Beer That Tastes Like Beer But Doesn’t Get You Buzzed Is Booming | Bloomberg

By May 13, 2019Beer, Beverage trends
ILLUSTRATION: FRAN CABALLERO FOR BLOOMBERG BUSINESSWEEK

As a recovering alcoholic, Becky Kean’s father had a hard time hanging out at the pub: He still loved the atmosphere, but he was frustrated sipping his mineral water while his mates sampled an endless parade of new flavors such as bitter pale ales, smooth nitrogen stouts, or tropical fruit sours. So three years ago, Kean founded Nirvana Brewery, aiming to create nonalcoholic beer every bit as tasty and trendy as craft brews. Today, she makes a half-dozen no- or ultralow-alcohol brews with names such as Kosmic, Karma, and Tantra in an industrial district in northeast London. “It was a way to include him, make him feel part of the social circle again,” Kean says. “With something he could enjoy—not just a substandard thing he has to have, but what he would choose to have.”

Like Nirvana, brewers worldwide are discovering it’s OK to mix suds with sobriety as demand for no- and low-alcohol beer soars. While growth of the broader craft beer market is slowing and sales of college beer-pong staples such as Bud Light and Coors stagnate or fall, lower-alcohol brews are the hottest trend. Sales this year will grow by a third in the U.K. and 9 percent globally, while the overall U.K. beer market will expand by 2 percent, researcher Euromonitor predicts. Nonalcoholic newcomers are benefiting from interest in artisanal brews and the shift toward healthier living, with customers ranging from designated drivers to pregnant women to folks who simply like the taste of beer but want to cut back on their alcohol consumption. “It’s people in high-pressure jobs like law or banking who are trying to find balance,” Kean says.

The industry’s giants haven’t missed the trend as they reassess a business that once largely focused on lowest-common-denominator lager for sports fans. Carlsberg AS makes a no-alcohol pilsner called Nordic, Heineken NV offers 0.0 lager, and Anheuser-Busch InBev NV—the maker of Budweiser—sells scores of alcohol-free cousins of leading brews, including Hoegaarden, Leffe, and Stella Artois. In 2016, AB InBev introduced a standalone brand called Prohibition, and by 2025 the company says it wants no- and low-alcohol brews to account for 20 percent of its volume. “What makes this segment even more exciting is that these brands often command a premium price,” AB InBev Chief Executive Officer Carlos Brito told investors in February.

Alcohol-free beers can be extremely profitable. Although they sell at relatively elevated prices—a pint of Nirvana runs about £4 ($5.24) in pubs, toward the top of the market for beer—they typically don’t face the taxes levied on booze. Producers say sober brews are a natural fit for lunch menus, and they’re starting to market them as sports drinks; in Germany, they’re a popular choice for marathon runners. “Business is very, very good, as there’s a lot of innovation in our sector that’s turning heads toward alcohol-free,” says Stuart Elkington, founder of a web store called DryDrinker.com.

Instead of de-alcoholizing its beers, Nirvana adjusts the temperatures, sugar, malt, and fermentation times to deliver brews with only trace amounts of alcohol. The India pale ales and malty stouts taste lighter than versions with alcohol, but they’re close enough to the new flavors that have reinvigorated the market that they work as a reasonable substitute. “People like Nirvana are proving that you can produce alcohol-free beers that don’t taste crap,” says Stuart Anderson, who runs a beer emporium called Ghost Whale in the south London neighborhood of Brixton.

While Nirvana remains a minnow—it produces 100,000 liters a year, or 0.0001 percent of AB InBev’s output—it’s growing fast. Kean says revenue doubled in 2018 and is on track to do so again this year, and Nirvana has signed up 2,000 outlets across Britain, ranging from Boisdale, a London watering hole popular with bankers, to a department store in Newcastle. It’s had inquiries from prospective importers in Europe, Asia, and the U.S. And it’s boosting its appeal locally by participating in nearby beer festivals and with gimmicks such as yoga sessions alongside the three silver tanks where it makes its brews. “You get a few snobs who say, ‘It’s not beer,’ ” Kean says. “But to us, beer is about the ingredients, a social drink that brings everyone together—it’s not about the alcohol at all.”

Source: Beer That Tastes Like Beer But Doesn’t Get You Buzzed Is Booming – Bloomberg