Low and alcohol-free beers have been on the rise in Europe for some time. Major beer manufacturers are launching low and alcohol-free versions of their key brands, with numerous craft brewers starting to tap into this trending category.

Notably, however, Japan is the second-largest alcohol-free beer market in the world.

Although relatively slow compared to European countries, the market has been continuously growing in recent years. Interestingly, innovation trends in Europe and Japan are noticeably different, indicating a unique opportunity for manufacturers.

According to GlobalData, many European countries have seen prominent growth of low and alcohol beers, and the UK is one of them. The shelf space devoted to these beers has been expanding, and this year the UK’s major craft beer player BrewDog has expanded its low-alcohol craft beer offer with Punk AF, in addition to its previous low alcohol product Nanny State, launched in 2009. There are also UK craft brewers that only produce alcohol-free products. For example, London-based Nirvana Brewery currently offers five alcohol-free variants with different beer types, including IPA, Pale Ale, Stout, and its own Buchabeer that is a blend of pale ale and kombucha fermented drink.

With the emerging involvement of craft brewers, the alcohol-free beer category in the UK can be seen to a degree as gaining a new sense of credibility, as non-alcoholic beers seek to break their historic association with sensory inferiority. These highly sensory-driven craft beers are thus gaining some traction among younger adult consumers, given the combination of premium sensory experience, practicality within busy lifestyles, and health/wellness alignment.

In Japan, health is the key motivation for alcohol-free beer innovation. 0.00% ABV is a norm in the category, and most Japanese brands offer multiple “zeroes,” such as zero calorie and zero sugar to emphasize this. One of key brands, Suntory All-Free, has, for example, added a new functional option containing rosehip extract that helps to reduce visceral fat. The brand already has a collagen-fortified variant targeting women; this new variant is aiming to appeal to consumers who are concerned about their BMI.

Japan’s beer market is overall heavily lager-driven. It is, however, shrinking because the core users of beer are getting old and becoming increasingly health-conscious; meanwhile, younger consumers are becoming less fond of conventional beer. Alcohol-free beers have been resonating with older drinkers as a new healthy alternative. Manufacturers have been pursuing flavour improvements to make alcohol-free options taste close to alcoholic lager, while retaining health positive attributes.

While the craft beer movement has landed Japan and consumers are becoming more familiar with craft beers, its home-grown brewers are not tapping into the alcohol-free opportunity yet.

Comparing the difference in low/no-alcohol beer innovations between Europe, such as the UK, and Japan, manufacturers in both markets may see the opportunity for innovation migration from East to West as well as West to East. Overtly health-driven 0% alcohol beer messages could appeal to health-conscious consumers in the West, while more premium and individual craft-style brews can entice Japan’s sensory-driven young consumers and nascent craft beer fans.


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