Europe: Trends in Alcohol-Free Product Market
The alcohol-free product market is a growing trend in Europe. However, Zenith Global finds market dynamics to be different between Western and Eastern Europe.
The alcohol-free product market – dominated by alcohol-free beer – has been growing more rapidly than alcoholic beer in Europe. This market represented 3.4% of total beer volumes sold in Europe in 2017.
The alcohol-free market appears to be more developed in Western Europe than Eastern Europe. Western Europe accounts for 81% of the total European volumes.
Spain and Germany are leading in this trend in this region. These two countries account for almost two-thirds of the entire market for alcohol-free beverages.
In Germany alcohol-free is becoming an accepted lifestyle choice. With alcohol consumption decreasing since the 90s and the increasingly more health conscious younger demographics, alcohol-free is as much a necessity as it is popular. As a country with one of the highest global alcohol consumption rates and a historic alcohol problem, the changing trends and choices among people depict a positive future for Germany.
France, the United Kingdom and Italy are also significant markets for alcohol-free products in Western Europe.
In Eastern Europe, despite the volume share of the alcohol-free market being low, it has risen significantly from 16% to 19% in 2018. In this region, Russia is leading the alcohol-free market and also the third-largest in all of Europe with a 7% volume share. Alcohol-free beer is the most popular with a market dominance of 98.5%.
In 2011, the Russian Federation supported the adoption of WHO’s European Action Plan to Reduce the Harmful Use of Alcohol 2012–2020. Since then Russia has been implementing many of the recommended policies in the plan. These include the alcohol policy best buys recommended by WHO as the most cost effective measures to reduce alcohol harm. As a result alcohol use has declined in the country by 43%. Possibly another reason for the increase in alcohol-free choice in the country.
Poland and Ukraine are also significant markets for alcohol-free products in Eastern Europe.
Alcohol-free, while not being a premium product in Europe, is positioned as more premium in Western than Eastern Europe. In Western Europe the value per litre is €3.81 and in Eastern Europe the value per litre is €1.59.
Zenith Global predicts Western Europe will remain the key market for alcohol-free products in Europe. The reasoning for this is that most marketing of these products is aimed at this region because people tend to be more open to health and wellbeing messaging. Germany is projected to be the largest market for these products.
However certain shifts are expected. In Russia – where alcohol-free is traditionally marketed to drivers – the brand Baltika has expanded its messaging on alcohol-free as a lifestyle choice.
Poland and Netherlands are showing the most growth in these products.
According to Zenith Global public health campaigns across Europe, specifically “Dry January” in the UK, are influencing people to switch to an alcohol-free way of life.