By Ryan Whittaker, Consumer Analyst at GlobalData (www.globaldata.com)
“Non-alcoholic and low-alcohol (NoLo) beers and fruit ciders have the opportunity to grow significantly following the chancellor’s simplification of the UK’s alcohol duties. As the system changes to one where alcoholic strength correlates with how much an item is taxed, we can expect to see cheaper NoLo drinks and greater uptake in an already growing category.This news will likely be well-received among NoLo producers; however, it could be a tough hit to conventional alcohol categories.
“The NoLo category has been an unusual success story amid COVID-19. Many consumers have been unusu- ally focused upon their hygiene and health and have viewed the NoLo category as a healthier alternative. In Q2 2021, almost one third (32%) of UK consumers reported that they either consumed alcohol-free beer or mocktails in moderation or were actively trying to increase their consumption. Much higher rates of NoLo consumption were reported among consumers who described themselves as quite or extremely concerned about their health, reflecting the clear link between lower alcohol and higher health-consciousness. Furthermore, in Q3 2021, almost half (45%) of UK consumers have reported that they are quite or extremely concerned about their health, suggesting that NoLo brands remain a significant opportunity for new product development in the UK.
“On the other hand, stronger red wines, fortified wines, spirits and high-strength beers and ciders will likely represent the bulk of the fallout from these changes, although the cancelled alcohol duty increase may soften the blow for some. Meanwhile, the chancellor’s 5% lower rate of duty on draft beers and ciders, and relief for smaller craft cider operations with under 8.5% ABV, should encourage some consumers back to the pub for more varied local brands.”
