What’s this? Don’t tell me you are trying to shoe-horn Dry January into your latest posturings?
Oh, you can see right through me. Well, seeing as the rest of the world is obsessing about what we are eating and drinking this month there’s no harm in joining them, but with a new twist. Yes, there are apparently more people every year locking away the corkscrew for the whole of January and either going teetotal, or at least looking to cut back on what they are drinking. A habit many now continue into February and beyond. But this is not just postponing drinking until our second monthly gym membership goes out of our account. No, people are looking to stop drinking full stop.
Well, good for them. There’s plenty more for the rest of us...
That’s very good of you. Thanks for your support, but it’s not good news for the drinks industry in the long run. At least not unless it completely turns on its head what it is there to do. The long term drinking trends show how more people are listening to the health warnings and watching what they drink. This is particularly so amongst younger people and the next generation of drinkers that the industry, let's face it, will rely on to start drinking in the future. A recent study by the University College London claims 29% of 16 to 24-year-olds now see themselves as teetotal, compared to 18% in 2005. Those who have never sipped a mouthful of alcohol has jumped from 9% to 17%. So any amount of wine education or promotion is going to be lost on close to a fifth of the young drinking population. It’s a similar trend amongst older drinkers. The Office for National Statistics reports the proportion of adults who say they drink alcohol is at the lowest level on record - 56.9% in 2018 compared to 64.2 per cent in 2005.
If that’s the case, what can you do? You can’t force them to drink...
Of course not, but we would be fools to just ignore all the millions of consumers that no longer even think about going down the drinks aisle at all in the local supermarket or order even one glass of wine in a restaurant. Just look at what the big brewers are doing. They have been on top of this trend for years, but particularly so in the last five years. All the major brewers have now got seriously ambitious plans to change their production away from traditional beers to creating products that they can sell to the growing abstemious or non-drinking population. AB Inbev, the world’s largest brewer, has pledged that 20% of its sales will be for low or no alcohol beers by 2025. If that’s the case we can expect to see the low or no-alcohol beer category rise considerably from the £34.7m it reached in the year to July 2018, which in itself was a jump of 20.5% on the year before (Nielsen).
Really, what are they doing?
Just look at the big product launches that have come out of the big brewers in the last two years. The majority have been around lower and no alcohol, like Heineken’s 0.0. These are not just PR driven moves to get some good publicity, but vital brand saving major global launches designed to not just transform the beer and drinks industry, but keep themselves in business in the decades to come.
But they have tried low alcohol beers before and they have crashed and burned.
They have indeed, but there are three key reasons why these new launches have every chance of success. There is now a growing consumer market that wants them; the quality of the products have improved dramatically in the last two years; and they can now be served, perfectly chilled by draught, in the same way you would buy any other beer. The last point is arguably the real game changer. Ninety per cent of beer sold in pubs is by draught. Heineken, for example, is about to invest a huge amount in rolling out draught versions of its 0.0 brand, to pubs and bars across the country after an enormously successful trial last year. Its chief executive, David Forde, expects sales of 0.0 to double to 30m bottles this year as a result .
Good for them. Why is that important to us?
It’s who Forde sees as the biggest competition to Heineken 0.0 that should make every wine executive, producer and retailer sit up and take notice. He’s not looking to take on Molson Coors or AB Inbev, but instead has the soft drinks and coffee giants such as Coca-Cola, Pepsi and Costa Coffee firmly in his sights. “We believe we can go on the offensive and go after Coke, go after Fanta, go after spring water, go after tea, go after coffee,” he told the Daily Mail last week. “If you think about all the occasions that people drink a soft drink today – we can be in that market.”
So where does leave wine?
Good question, for this is as relevant for wine as it is for any other drinks category. Arguably even more so now that it is officially the most popular alcoholic drink on a night out, is the go to choice for most women and is what we traditionally choose to drink when eating out. It’s fair to say the majority of attempts to make a quality low or no alcohol wine have failed. Things are changing and, as with beer, the more major producers and brand owners that try, the better they are getting at producing brands and styles we might like. But we are not there yet.
What does the wine industry need to do?
For a start it can take a long, hard look at what the big beer brands are doing. It’s not just about getting the product right. That’s a given. Its how you then serve it. Wine needs to look at alternative ways to make low and no alcohol wines interesting and relevant to drinkers who may not even own a corkscrew. It’s time to stop thinking about ourselves as being only part of the alcohol drinks industry. If we want to have a long term future and be relevant to consumers down the line, we need to start thinking of how we could be considered part of the soft drinks industry too.