The year of no- and low-alcohol wine?

While still lagging behind the more successful beer and spirits categories, global demand for no- and low-alcohol wine is on the rise. As the EU readies to reform de-alcoholised wine production, the European wine industry takes stock of future opportunities for the no- and low-alcohol wine category. Jacopo Mazzeo reports.

No- and low-alcohol drinks become more important as lifestyle products
No- and low-alcohol drinks become more important as lifestyle products

“There is a clear pattern emerging in terms of consumers looking more towards low- and no-alcohol options,” says Lulie Halstead, CEO of wine consumer research and insights, Wine Intelligence. “It’s driven by three key consumer trends: health, control and taste. We want to drink stuff that is better for us, be it in fewer calories, with more ‘natural’ ingredients or to have fewer headaches. We want to drink things that won’t cause us to lose control, whether it is because we value this control for its own sake, or just want to avoid being embarrassed by a legion of social media uploads.”

Over the past few years, as consumers shift towards healthy eating and drinking by cutting down on their alcohol intake, interest in the no- and low-alcohol drinks category has been steadily on the rise. No- and low-ABV wine options, however, have been lacking when compared to the more successful beer and spirits alternatives, an issue that Halstead ascribes to the category’s struggles to pass the taste test and to the fierce competition of other no- and low-alcohol beverages. “When considering the driver of taste, we can see why no- and low-alcohol wine is currently struggling to meet the benchmark for consumers. ‘I dislike the taste’ is still a purchasing barrier for nearly a third of the global wine-drinking population,” says Halstead.

Despite the challenges however, Wine Intelligence’s latest Opportunities for Low- and No-Alcohol Wine report shows potential for growth for the category, as it notes that there is an “unmet consumer need” when it comes to no- and low-alcohol wine.

Wine producers across Europe confirm increasing demand too. Philip Cox, co-owner of Romania's largest winery, Cramele Recas, reports growing interest towards his recently launched no-alcohol white wine, “especially over the past 18 months. We’re just responding to what our customers want.” Meanwhile, Bernhard Jung of pioneering alcohol-free winery, Carl Jung, has also been experiencing skyrocketing demand over the past two years. “We’re seeing interest across several markets. And there’s less stigma within the wine industry. They don’t see us as people who want to do harm to the sector any longer. Mostly because quality has gotten better and they realise that this is a profitable market.”

 


Philip Cox, co-owner of Cramele Recas in Romania

Riding the wave in Bruxelles

In response to the growing demand for grapevine products with lower alcohol, the European Union is set to grant PGIs and PDOs rights for production and commercialisation of de-alcoholised wine below the current minimum threshold of 8.5% ABV. It’s a historic turning point for the no- and low-ABV wine category, which will come into play on 1 January 2023 as part of the EU’s upcoming Common Agricultural Policy reform (CAP). European Federation of Origin Wines (EFOW) advisor Daniela Ida Zandonà explains that with the new CAP reform, “table wines will be allowed to go below 0.5% ABV, while PGI and PDO wines will be granted rights to de-alcoholise down to an ABV between 0.5% and 8.5%.” She points out that it will be up to the single denomination to decide whether to welcome or ignore the new regulations.

“This is a pivotal moment, exciting for consumers and industry alike,” says Stuart Elkington, the founder of specialist no-and-low drinks UK distributor Dry Drinker. “Building credibility in the minds of consumers is key. Currently, many think of no- and low-alcohol wines as merely grape juice, and of course it's so much more.” According to Wine Intelligence’s report, the belief that no- and low-alcohol wine is “not really wine” is indeed one of the main barriers that stop consumers from engaging with the category. “People would definitely buy a lower-alcohol version of the [PDO] wines they usually drink,” agrees no- and low-category specialist Christine Parkinson. “[The proposed CAP reform] would be an absolute game-changer for the category. It will be interesting to see which region [integrates the new regulations] first: I think that once it happens the floodgates will open, because the demand will really be there.”

Winery Carl Jung offers a broad range of alcohol free wines

 

Scepticism with denomination of origin

Despite noticeable enthusiasm within the no- and low-ABV niche, European producers have welcomed the EU’s proposal with widespread scepticism. “Honestly, wine is wine, Chianti is Chianti, Bordeaux is Bordeaux,” says Giovanni Busi, president of the Consorzio Vino Chianti. “I find the idea of allowing denominations to commercialise de-alcoholised wine just absurd. Wine is obtained through the transformation of sugars into alcohol. If you take that alcohol away, it’s no longer wine. And we also need to take into account a denomination’s tradition and history,” he adds. “I am not opposed to de-alcoholised wine, but it is just not good for PDOs.”

Busi isn’t alone in his scepticism. Flavio Geretto, global export director at renowned Prosecco producer Villa Sandi, admits that the growth of the no- and low-ABV category is a trend to watch closely, yet opposes the idea of integrating de-alcoholised wine into well-established denominations. “Wine has a millenary heritage and tradition, and alcohol is a big part of that so I don’t believe that low- and no- can be a viable path for denominations. This is a clear case of politicians being out of touch with those who actually work in the industry.”

While “dangerous” for well-established denominations, however, Busi believes that the EU’s proposal could work for some of Europe’s larger PGIs, while Geretto speculates it could represent a real opportunity for lesser-known denominations to stand out of the crowd as respected sources for good quality de-alcoholised wine.

 

Future opportunities

Jung claims his business would certainly profit from the new regulations but argues that the EU’s CAP  reform isn’t necessarily key to the no- and low-alcohol wine category’s prosperous future. In most of his largest markets – the Middle East, Asia and Africa – consumers “don’t seem to look much for denominations”, he says. Meanwhile, in Europe, the category can find opportunities in markets where alcohol is subject to high taxation or where sales are tightly regulated – such as Finland, where alcoholic drinks above 4.8% can currently only be purchased at the state owned Alko stores – and “anywhere the consumption of alcohol has been banned. For instance, on Swiss motorways’ cafés and restaurants,” as Geretto points out.

For Parkinson, no- and low-alcohol wine brands could find significant opportunities in long-established European wine markets too. In line with Wine Intelligence’s report, which shows that pairing no- and low-alcohol wine with food is one of the principal purchase motivations for over a third of global consumers, Parkinson believes that no- and low-alcohol wine can represent a legitimate alternative on the dining table, where other no- and low-alcohol beverages struggle to compete. “People are coming to no- and low-alcohol wine as just a version of wine, so the occasions when they would drink wine are the occasions when they would be interested in drinking no-and-low ,” she says. “You’re never gonna drink a red when you come back from a run, that’s a beer occasion…The opportunity is within the traditional wine space.”

 


Flavio Geretto, global export director Villa Sandi

Wine and food pairing

Dry Drinker’s Elkington points out that some of the brands he works with, most notably the Barrel and Drums range, are explicitly marketed as ideal food pairings: “The brands are getting behind this messaging, and over the next 12 months, we’re gonna see more and more of that. Most [consumers] like wine with food – that’s where they find the most enjoyment – and as we go towards the summer months, they take their alcohol-free wine for eating-out occasions more and more. We see them in picnic baskets or at barbecues,” he says, stressing that there is also a sizable market of restaurants without alcohol licenses that still want a credible drinks list to tap into.

Parkinson agrees that the on-trade represents a profitable channel for no- and low-alcohol wine: “In the hospitality industry, the opportunity with food is obviously an ideal one because a restaurant can always offer pairings, whether it’s à la carte or as a tasting menu by the glass,” but add that further opportunities can be found in other traditional wine-drinking occasions, such as celebrations and religious gatherings: “We live in a world where everyone wants to be scrupulously inclusive, so anybody who wants to organise an event, whether for 12 or 1,200 people, is now very concerned that they have the vegan option as well as the non-alcoholic options. There’s absolutely no doubt that people booking in hotels and venues will be completely open to a list of no- and low-products, including wine, as part of the package that they’re offered, and will actually expect that.”

As demand for lower-ABV beverages increases and with the unprecedented opportunities offered by the proposed CAP reform, Elkington says that a no- and low-alcohol wine offering is set to become an expected part of any drinks portfolio: “Younger wine drinkers are the drivers behind some of the changes we see in today's drinks sector. It might be worth jumping on the movement so as not to be left behind!”

Jacopo Mazzeo

 

 

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