It’s not just Dry July: Non-alcoholic beer sales are exploding, Australian brewers and retailers say
Non-alcoholic beer makes up more than 1% of beer sales at the retail level, and industry observers expect that figure to hit 2% by 2025.
Business is good for Bridge Road Brewers. The Beechworth-based craft beer experts last week closed a $1.5 million equity crowdfunding round, powered by the success of its hospitality business and its broad range of porters, pilsners, and IPAs. Up next: a fresh development in Melbourne, extending its reach to even more craft beer connoisseurs.
It might be hard for the Victorian company to play favourites among the two dozen beers its roster, given the role they’ve played in Bridge Road Brewers’ development. But one product stands out: the Free Time pale ale.
Introduced in 2019, the blue-and-white can now accounts for one in six of Bridge Road Brewers’ wholesale sales. It’s a remarkable growth trajectory for a new beer on the market. It’s even more impressive given Free Time is alcohol free.
Thanks to a major shift in Australian drinking habits, the national beer market is deep into an zero-alcohol craze. And as thousands of drinkers choose booze-free options for Dry July, retailers and brewers big and small predict products like Free Time will only become more popular.
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Alcohol-free beverages tipped to hit 2% of the market in 2025
The growth of Australia’s alcohol-free beer market is a well documented trend, but its expansion into the mainstream still has the power to stun.
While ‘indies’ like Bridge Road Brewers and Heaps Normal pioneer the non-alcoholic craft beer market, Australian beverage giant Carlton United Breweries counts its own booze-free beers as some of its most successful product launches in its history.
Since CUB launched Carlton Zero in 2018, the company has watched sales of non-alcoholic beers in Australian bottle shops grow 100 times over, a spokesperson told SmartCompany.
“We are proud to be at the forefront of what has become a significant Australian-wide movement,” they said.
That growth comes from an admittedly small base: until relatively recently, zero-alcoholic beer were seen as niche, specialty brews, with consumers left to choose from a small number of middling options.
Now, non-alcoholic beer makes up more than 1% of beer sales at the retail level, and industry observers expect that figure to hit 2% by 2025.
That would equate to more than a 100,000 litres of non-alcoholic beer, building a market worth tens of millions of dollars, with the bulk of that growth occurring in just a few short years.
Booze-free options now competing with international craft beer in terms of sales
Retailers tell the same story.
Endeavour Group, the parent company of major chains Dan Murphy’s and BWS, counted more than 200 non-alcoholic beverages on its shelves in July 2021.
“Now, we have about 330 options so there’s even more great zero alcohol drinks to choose from,” said Tim Carroll, Endeavour Group director of buying and merchandising.
“We have seen sales of zero alcohol products grow more than 150 percent in the last 24 months,” he added. “Zero alcohol products remain one of our fastest growing categories.”
So powerful is the market transition that Dan Murphy’s even launched its first-ever bar in Melbourne this year, dedicated to non-alcoholic options.
All told, the shift means non-alcoholic products are now competing with international craft beers and aperitifs as a share of sales.
Endeavour Group’s hospitality arm, which counts more than 340 venues nationwide, has also faced an 130% increase in non-alcoholic demand over the past 12 months, Carroll says.
Lifestyle changes at the forefront of alcohol-free revolution
Those figures run parallel to some official statistics on Australia’s drinking habits.
In March, the Australian Bureau of Statistics revealed that 9.8% of Australians over the age of 18 believed their alcohol consumption had increased in the 2020-21 financial year.
By comparison, almost 24% said their alcohol use had dropped.
Rachael Layton, an ‘alcohol mindset’ coach based in Brisbane, says drinkers are changing their approach to alcoholic products after generations of drinking culture at the forefront of Australia’s self-image.
Where drinkers may have once cut back when alcohol consumption seriously impacted their day-to-day life, “more and more people are seeing that they don’t have to hit a rock bottom to decide to either cut back or cut out altogether”, she says.
“So many people are doing it for a lifestyle choice, almost a health choice, rather than because they ‘have to’.”
The fact many are ‘cutting back’, and not ‘cutting out’, is also notable.
Layton says her “non-prescriptive” coaching philosophy differs from 12-step programs like Alcoholics Anonymous, which ask participants to commit to sobriety.
This kind of moderation, particularly among younger drinkers, is being observed by industry players, too.
“The rise of zero alcohol drinks is part of a wider trend we have seen for some time where customers choose to drink less but better,” Endeavour Group’s Carroll said.
And brewers, whose fortunes were built on boozy products, are celebrating a new growth market.
“When you look at the individual, the macro trend of health and wellbeing has been gaining momentum for the better part of the past decade,” said Ben Kraus, owner of Bridge Road Brewers.
“Our first response to this trend was developing one of the country’s first mid-strength IPAs, Little Bling, back in 2015.”
“The moderation trend is great,” the CUB spokesperson said. “It has presented us with enormous opportunities to innovate and give beer lovers non-alc beers that actually taste like beer.”
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That is not to say non-alcoholic beverages will suit everyone looking to wind back their consumption.
Layton says products like buzz-free beer might help drinkers reduce their intake “in a less obvious way, so they don’t have to shout it from the rooftops that they’re not drinking”.
Still, “if they’re giving up altogether, rather than cutting back, it could be triggering” to drink something which tastes near-identical to the full-strength version.
“I do always say to people when they’re trying it out to be very careful,” she added.
Layton says Dry July can help drinkers see the benefits of taking a break from alcohol, helping them “tune in” to life under the influence.
And when August rolls around, there will be plenty of products on the bottle shop shelves for those keen on an alcohol-free alternative.
If you would like free and confidential advice about your alcohol use, contact the National Alcohol and Other Drugs Hotline on 1800 250 015.
