Will ‘mocktails’ help drive the non-alcoholic spirits category?

It is not just among younger drinkers where habits are evolving; more mature drinkers too are becoming conscious of their intake and more aware of the implications of their drinking levels on their health and wellbeing.

Change always throws up opportunities and the temperance trend may have conceived a new concept in ‘zero-proof’ spirits. Like a small island created after a volcano eruption, this new category has just appeared.

The zero-proof spirit is a drink that is distilled using all the same processes but delivers a non-alcoholic product with all the botanical experience of a premium gin or other spirit. It meets the need of drinkers that want to go through the same ‘ritual’ of consuming an alcoholic drink, but do not want to have a ‘drink’. It addresses the fading stigma of looking out of place in a social environment and provides an alternative to regular soft drinks or even adult soft drinks.

It was when the founding brand of the category, Seedlip, won a listing in highbrow London department store Selfridges and was able to test the hypothesis, that creator Ben Branson realised he could well be onto something.

The idea has been endorsed by some heavyweight players. Diageo bought into the idea very quickly and through innovation incubator Distill Ventures, snapped up a 20% stake in Seedlip in 2016. Meanwhile last year, Pernod Ricard UK partnered with South African non-alcoholic gin start-up Ceder’s.

Imitation is the sincerest form of flattery and 2018 has triggered a gold rush of new products with their own take on the category. In the UK new products like Borrago have taken up a lot of column inches, but it is not just the UK where innovators are at work. In Australia gin-influenced Brunswick Aces arrived recently; Columbia has inspired Caleño; and Herbie Virgin gin has reportedly been very well received in Denmark.

One launch that catches the eye is Stryyk. The product comes in two variants – Stryyk Not Gin and Stryyk Not Rum – and was started by Alex Carlton who founded and sold Funkin Cocktails.

Additionally, ‘mocktails’ are very much in vogue in the US and many believe that the arrival of alcohol-free spirits to use in these mocktails will propel the category forward. In London, the Savoy’s American Bar features Seedlip in as many as four non-alcoholic cocktails. Borrago has also recognised the cocktail angle and even have their own cocktail book.

Cocktails could prove the catalyst for the category, but it remains very early days for the non-alcoholic spirit. Will the category realise its potential, or will brands sit at the back of the bar gathering dust with Sheridan’s?

Diageo has shown a lot of faith and gave Seedlip a high-profile launch in the US and will certainly back the category as it emerges. Other drinks players will also want to be seen to be supporting the non-alcoholic spirits category and we are likely to see some of the start-up products that have arrived being bought out. The high margins will also be appealing.

The category is certainly going with the wind and the numbers in the IWSR’s recent low- and no-alcohol global consumer survey would suggest that the consumer climate is right for such products. The IWSR is already tracking Seedlip in Australia, Sweden, the Netherlands, France, Italy, Greece, Spain and Portugal indicating that this may well not just be a UK and US phenomena. There must also be pronounced possibilities in the non-drinking parts of the Middle East.

‘Dry January’ as well as ‘Dry July’ and ‘Sober October’ is growing traction in both the US and the UK. These extended periods of abstaining from alcohol will provide a major focus for marketing and give operators a chance to showcase the category every year.

The main threat to the development of the category is price. Despite their immunity to duty, retail price is in line with the premium spirits segment and this might ultimately put a ceiling on how mainstream the category can become.

A survey from IWSR Drinks Market Analysis reports that around a quarter of 18-24 year olds in the UK claim not to drink alcohol.