Consumers are increasingly willing to invest in high-quality, alcohol-free drinks. Money Mind explores this burgeoning beverage movement that shows no signs of slowing down.
SINGAPORE: The global beverage industry is undergoing a transformation as non-alcoholic and low-alcohol drinks gain traction, fueled by a growing wellness movement worldwide. More customers are now willing to spend a premium on drinks that forgo alcohol altogether.
According to NielsenIQ, the market for no- and low-alcohol wines, beers, and spirits reached a value of US$3.1 billion last year. Sales in the low-alcohol segment rose by 8.1%, while non-alcoholic versions saw an impressive increase of 33.2%.
Mr. Benedict Poh, bar manager at the modern Indian restaurant Firangi Superstar, has noticed this shift firsthand. He estimates that approximately 15% of customers now opt for zero-proof or low-ABV (alcohol by volume) cocktails—a figure that has been steadily rising over the years.
Industry experts attribute this growing preference for non-alcoholic or low-alcohol drinks to heightened health awareness among consumers. The restrictions imposed during the COVID-19 pandemic also contributed to this trend.
“We’re seeing this across all demographics in Singapore. People are becoming more health-conscious overall. While they still enjoy alcohol, they are increasingly aware of its health impacts, prompting a shift to zero or low-alcohol alternatives,” said Mr. Jarred Neubronner, senior analyst at Euromonitor International.
During the pandemic, alcohol sales were restricted after 10:30 PM in food and beverage establishments, leading many diners to start drinking earlier and opt for no- or low-alcohol options to continue enjoying their evenings safely.
The growing demand for non-alcoholic drinks has prompted market players to innovate. One example is Melati, a non-alcoholic aperitif launched in 2020, priced at S$68 for a 500ml bottle, which rivals or even exceeds the cost of alcoholic spirits like gin and vodka.
“We’ve selected Asian botanicals for our blend, featuring floral and fruity notes like goji berries and pomegranate,” explained Ms. Lorin Winata, founder of Melati. “Upon tasting, you’ll notice the warmth of raw cacao and a sophisticated dry bitter finish reminiscent of red wine.”
According to Wisecrack Drinks, a distributor of non-alcoholic beverages, the price premium can be attributed to the complexity of production. “It involves more ingredients since you need to dissolve them in water instead of alcohol. Most producers operate in smaller batches, raising costs, and logistics have also become more expensive,” co-founder Olivier van Hardenbroek noted.
Euromonitor predicts that the non- and low-alcohol sector will emerge as a leading trend in the post-pandemic landscape. It estimates that overall alcoholic beverage consumption in the Asia Pacific will decline by 4.7% by 2024, while demand for non-alcoholic and low-alcohol beer is expected to surge by 18.9%.
Mr. Neubronner anticipates further innovations in non-alcoholic spirits, providing brands with more opportunities to entice consumers with novel flavors.
As Ms. Winata eloquently put it: “No one gathers over a glass of water; we seek a sophisticated drinking experience filled with flavor, enriching conversations, and the thrill of discovering something new.”
