Everything you need to know about the low and no alcohol drink trend

29 May, 2024

The no and low alcohol drinks market is experiencing notable growth, driven by several key factors and emerging trends including health benefits, new and innovative products hitting the market and changing consumer preferences.

In 2024, the soft drink market is projected to continue its expansion, with a forecasted growth rate of around 1.1% annually from 2024 to 2028, reaching a market volume of approximately $30.16 billion by 2028​.

And while the demand for low-alcohol products continues to grow, interestingly, no-alcohol products are projected to grow faster with a 7% compound annual growth rate compared to 3% for low-alcohol products​. And by 2027, no and low alcohol drinks are expected to account for nearly 4% of total beverage alcohol volumes across major markets.

To ensure all Regency members have access to the latest market information, new and existing products, efficient routes-to-market and of course, the most competitive prices, the whole Regency team spent a day exploring this rapidly-growing drinks category.

During the exploration and education session, we reviewed hundreds of products from various suppliers and brand owners, experimented with some creative combinations and innovative flavours and analysed achievable margins and sales opportunities to ensure every member of our team is equipped with the knowledge required to ensure our members capitalise on this opportunity.

Alongside the product analysis, we looked into the market trends that are shaping this category’s growth, including:

  • Health and Wellness: There is an increasing demand for healthier beverage options, including low-calorie, sugar-free and functional drinks. Products like Karma Drinks kombucha, London Essence sodas and enhanced waters and beverages with added functional ingredients (vitamins, adaptogens) are part of the premium category appealing to health-conscious consumers.
  • Innovation and New Product Development: Brands are investing in new product development to attract consumers with innovative flavours and formulations – we sampled premium and craft soft drinks with innovative flavours such as orange and fig, raspberry and rose and white peach and jasmine, tasted the popular Jimmy's Coffee iced coffees in various flavours, explored some old favourites such as dandelion and burdock and recreated old school drinks including the Pepsi Float.
  • Premiumisation: Fentimans offer a superb range premium mixers and craft sodas with unique flavours and natural ingredients, positioning themselves as high-end alternatives to traditional soft drinks.
  • Economic Factors: Despite economic pressures and the cost of living crisis, the soft drink market has shown resilience. Some segments, like premium and craft beverages, continue to perform well even in challenging economic conditions, as consumers are willing to pay more for perceived quality and uniqueness. We explored the potential margins that could be achieved by elevating drinks with garnishes, syrups and using more premium glassware.
  • Sustainability: Environmental concerns are pushing the drinks industry towards more sustainable practices, we discovered the brands that use the most eco-friendly packaging and reducing the carbon footprint of production processes.

Overall, the UK soft drinks market is poised for continued growth, supported by a combination of health-conscious consumer behaviour, innovative product offerings, sustainability efforts and economic factors.

If you’d like to find out more about this exciting and profitable drinks category, please get in touch and a procurement expert in your area can work with you to explore sales opportunities that are right for your business and customers.

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