The NOLO alcohol wine-based products – the reasons for the growth and future trends

The NOLO alcohol category beverages experienced a tremendous increase in the last decade. According to the IWSR data, the NOLO (no- and low-) category value across ten key global markets will surpass $11 billion in 2022 and is projected to increase by a third by 2026. Social behaviors and trends, alcohol restrictions, campaigns against alcohol abuse, health concerns, climate change effects, and global oversupply all contribute to decreased full-strength wine consumption and the subsequent increase in NOLO-alcohol beverage production, including “wines”. Before delving deeper into each factor that has influenced the category’s growth, what does OIV (International Organisation of Vine and Wine) define as a wine-based product?

A wine-based beverage is a beverage obtained from at least 50% by volume of wine and/or special wine as defined in the International Code of Oenological Practices of the OIV, which could have undergone treatments such as sweetening, colouring, the addition of aromatising substances or preparations, the addition of food-related products, such as must or non-alcoholic products or beverages including water. The actual alcoholic strength by volume has to be equal to or above 3.5% vol. and below 14.5% vol. The alcoholic component has to derive exclusively from the wine or special wine used, except for doses used only to dilute aromatic substances, colourants, or any other authorised component.

Alcohol can be removed totally or partially from wine. Although different methods exist to reduce alcohol levels through some practices in the vineyard or before and during fermentation, the main post-fermentation winemaking options to reduce alcohol content include humidification (water addition is usually illegal), blending with lower-alcohol-content wine and reducing or removing alcohol through distillation-based or membrane-based techniques. The alcohol content can also be maintained lower by stopping fermentation before all sugars are converted into alcohol, leaving always some residual sugar in the final wine.

The reasons for the growth of low- and no-alcohol category

Social factors

Consumer behaviours. The consumption of NOLO-alcohol products is strongly related to the target, including geographical features. As IWSR data shows, they are more consumed by Millennials, with Germany, Japan, Spain, the US, and the UK being the world’s most valuable no/low-alcohol markets. Dynamic growth is expected in Australia, Canada, and the US. The IWSR analyses also indicate that low-alcohol wine-based products are less consumed and predicts that no-alcohol beer/cider will contribute nearly 70% of the overall no/low-alcohol growth between 2022 and 2026. The no-alcohol wine growth is expected to be fragmented but positive across different markets (IWSR).

Generally, younger people drink less wine for reasons such as the Legal Drinking Age (LDA), health reasons, lack of knowledge, often considering wine as old-fashioned, and switching to other products, e.g. cocktails or other drinks. Therefore, NOLO-alcohol wine-based products stand out from the classic wine category, especially when presented in less formal (e.g. tins) and attractive ways. Many producers promote the category within this target audience, increasing production and creating bespoke packaging and communication.

The older generation, which consumes wine more regularly, switches to NOLO-alcoholic wine-based products more cautiously, paying attention to quality and taste. High-involvement consumers trust the producer’s reputation, choose their favourite grape varieties and regions, and often prefer lower-alcohol wine-based products to completely de-alcoholised.

Alcohol consumption also during working hours is also less accepted and influences demand for non-alcoholic wines. Because of rising demand, many fine-dining restaurants added NOLO wines to their lists. For example, the company Pierre Chavin launched in 2021 a super-premium brand for the on-trade sector, Pierre Zéro Cuvées, listed in many Michelin-starred French restaurants.

From “Economy with” to “economy without”. Among the changes in consumption preferences, one to mention is a general trend to switch to “economy without”. Demand for products with fewer/no ingredients added, such as sulphites, alcohol, sugars or dosage, additives, ingredients of animal origin, and lower/zero calories, is a well-established trend. Producers increasingly display the related items on the label and use these characteristics as a marketing tool.

Consumer animosity is another factor to consider, as most drinkers, especially in wine-producing countries, have a strong bond with the country of origin, mentally and in terms of taste. Producers must respond to their needs by offering category products from that country or region.

Cultural contamination and religious factors also influence the demand for zero-alcohol wine. The ethnic mix in family or working groups, which includes abstainers for cultural and religious reasons, affects behaviour within them, reducing alcohol consumption and increasing zero-alcohol products offered.

Brand Awareness and Influencers. Over the years, consumption has become more a social action than an economic one. Celebrities, social media influencers, critics, wine professionals, and peers influence consumers’ choices, increasing demand. Fear-based marketing is commonly used in communication and campaigns against alcohol abuse (e.g. Canada’s and Australian New Guidelines), affecting alcohol consumption and promoting NOLO-alcohol products. The brand reputation also affects the conversion rate among all target consumers. 

Healthy reasons

A healthy lifestyle, attention to quality and willingness to pay more for better and healthier food and wine, including premium NOLO-alcohol, increase demand and reinforce the Premiumization concept. Among health or illness reasons, alcohol consumption moderation during pregnancy and driving influences the demand for NOLO-alcohol alternatives.

Environmental factors

Climate change and global warming lead to higher sugar accumulation in grapes, especially when producers promote phenolic ripeness, producing higher alcohol wines. This factor often contrasts the general trend to consume fresher styles. Reducing alcohol content is increasingly used to respond to environmental issues and comply with production rules limits. Moreover, extreme summer temperatures diminish alcohol consumption.

Source: Liv-ex

Legislative and Political factors

Minimum LDA, restrictions or prohibition of selling and/or marketing alcoholic beverages in defined hours, locations or states, strict drink-driving laws, which limit further BAC levels in most counties, increasing NOLO-alcohol products demand. Countries where monopolies strictly control alcohol sales (Sweden, Norway, Canada) or the USA with a three-tier system are tough to penetrate, and alcohol-free products can help reach those markets, otherwise unapproachable for many brands.

The rising taxation increases prices, forcing consumers to drink less or switch to NOLO-alcohol choice. Recently, increased taxes in the UK, combined with growing demand, have resulted in an increased supply of NOLO drinks. The restrictions on alcohol content within production rules and international trade’s legal or taxation requirements make adjustments of alcohol levels as necessary to avoid eventual penalties. Partial or total de-alcoholisation of wines helps surpass trade barriers between states and increase production.

Economic factors and Global Oversupply

As global oversupply becomes a threat, producers must adopt strategies to reduce unsold wine volumes and increase their portfolio with alternatives in line with growing trends. The increased costs of raw materials (e.g. glass), energy and labour can drive producers to offer products with alternative packaging. In many countries, people consider wine a luxury product due to lower income or habits. NOLO-alcohol wine can change these behaviours, primarily through a lower-price range and informal packaging and can help to surpass some legislative limits. For example, consumers can accept a NOLO product packaged in many formats while preferring wine in the glass bottle in some markets. Online trading is also constantly growing, and NOLO-alcohol products offer the opportunity to sell in markets otherwise difficult to penetrate with a full alcohol strength range, surpassing bureaucracy issues.

A personal opinion on the future of the category

Marketing analysis of theme-related keywords used for online searches such as “non-alcoholic wine”, “free alcohol wine”, or “low alcohol wine” in different markets helps to make conclusions and hypothesise future trends. Although online research can be less used in some markets (e.g. the UK) as category products supply through the retail sector (supermarkets, deep discounters, etc.) satisfy consumer’s needs, in others, the online search is the most practical option. Some countries (e.g. Italy) offer limited choices, especially premium-priced, forcing buying online. Keyword search analysis in Italy shows that most are intentional, with clear purchase intent. Anyway, we can broadly analyse global trends and understand consumers’ needs through keyword trends.

Source: from analysis of keyword trends. Data shows the average number of monthly online searches over last 12-month period

NOLO-alcohol wine-based products quality and competitors

What are the reasons why consumers convert less to consumption of NOLO-alcohol wine-based products compared to other NOLO-alcohol drinks? On one hand, wine consumers love its taste, including alcohol and its effect. The quality of de-alcoholised wines is still the first barrier to the consumer’s choice, as well as availability.

From my research, the most asked question online in the UK and US results is “are there any good low-alcohol wines”? While consumers have a wide choice of NOLO-alcohol drinks at all price points and quality ranges, also of well-established brands such as Lyre’s, Sidlip, Everleaf, non-alcoholic beer (e.g. Becks Blue, Heineken Zero, Brew Dog), the choice for NOLO-alcohol wines is more complicated. Consumers still struggle to make an opinion without availability. Most people buy largely distributed non-alcoholic alternatives of desired quality and price point. Therefore, availability and quality are correlated and will influence future growth.

After receiving feedback from different professionals and winemakers, the de-alcoholised wine quality and balance still need to satisfy the consumer’s taste perception. High-involvement consumers appreciate the typicity, which is often missing after de-alcoholisation. Though tasting, we often find de-alcoholised wines’ aromas/flavours intense but overly cooked, similar to pasteurised juices, many taste artificial. Residual sugar at off-dry levels often balances high acidity, while many high-involvement consumers prefer fully dry, except some styles. On the other hand, de-alcoholised wines satisfy consumers growing trend for lower-calorie drinks. For example, Miguel Torres Muscat- and Garnacha-Syrah-based de-alcoholised “wines” “Natureo 0,0” offer around 20kcal/100ml, compared to about 80kcal of regular wine.

The new EU law requires nutritional levels, including calories and shelf life, to be displayed on the label for the NOLO-alcohol category. While consumers perceive the lower calories positively, shelf life can influence retailers’ preferences compared to full-strength alcohol products without expiration dates.

Production costs and impact on price

The technology to remove alcohol completely is extremely expensive: Spinning Cone Column (SCC) starts from 500.000 euros but can easily reach one million. This means that only a few large producers can buy it, and a realistic option for most is using custom crush facilities or cooperative services, which are still available in a few countries. I expect an increase in these services, but the transportation and production costs impact the achievement of a suitable ROI (Return on Investment) and slow the category growth. Furthermore, from the consumer point of view, de-alcoholised wines are often expected to have a lower price than fully alcoholic without considering additional production costs.

Reducing alcohol content can be done through different practices in the vineyard, such as picking earlier, site selection (e.g. planting at higher altitudes), selecting planting materials* (grape varieties, rootstocks), providing adequate shading, correct leaf removal, etc. Combining attention in the cellar before and during fermentation can decrease alcohol content while reducing costs. Also, the partial de-alcoholisation can be more accessible for small producers. Therefore, the taste, overall quality and balance of partially de-alcoholised wines and reduced intervention costs compared to zero-alcohol wine-based products have more potential for future growth. Sustainability should also be evaluated as de-alcoholisation increases the production phases.

*Planting materials help to reduce alcohol levels. Some grape varieties produce naturally wines with lower alcohol content (e.g. Hunter Valley Semillon is often around 11% abv), there are many researches on new hybrids and rootstocks (e.g. Murcian Institute’s of Agriculture and Food Research on “New varieties derived from Monastrell for obtaining low alcoholic wines”).

Photo: Wine Australia

Still No vs Low alcohol

The lower alcohol content is an increasing consumer necessity, not just a trend. The wines tend to be more alcoholic due to global warming, and consumer preferences have switched in the last decade to fresh, lighter, less alcoholic styles. Furthermore, alcohol can mask some esters, especially when they miss fruit concentration or in non-aromatic varieties. Even in the HoReCa sector, the consumer is very selective about alcohol content. During my experience as manager of a fine-dining restaurant in Italy, about 20% of our customers asked for the wines with the lowest alcohol content.

Producers must offer alternatives, such as NOLO wine-based products while limiting costs in response to global oversupply and decreasing wine consumption. As analysis shows, consumer research for non-alcoholic wines is stable for now in leading markets. Consequently, partial de-alcoholisation has more growing potential than total.

Source: Wine Dealcoholisation: State of the Art and Effects on Chemical Composition webinar (December 19, 2023), Infowine

Marketing opportunities

The selection of NOLO-alcohol products allows online businesses to reach new consumers and increase sales. Many platforms are also hybrid and sell wine and food. The international wine trade is challenging due to taxation, legislation, and bureaucracy, but offering zero-alcohol products can expand new markets. Non-alcoholic products selection can give more visibility through SEM (Search Engine Marketing) activities, SEO (Search Engine Optimisation), and content marketing, such as creating theme-related blogs and increasing sales opportunities.

In monopoly markets, producers can increase sales opportunities through NOLO products, attracting interest in their brand. Generally, an increased portfolio benefits producers’ Brand Awareness. Those capable of responding quickly to the latest trends create a positive image.

NOLO-alcohol wine-based products as a blending component. As we can see from general trends, people increasingly consume lower-alcohol and lower-calorie beverages. One of the effective ways to promote the concept of NOLO-alcohol wines is to use them as a blending component in mixology.

Influencer marketing is another powerful tool that generates interest and sales if appropriately used. Constantly growing producers’ consciousness of how to communicate and market their products through specialised agencies will contribute to the growth of NOLO-alcohol category products.

Read also: Who are the Influencers of consumer behaviour in today’s wine business?

Originally from Latvia and based in Italy for more than 30 years, for about twenty, I worked as a food and wine consultant. For four years, I directed the Tola Rasa fine dining restaurant in Padua. I am a professional sommelier of the two most important Italian associations, AIS and FISAR, DipWSET (WSET Level 4 Diploma in Wines, London School), Valpolicella Wine Specialist, Wine Judge, Official Port and Cava Educator, Langhe Wines Ambassador, SSA Certified Sake Sommelier and Rice Sommelier.

I am a founder and project manager at Tooscans, e-commerce dedicated mainly to Tuscan products, with offline distribution. I created the Sparkling Life website, which is published in three languages and focuses on Italian food and wine excellence. I also deal with consulting and communication, digital mktg & branding strategy, SEO, Google Ads, social media marketing & Adv and wine education.

Find out more: Irina Mihailenko