Raising a toast with non-alcoholic beverages, Marketing & Advertising News, ET BrandEquity
“Alcohol gives you infinite patience for stupidity,” said singer Sammy Davis Jr. But recent data suggests that people are starting to smarten up — at least about drinking.
According to a BCG report, the improved taste and availability of no- or low-alcoholic beers, wines and spirits has contributed to a rapid market expansion in the recent past. The global market is now valued at above $13 billion. And according to analysis from IWSR, global sales of non-alcoholic drinks are expected to grow at a CAGR of +7% between 2023 and 2027.
Indian brands are saying cheers to this new trend too. “The current size of the non-alcoholic segment [in India] is estimated at `67,000 crore,” JP Meena, the secretary general of the Indian Beverage Association (IBA) tells ET. “It is projected to reach`1.5 lakh crore by 2030. This includes carbonated soft drinks, water, juice and sports drinks. The contribution of this segment to the economy is significant.”
Cheers to health
The demand for non-alcoholic alternatives is largely driven by health-conscious consumers who want to drink less, but not entirely abstain from alcohol.
According to Dr Arpita Mukherjee, professor at the Indian Council for Research on International Economic Relations (ICRIER), the Covid pandemic has changed the consumer. “There is a fascination to move towards healthy alternatives,” she says.
Siddharth Saraf, co-founder of Vaum Tonics, agrees, sharing that the brand has reported 60% year-on-year growth since January 2022.
“The growth in the non-alcoholic beverage segment can be attributed to several factors, including an increased focus on health and wellness, greater awareness of the negative impacts of alcohol and a desire for inclusive social experiences that cater to non-drinkers,” says Saraf. “I believe this shift is part of a larger cultural movement towards more mindful and responsible consumption.”
Premium, business-to-business, non-alcoholic beverage brand Malaki Beverages has witnessed 50% growth in the past three years. Its chief executive Mohit Bhatia describes its average consumer as ‘health conscious’, between the age groups of 25 to 45 years old.
“This segment has a keen interest in wellness and trendy, new-age, innovative products,” says Saraf, adding that they are finding most of their demand from urban centres such as Mumbai, Bengaluru, New Delhi, Pune and Goa.
Slow, steady and sober
While the non-alcoholic segment has recorded a sizable growth globally since the pandemic, it is slower in India. The per capita revenue realisation in this sector (in India) is only $9 whereas it is $91 in Indonesia and $275 in Mexico, shares Meena.
“In India, the per capita sales volume (of non-alcoholic beverages) is 21 litres. Other developing countries like Philippines have 112 litres and Vietnam has 70 litres. This gap in sales volume shows huge potential growth for non-alcoholic beverages in the country,” Meena adds.
Rohit Kasare, head of business operations at Zero Percent, says that Gen Z and millennials of Mumbai, Hyderabad and Bengaluru have been the major consumers of their 0% alcohol drinks. “The segment is growing but at a slow pace. There is a lot more education that will be required at the consumer level. For now, it has arrived as a trend, but it will take some time to be a part of daily life,” he says.
Raise your glass
Consider this: Dating platform Bumble’s research conducted across 2,000 single adults in 2023 has found that one in four single Indians chooses not to drink on dates (called Dry Dating).
With these changing dynamics, there’s a greater imperative for brands to deliver better products and ensure there is market awareness.
Saraf says that their marketing strategy is predominantly digital. “We utilise social media platforms, influencer partnerships and targeted online advertisements to connect with our audience,” he says.
Sharan Kripalani, founder and CEO, Sober & Co, says that they’ve taken an offline-first approach in this “D2C frenzy market”. “We believe that true consumer feedback is only possible when the brand gets to interact with its customers on a physical basis. We target outlets that have potential clients. We have a representative from the brand introducing the product, as it is still a fairly new segment in India,” he adds.
Bhatia says direct sales efforts to ensure that their products reach the right audience is crucial. “We engage directly with these businesses through trade shows and industry events,” he adds.
Deliveries were allowed temporarily during the Covid-19 lockdowns in Maharashtra, Jharkhand, Chhattisgarh and Assam with restrictions. However, now legitimate deliveries of alcobev are not allowed in these states, even though a few local online platforms continue to deliver, especially in Maharashtra.
Reliance bought Campa Cola from Pure Drinks, and in 2023, it declared its intent to revive the Campa Cola brand, which ruled the Indian beverage market until the 1980s, to break into this category that has many love mark brands from the Pepsi Cola and Coca-Cola stables apart from many local favourites in the juice and juice drinks category.
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