Retail in Asia


The rise of non-alcoholic spirits in Asia

non-alcoholic spirits

To drink or not to drink? With the expansion of the non-alcoholic drink selection, it is no longer a yes or no question.

The no- and low- ABV (alcohol by volume) trend was first championed by the beer and cider sector. Today non-partakers can choose from booze-free gin, tequilas, rums, whiskeys and even amaro, plus a wide range of non-alcoholic wines. The trend took off before the COVID-19 outbreak however the pandemic has shed a new light on health issues and created more opportunities for the market.

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Our drinking habits changed drastically over 2020. Consumers are paying more attention to what they eat and drink. The public grows more aware of alcohol’s effect on health reaching for non-alcoholic alternatives.

With a growing focus on health, low or no-ABV spirits, beers and cocktails are becoming increasingly popular as younger generations are looking to reduce their alcohol consumption and explore a more mindful approach to drinking without sacrificing their social experience. Also, non-alcoholic spirits allow bartenders to use the professional mixology skills to surprise, delight and create amazing, sophisticated creations previously difficult to come by without using alcohol. Following this new trend, non-alcoholic cocktail books have debuted on bookshelves since the beginning of 2020.

Looking at the customer demographics, it is interesting to see that the non-alcoholic spirits appeal broadly to all age groups, consumers of various ethnicities and income strata. Mindfulness is universal.

A recent study* showed that low or no-alcohol categories are set to grow by 31 percent over the next three years globally and in the APAC region alone, the low-to-no-alcohol (LNA) beverage market is estimated to grow more than 7 percent CAGR from 2019 to 2025. Australia, Europe and the US are ahead of the trend with supermarkets having dedicated whole sections to non-alcoholic spirits for a few years but Asia is developing at an exceptionally quick pace.

After working for 15 years for a major beer company, John Docherty saw the market potential and launched Sipfree, an online shop selling non-alcoholic spirits, wine and beers in Hong Kong. The launch took place in January 2020 in time for the popular “dry January”. Despite the COVID-19 outbreak and social distancing measures preventing events from taking place, Sipfree’s popularity and sales grew rapidly. Drinking habits have changed in Hong Kong with restaurants closing earlier and people trying to reduce their alcohol intake.

John Docherty curates a selection of artisanal non-alcoholic beers, spirits and sparkling wines from around the world. He says he noticed that the market mostly offers commercial products, Sipfree on the other hand focuses on small, independent and craft brands. He has a portfolio of 9 niche brands and ensures the products meet his quality standards, that they taste good and have a soul. After successfully launching in Hong Kong and with a growing demand from overseas, he plans to expand to Macau in November as well as to launch his own range of non-alcoholic products in 2022.

Lyre’s is one the brands available on Sipfree’s website. The British brand made its debut in 2019 and it has since expanded to 52 countries. After a rigorous three years of development and refinement, Lyre’s launched a premium range of 13 alcohol-free spirits in 2019. It now has five ready-to-drink non-alcoholic cocktails, using a unique approach towards the understanding of food science and flavour architecture. From Absinthe to American Malt, London Dry Spirit to White Cane Spirit, Lyre’s sources the finest all-natural essences, extracts and distillates from the four corners of the globe to craft its portfolio.

“We first launched in Singapore and Hong Kong in early 2020, two of the markets with mature drinking cultures and with strong influence on the rest of the region. In recent months we have expanded to Malaysia and Taiwan, and will be opening up more key markets across Asia by 2022. We find that some parts of APAC are at the same level of maturity as the USA or Europe, but this is not consistent across the region. Progressive venue owners, bartenders and of course drinkers have elevated the need for non-alcoholic spirits such as Lyre’s and are building the foundations for growth across the region,” said Mark Livings, CEO of Lyre’s.

The pandemic had a massive impact on Lyre’s sales.

“Comparing January 2021 with the same month last year, Lyre’s e-commerce sales have exploded, with a revenue growth of 538 percent, generated from a significant 375 percent increase in the number of first-time customers. Combining e-commerce with traditional retail and on-trade channels, Lyre’s banked a 1,000 percent+ increase in all revenues compared to the same period last year, an extraordinary result for a business that is only 18-months-old,” added Livings.

Another brand to watch is Seedlip. Diageo acquired a significant majority shareholding in Seedlip, the world’s first distilled non-alcoholic spirits brand, in 2019. Seedlip was launched by Ben Branson in 2015 to solve the dilemma of ‘what to drink when you’re not drinking®’. Seedlip has grown from the founder’s kitchen to a presence in more than 25 countries. Seedlip’s three variants (Spice 94, Garden 108 and Grove 42) are stocked in over 7,500 bars, restaurants, hotels and retailers globally.

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The growing awareness and focus on health has impacted a societal shift towards drinking less. Non-alcoholic spirits are here to stay. It is essential for the drinks industry to stay relevant to meet the consumer demand for increased options in the health and wellness-driven space.

*Refer to the result of IWSR and Global Market Insight