Non-alcoholic beer: making inroads in some markets and struggling to make ground in others. But why is that?
The variance in uptake is in some cases statistically extreme. Germany is the world’s biggest 0% beer market: 10.4m hectolitres were consumed there in 2023, standing up proudly to the 73m hectolitres of alcoholic beer consumed there in the same year, according to Just Drinks‘ parent company GlobalData.
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In the Czech Republic, the largest beer market by per-capita consumption, some 1.3m hectolitres of non-alcoholic beer was drunk in 2023, representing more than 8% of the total beer consumed that year. When looking at market share, the Czech Republic ranks second in the list of major beer-drinking countries.
On the other hand, China is the world’s biggest beer market. Despite China drinking more than five times as much alcoholic beer than Germany in 2023, they drank 40 times less 0% beer, just a miserly 250,000 hectolitres.
So, the maxim that non-alcoholic beer will find favour where beer consumption is traditionally high is no better than half true. Certainly non-beer drinking countries are unfertile grounds for a 0% market, as brewers have found targeting countries in the alcohol-adverse Middle East. But high beer consumption alone is insufficient to ensure a smooth take-off for non-alcoholic beer. Indeed, in some countries, beer is part of weekly habits and diets but the demand for 0% beer remains stubbornly low.
“There is definitely a cultural dimension to the take up of non-alcoholic beer,” says Kevin Baker, GlobalData’s director of research on alcoholic beverages.
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By GlobalDataIn some countries, Baker adds, alcohol “is still seen as an intrinsic part of the beer proposition”.
Why then have some countries embraced non-alcoholic beer more than others? First, let’s take the leaders. Germany is the primary market for 0% beer and is the biggest market by a significant distance both in terms of the absolute volume concerned and market share. If alcoholic and 0% beer are considered together (alc+zero), then 0% accounted for 14.2% of all litres consumed in 2023.
Japan and Spain, also major beer markets, came a respective second and third for 0% consumption in 2023, according to GlobalData. Consumption in both countries was still modest compared to Germany: 3.1m hectolitres in Japan and 2.9m hectolitres in Spain compared to 10.4m in Germany. That year, non-alcoholic beer accounted for 6.2% of beer sales in Japan and 6.7% in Spain.
Nina Göllinger of the German Brewers Federation (DBB) puts the popularity of non-alcoholic beer in Germany down to drinkers’ rising interest in health. “The changed consumption and lifestyle habits of people in Germany and growing health awareness are contributing to the fact that non-alcoholic beers and mixed beer drinks are becoming increasingly popular – without this reducing sales of alcoholic beers,” she says.
“Over the last twenty years, non-alcoholic beers and mixed beer drinks have become lifestyle drinks. Many non-alcoholic beers are also mineral and isotonic, so that the body can process and use the ingredients particularly easily – an advantage that athletes in particular appreciate. That’s why non-alcoholic drinks are particularly popular at various sporting events such as marathons, city runs or cycling races.”
Almost one in two Germans drinks non-alcoholic beers, Göllinger adds, citing a 2021 survey commissioned by DBB.
Germany is in good company in Europe – the biggest continent for 0% beer – where there are also solid markets in Spain, Poland, France and the Czech Republic. Outside Europe, Brazil and the US also have notable non-alcoholic beer markets .
In Spain, Heineken has seen success through its Amstel 0.0% product. Global innovation director Jules Macken says 0% beer is a natural fit in Spain, where beer is already considered a low-alcohol option. “Spain is one of the most developed 0% beer markets. Beer itself is considered low alcohol, in a country with a developed wine and spirits industry.”
In Asia, the situation is different, where Japan is the only major player. It is not for a lack of beer drinking in Asia: China and Vietnam also have huge beer markets but, so far, only Japan has shown significant interest in 0% beer.
According to a spokesperson for Japanese brewer Asahi Group Holdings, cultural and regulatory factors in Japan have helped non-alcoholic beer take root. “The popularity of non-alcohol beer in Japan significantly increased after the 2007 revision of the Road Traffic Act, which introduced stricter penalties for drink driving. This created a surge in demand for non-alcohol options in situations where people wanted to drink but legally couldn’t. In addition, Japan’s aging population has led more consumers to shift from regular beer to non-alcohol alternatives,” the spokesperson says.
The Asahi spokesperson says 0% beer has had a role to play in after-work drinks. “One aspect is Japan’s workplace drinking culture … drinking after work is seen as a way to build and maintain relationships with colleagues and superiors. In such settings, choosing not to drink alcohol can sometimes feel awkward. Non-alcohol beverages allow people to blend into these situations without standing out, as they look and feel similar to alcohol drinks.”
In some parts of the world there is, as yet, almost no market for 0% beer. Mass adoption of non-alcoholic beer in developed markets is a recent phenomenon, so a time lag to other smaller markets should come as no surprise. That said, some markets are unlikely to ever embrace 0% beer. The category in the Middle East and Africa was tiny in 2023 but swathes of both regions have only very small markets for alcoholic beer.
Then, there are the countries which challenge the conventional wisdom. Some countries are major markets for conventional beer but their 0% markets are tiny. That is the case with China – the world’s biggest beer market in 2023 – where 420m hectolitres was consumed. In China, 0% products only account for 0.1% of the combined market for conventional and non-alcoholic beer. In the US, 0% manages only a modest 0.9% of alc+zero sales.
For Barclays’ beverages equity researcher Laurence Whyatt, the demand for 0% beer is best understood financially in relation to other non alcoholic drinks. “There’s an economic situation here. You have to be relatively wealthy to buy a 0% beer. It costs two times what a normal soft drink would cost you.”
In some countries, where beer is seen more as a luxury product, 0% beer can be a hard sell to consumers. “In India, the desire for beer is more for high-strength beer and the idea of 0% beer is something of an anathema,” Whyatt adds.
Heineken’s Macken agrees on the cost equation. “Markets where 0% beer is not yet as developed are often those where the price per litre is relatively high versus average income, so the hours worked equation can be more challenging for consumers.”
In nominal GDP terms, China, the US, India, Russia and Mexico are by no means the poorest countries in the world but neither are they reputed for their wealth equality, so perhaps a majority of consumers in those countries prefer a cheaper soft drink to a 0% beer.
In China, the Asahi spokesperson explains, cost is decisive. “Compared to Japan, where the non-alcoholic beer market has been growing for over 20 years partly due to an ageing population and declining birth rates, China is still in the early stages of market growth,” she says.
Yet it is not the relative cost of 0% beer that is the sole factor determining the growth of the category. In Japan, regulation and sober driving has aided demand for 0% beer while, in the smaller non-alcoholic beer market of China, “affordable and readily available taxis reduce the need for non-alcoholic alternatives for drivers”, the Asahi spokesperson says.
It seems demand for non-alcoholic beer boils down to three considerations: money, health and regulation. In some countries, police enforcement may push some consumers toward 0% beer, but in others, the price of a taxi home can be fear-provoking enough.
