Tag Archives: Non-alcoholic beer

Craft Beer and the Anxiety Economy

On a recent trip to my local grocery store I picked up a 6-pack of Run Wild IPA. I drink a lot of IPAs, so this was not a particularly unusual choice. Except that it was – this particular IPA was non-alcoholic. It was brewed by Athletic Brewing Co. If you are unfamiliar with Athletic Brewing Co., they started out in Stratford, CT in 2017. They grew quickly and today are the 13th largest craft brewery in the country – quite impressive for a brewery whose beer is all non-alcoholic. Such has been their success that they closed down their Stratford brewery and opened new ones in Milford, CT and San Diego, CA. Their success is indicative of the growing popularity of non- and low-alcohol beer in the United States. In 2021, sales of non-alcoholic beer increased by nearly 32%, while sales of low-alcohol beer grew by 4.5%. The Alcohol and Tobacco Tax and Trade Bureau defines a non-alcoholic beer as one that contains less than 0,5% of alcohol by volume. So, what was I doing, purchasing a non-alcoholic beer? Well, recently, I have been consuming quite a few of the IPAs from New Belgium’s Voodoo Ranger series. Those I have been drinking have generally come in at around 9% ABV. Personally, a couple of these are sufficient for me in one sitting, so I thought that having a non-alcoholic option for my third and fourth beer might not be a bad idea. An added bonus, if you are trying to watch your calorie count, is that Run Wild IPA only has 65 calories.

Enjoying a Run Wild IPA from Athletic Brewing Co.

After I purchased my Athletic 6-pack I was surfing the internet when I came across an NPR article on the increased popularity of non-alcoholic beers. As I was scrolling through it, a term that I had never heard before – the “anxiety economy” – caught my attention. According to NPR, the anxiety economy is a catch-all label for “for a set of products — like meditation apps, squishy stress balls, self-help books and online psychiatry services — that are benefiting from increasing numbers of folks striving for lower levels of anxiety and better physical and mental health.” Apparently, anxiety, or at least awareness of it, is on the rise and a whole industry has evolved to meet the needs of those suffering from it. A 2018 study by the American Psychiatric Association found that the national anxiety score (which ranges from 0-100) stood at 51, a five-point increase over the previous year. In particular, Americans were anxious about their health, safety and finances. And this was before the onset of COVID-19. Not surprisingly, the COVID-19 pandemic pushed anxiety levels to new heights. Of course, it’s not just Americans who suffer from anxiety. In Great Britain, around 30% of the population experience an anxiety disorder at some point during their lifetime. Certain groups of people are more likely to experience anxiety than others. For example, people of color tend to be more anxious than Caucasians, people on Medicaid are more anxious than people with private insurance, and Millennials are more anxious than Baby Boomer or Gen-Xers.

The above referenced survey by the American Psychiatric Association found that personal health was a common source of anxiety. In recent years, health consciousness has been a key driver of the growing popularity of non- and low-alcohol beer. A new survey by Nielsen found that close to a third of consumers seek out healthier options – including beer – when they go grocery shopping.  Worldwide, the market for non-alcoholic beer which stood at $22 billion in 2022, is expected to rise to $40 billion in 2032. Folks seeking out non-alcoholic beer are part of what some have termed the “Sober Curious Movement“, while Mark Meek, CEO of IWSR Drinks Market Analysis refers to it as a “moderation trend“. Beer dominates the non/low alcohol segment, accounting for over 90% of sales. An indicator that non-alcoholic beer is becoming increasingly mainstream was the recent announcement that JetBlue would become the first major US airline to offer its passengers non-alcoholic beer. Starting this month (May 2023) JetBlue passengers will be able to enjoy an Upside Dawn Golden Ale while enjoying the view at 30,000 feet. The beer is brewed by (you’ve guessed it) Athletic Brewing Co.

Every year, after the excesses of the holiday season, we have “Dry January”, a month when consumers of alcohol are encouraged to abstain. Dry January has its origins in the United Kingdom and is the brainchild of Alcohol Health Alliance UK, who actually trademarked the term in 2014. Interestingly, Finland introduced the idea of “Sober January” in 1942 as part of its war effort against the Soviet Union.

Not everyone is necessarily onboard with low- and non-alcoholic beer. In a very thoughtful essay for Slate.com, Ian Lecklitner confesses to having a growing vendetta against non-alcoholic beverages. He cites several issues around non-alcoholic drinks, suggesting that they may not be the panacea that they appear. For former alcoholics, the smell (of hops for example) can have a triggering effect. Yet, according to one observer, “those recovering from alcohol addiction are clearly in the target market for non-alcoholic beverages.” Lecklitner makes clear his disdain for an industry that he accuses of “profiting off of addiction’.

While I prefer to not enter into the ethics of non-alcoholic beer, I will say that the latter have improved considerably in recent years. I can recall drinking the occasional O’Doul’s in years past and being singularly unimpressed. As one writer observed, “brewers are now making non-alcoholic beers that are packed with flavor, thanks to new technology and techniques that are reinventing a category that once felt like purgatory.” Apparently, this is due to a raft of innovations such as vacuum evaporation, filtration etc., which allow brewers to extract alcohol from the beer while retaining much of the beer’s intended flavor. It is certainly nice to have a tasty option when, for whatever reason, more alcohol (or any alcohol) is not desired.

Beer for the Modern Adult?

“Beer for the modern adult” – that’s how Bill Shufelt, owner of Athletic Brewing Co. in Statford, CT, describes his brewery’s beer.  All of the beer brewed at Athletic is non-alcoholic. While non-alcoholic beer may seem like an oxymoron it, along with its cousin, low-alcohol beer, is trending in the marketplace. And not just in the U.S market, but in overseas markets as diverse and as different as Belgium and China. Before exploring the numbers and reasons behind the growth of low-alcohol and non-alcoholic beer let’s start with some definitions.

In the United States, the Alcohol and Tobacco Tax and Trade Bureau defines beer as “beer, ale, porter, stout and other similar fermented beverages (including sake and similar products) containing one-half of one percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from substitutes for malt.” It is, in my opinion, a quirky definition, but let’s not get into that here. They key point, for present purposes, is that for beer to qualify as beer it has to have an ABV of at least 0.5%. So everything below 0.5% ABV is either non-alcoholic and low-alcohol beer. Technically, non-alcoholic beer has an ABV of 0.0%, although the Oxford Companion to Beer notes that, “technically speaking, there is no such thing as non-alcoholic beer because beer contains alcohol by definition”. For the sake of simplicity, and for the purposes of this blog entry, I will use the term low-alcohol beer to refer to all beer under 0.5% ABV, and 0.0% ABV to refer to non-alcoholic beer. One of the challenges I found in researching this piece is that lines between the two are often blurred – so for example the term non-alcoholic beer is sometimes used in such a way that it also includes non-alcoholic beer.

Low-alcohol/non-alcoholic beer is not a new concept, of course. During Prohibition, it was in fact legal to brew beer that contained less than 0.5% alcohol – so-called ‘near beer’.  In more contemporary times low alcohol beer has been produced in both the United States and Europe.  Those of us who live in the United States are familiar with O’Douls, a low alcohol beer (<0.5% ABV), introduced by Anheuser Busch in 1990. My European friends are probably more familiar with low-alcohol brands such as Kaliber which is brewed by Guinness and St. Pauli N.A., brewed by Beck’s (which is now owned by AB InBev).

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O’Doul’s – A low alcohol beer introduced by Anheuser Busch in 1990

When I was drinking mass-produced beer in the 1990s, low alcohol beer had a bad reputation. It wasn’t so much that it didn’t give you a buzz (it wasn’t meant to after all), but rather that it just didn’t taste all that good. Toady the low alcohol beer market seems to be booming, and those who prefer low-alcohol beers no longer are restricted to an awful tasting product.

Just how popular is low-alcohol beer. Globally, the market for low alcohol beer was $13 billion in 2016; by 2024 it is projected to be $25 billion. And it’s growing popularity seems ubiquitous. In Belgium, in 2018,  non- alcoholic lagers and wheat beers experienced a thirty percent market growth. Non-alcoholic and low alcohol beer is also gaining in popularity in China. In 2016, twenty-nine percent of new beers launched were in one of these two categories. Approximately eight percent of the beer produced by AB InBev is low or non-alcoholic. They project that by 2025, that will increase to twenty percent.

The increasing popularity of low and non-alcoholic beer appears driven by the consumers prioritizing healthier lifestyles. Why don’t they drink a healthier non-alcoholic alternative, I hear you ask. It is true that  some juices may provide healthy alternatives to beer. They do not, however, deliver the lifestyle image provided by beer. Beer projects a particular lifestyle image; consuming low-alcohol or non-alcoholic beer protects that image, while not compromising an individual’s health.

The recent upsurge in interest in low and non-alcoholic beer has prompted some of the world’s major breweries to launch new products to add to their existing beer portfolios. In January 2019, the world’s second largest brewer, Heineken, will launched a new non-alcoholic beer in the United States – Heineken 0.0 (pronounced zero zero). The new beer, first introduced into Spain in January 2017, is now available in over thirty countries. Heineken 0.0  has only sixty-five calories. It also goes a step further than its low-alcohol cousins, in that it contains zero alcohol. In other words, the ABV is 0.0%. In marketing the new beer, Heineken suggest that people drink it at times when perhaps they would normally not drink beer – such as during an office lunch or after a workout. Other potential markets for non-alcoholic beer include drivers of motor vehicles, pregnant women, people taking medication, athletes,  and those who abstain from alcohol for religious and other cultural reasons. Studies in Europe also show that avoiding a hangover and keeping in control are factors driving demand for non-alcoholic and low alcohol beer.

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Heineken Zero Zero was recently introduced into a number of markets, including the United States

The growing demand for non-alcoholic and low alcohol beer is part of broader taste shifts impacting the alcohol industry.  According to CNBC reporter Angelica LaVito, “consumers are increasingly shunning beer and instead drinking wine, spirits and hard seltzers, which they perceive as healthier than beer.” The shift away from beer and  towards wine can be clearly seen in the two graphics below. In the first graphic you can observe the general decrease in per capita alcohol consumption, particularly beer, in the United States in the post-1980 period. The second graphic shows that in 1993, 47% of American who drank alcohol stated that beer was their preferred alcohol of choice. This compared to 27% preferring wine and 21% preferring liquor. By 2017, the percentage preferring beer had fallen to 40%, while the percentage preferring wine and liquor had risen  to 30% and 26% respectively.

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This is a trend that is also occurring in other countries. A recent article on the BBC website was titled, “Under-25s turning their backs on alcohol, study suggests”. The article reported on new research at University College London which found that the percentage of 16-24 year olds who do not consume alcohol increased from 18% in 2005 to 29% percent in 2015. In Belgium, a recent survey revealed that sixty-two percent of Belgians felt that they consumed too much alcohol.

In the United States, we have observed the growing popularity of so-called session beers  – beers that are less than 5% ABV. A 2016 survey by Nielsen and CGA Strategy found that 45% of craft beer drinkers prefer session over beers with a higher ABV. Of the twenty-five fastest growing craft beer brands in 2016, thirteen were session beers. Almost every craft brewery produce session beers. Many have went to great efforts to ensure that from a taste perspective that they are an acceptable alternative to higher ABV beers. Thornbridge Brewery in Bakewell, U.K. disposed of four batches (sixty thousand bottles) of beer in their quest for a palatable low-alcohol beer. The end result was their Big Easy, a very drinkable Pale Ale with an ABV of only 0.5%. Athletic Brewing Co. of Stratford, CT is a craft brewery that produces only non-alcoholic beer.  Athletic Brewing’s flagship beers are an IPA and a Golden Ale, while season offerings include an Autumn Brown Ale and a Harvest IPA. Crafting a non-alcoholic beer that did not compromise on flavor was a challenge for Athletic’s owner Bill Shufelt. It meant producing over one hundred test batches on home brewing equipment, before he was satisfied.

Market signals clearly demonstrate growing consumer demand for low-alcohol and non-alcoholic beer. This shift in consumer preferences impacts every brewery, from the smallest microbrewery to  the largest multinational. And they are clearly responding, witness the seemingly growing number of non-alcoholic and low alcohol beers that are now available. Furthermore, breweries are working very diligently to ensure that those who choose non-alcoholic and low alcohol beers are not being compromised when it comes to taste. And it seems to be resonating with some consumers. Thirty-one percent of Germans between the ages of eighteen and twenty-four 18-24 agreed that non-alcoholic and low alcohol beer tastes just as good as ‘regular’ beer. More and more, we are seeing beer writers helping consumers navigate the  increasingly crowded low-alcohol and non-alcoholic beer market by tasting and rating the various offerings.

Further Reading:

Ng Fat, Linda, Nicola Shelton, and Noriko Cable. 2018. Investigating the growing trend of non-drinking among young people: Analysis of repeated cross-sectional surveys in England, 2005-2015. BMC Public Health, Volume 18:1090.