April 5th, 2022 by Jayshendra Karunakaren, Analyst. From ISS ESG.
Media coverage throughout 2021 has reported that the zero- and low-alcohol beverages market is booming. In fact, zero – and low-alcohol drinks have increasingly featured at Christmas and New Year gatherings.
According to the 2021 IWSR Drinks Market Analysis, consumption of zero-alcohol beverages, defines as containing less than 0.5% acohol by volume (ABV), is expected to increase by 31% by 2024 across several markets including Australia, Brazil, Canada, France, Germany, Japan, South Korea, Spain, the UK, and the US.
Particularly, Australia is assumed to be subjected a 16% growth from 2020 to 2024, according to IWSR. This simultaneously reflects a trend of declining alcohol consumption among younger demographics.
Endeavour Group, the parent company of major Australian liquor chains BWS and Dan Murphy’s, has reported that sales of non-alcoholic drinks have almost doubled in the past year, and represent one of their fastest growing product categories.
The Foundation for Alcohol Education and Research (FARE), states that non-alcoholic beer sales alone have increased by 57 percent to $35.5 million over the last five years in the local market.
However, it is also claimed that zero-alcohol products provide an additional advertising channel for well-known alcoholic beverage brands since The logos, branding, packaging and labelling of these zero-alcohol drinks are frequently very similar to their more popular parent alcohol portfolio or their ‘masterbrands’.
Given the often virtually indistinguishable branding and product packaging between alcohol and zero-alcohol products, there is a reasonable argument to be made that zero-alcohol products that retain the trademark name and branding of popular alcohol brands could lead to increased recognition and awareness of alcohol brands among younger demographics. This would especially apply to children who are unable to distinguish between alcoholic and non-alcoholic variants. In fact, a study from 2019 showed that students aged 20-24 in Thailand had higher brand familiarity of alcohol brands for alcohol products that shared the same branding with their “parent brand”.
Overall, are zero-alcohol products a harm reduction or trigger for at-risk individuals?