that the market for great tasting alcohol-free beer is very strong and further expansion of Heineken 0.0 is planned for 2019 and beyond.”

The company also notes the growth of the low- and no-alcohol segment is expected to continue and they “aim to be at the forefront of taste innovation, leveraging the cultural shift towards a healthy and balanced lifestyle.”

Craft appeal?
Consumer tastes and preferences continue to evolve and shape the beverage sector. According to Heineken, “the most noticeable change has originated from the popularity of craft beer, but more gradual changes have emerged from changing demographics and a growing awareness of health and wellbeing.”

Variety in craft beverages is important for Heineken and it complements the growing international premium beer segment. “Craft” has put beer at the center of many conversations among a broader group of discerning consumers. Around the world, consumers are seeking more variety and Heineken’s consumer-oriented approach has “increased understanding and accelerated the international growth of the company’s craft and variety range,” says the company.

“Craft,” with its individual taste experiences will continue to grow in the spirits segment and push the cider category as well, according to Diefenthäler. Beer and spirits still are multigenerational alcoholic drinks, reinventing themselves due to the strong craft movement, he adds.

“In the craft space, botanicals used in special brews and during the aging process, can be perfect to complement the character of the original drink making it unique. Also, the usage of special botanical extracts and natural flavors is a perfect way to refine alcoholic drinks,” Diefenthäler explains.

Craft beverages continue to shape the market and spur further innovation in NPD, that is according to Christoph Witte, Head of Product Management B2C at Döhler. 

“Crafted” stands for authenticity, trust, handmade products, reliability and clean labeling. “These characteristics are highly relevant for today’s consumers,” he claims. “It, therefore, comes as no surprise that the crafted trend, which originated in the beer industry, is rapidly conquering other beverage categories such as carbonated soft drinks, tea drinks and even water,” he tells FoodIngredientsFirst.

“With ‘craft,’ there is a rediscovery and celebration of humanity – a passion and persistence to produce a more desirable, better tasting product that is worth paying more for,” Charlotte Machinek, Marketing Manager, BU Beverages, Symrise tells FoodIngredientsFirst.

Craft is seen as a superior product and can be used to express social status through connoisseurship or exclusivity. “There is a need to make better beverages: a unique flavor derived from unusual ingredient combinations and innovative processes and special ingredients. Even in the industry, the demand for craft can be answered. It’s all about transparency, telling an intriguing story, producing or sourcing locally and the right balance in availability,” she notes. 

New highs?
In August 2018, Heineken launched Hi-Fi Hops, a new brew from California beer brand Lagunitas, which is made with marijuana instead of alcohol. According to Heineken, the launch was part of a growing trend of established companies diving into the marijuana industry. The beverages contain no alcohol, instead, the beer-like beverage is made with THC, the primary psychoactive ingredient in marijuana.

What’s next?
The reduced alcohol space is further expected to boom throughout 2019, as consumers seek more healthful ways of drinking. The use of new flavors for craft beverages will make particular waves in the beverage space, as NPD will be pushed by botanicals, herbs and floral flavors. We can expect the popularity of low alcohol beers to continue, as the spring and summer months are upon us.

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