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Canada’s growing low-alcohol and no-alcohol beer market

April 1, 2020
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Why this is important to Wisconsin businesses: Health consciousness among millennials is changing the image of this market segment.

A growing market segment of Canadians are choosing to decrease their consumption of alcoholic beverages or even abstaining altogether.

This new market niche, dubbed the “sober-curious,” comprises chiefly millennials, and has become a target market for alcohol-free cocktails and other alternatives to beer, wine and liquor. The market segment includes a sub-niche known as “mindfully drinking” or “smart drinking,” referring to consumers who may drink a glass of an alcoholic beverage once in a while at a special event, and thus are not 100% sober, but more frequently make the choice not to drink alcohol.

In addition to non-alcoholic cocktails and alcohol-free versions of champagne, wine and cider, non-alcoholic and lower-alcohol beers appeal to this market niche. There is room for growth in this product segment, and Wisconsin beverage companies would be wise to focus their efforts here.
The Conference Board of Canada’s 2018 “Brewing up Benefits” report finds that non-alcoholic beer accounts for 1.2% of total beer sales, and that sales of it increased by more than 50% between 2013 and 2018, while beer sales overall were decreasing. The report notes that a leading contributing factor may be Canadians, and millennials in particular, making lifestyle changes that prioritize health and wellness. Another reason may be that the market now offers a wider array of non-alcoholic and lower-alcohol options.

Labatt Vice President of Marketing Todd Allen noted the challenges this segment has faced, saying it “had a lot of historical baggage,” and “was perceived as appealing to people with substance abuse problems, or to pregnant women.” Brewers are now attempting to change that—including Labatt, whose sales in this segment “have been doing very well, the majority of the volume coming from the 19 to 35 age group, young and increasingly health-conscious beer drinkers,” Allen noted. Additionally, Anheuser-Busch InBev’s report estimates that by 2025, non-alcoholic or lower-alcohol beer will account for 20% of their sales volume.

The non-alcoholic beer subsector is gaining momentum across Canada. Statistical data from 2019 finds a steady increase in demand for non-alcoholic beer options, particularly in the province of Alberta. According to the Alberta Gaming, Liquor and Cannabis Commission, the list of non-alcoholic beer category options and non-alcoholic beer sales have increased steadily since 2012.

The government of Canada, along with Beer Canada (Canada’s beer regulating body), has taken notice of the beer market trends and, as of 2017, has committed to amending the Beer Standard in Canada. The amendments focus on providing stronger support for innovation and helping to bring beer quality to a uniform level.

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