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Bottoms Up: Alcohol-Free Liquor Has A Good Shot At Success

A generation after alcohol-free beer surprised the beverage market, it may be time to go one step stronger.

What do you drink when you don’t feel like drinking?
What do you drink when you don’t feel like drinking?
Marie-Josée Cougard

PARIS — Pernod Ricard, the France-based global liquor giant, is launching "Ceder's." It is not, however, a new brand of booze, but alcohol-free gin. It will now be distributed in ten countries after initial testing on the UK market.

Another world leader in wines and spirits, Diageo paved the way for non-alcoholic liquors before the French group, as industry experts are unanimous that this is a new beverage trend with major potential.

We already know about the growth of alcohol-free beer. Now the market looks to be ready for alcohol-free liquors. When the two world leaders of alcohols and spirits get into this huge business, estimated around 878 billion euros, one can safely talk about a new market. Even tonic producers, like the utmost secular British company Franklin & Sons, adapted their products to this new generation of beverages.

Alcohol-free liquor has established itself in nightlife searching for original experiences. Experts all bet on an exponential growth. The movement started in the United States —"as always' commented Pernod Ricard. "It's the biggest market in wines and spirits. Trends always start there." The UK, known for its drinking excesses, followed. Now it's ready to spread worldwide.

After being very successful in the UK among wine sellers and bars, Pernod Ricard started to sell its Ceder's, an alcohol-free gin, in ten other countries including France. A few weeks earlier, they started to sell Celtic Soul, an alcohol-free whisky, on the British market. And in Australia, the French group tested Flight, a low-alcohol wine (2°) from its subsidiary Jacob's Creek.

As for Diageo, they took control last August of Seedlip, the first alcohol-free liquor to appear on the market, for an undisclosed amount. Seedlip is a gin invented back in 2015 by Ben Branson who aimed to answer the question, "What do you drink when you don't feel like drinking?"

The British heavyweight quickly took an interest in this newcomer by acquiring a minor participation in the company's capital as early as 2016. For Diaego, which has been in the alcohol business for more than 250 years, this choice speaks volumes. The alcohol-free beer market continues to expand, to the point where AB InBev, the world's leading brewer, projected to make 20% of its revenue from it by 2025, compared to 8% in 2019.

It may be a blessing in disguise for the industry.

Are we witnessing a fundamental change of direction? "Of course not," say industry heavyweights, unprepared as they are to face a different market. Yet the facts speak for themselves: Alcohol consumption is diminishing in many countries. The moderation tendency is indisputable, and the phenomenon involves every age group. In Russia, alcohol consumption dropped from 17 liters to 14 liters per year over the past decade, according to the World Health Organization. In France, it has dropped 30% over the past 20 years, to below 12 liters a year per person. In the UK, it fell 18% between 2014 and 2018. An estimated 25% of 16-24 years old do not drink alcohol.

It can be seen as a blessing in disguise for the industry, as alcohol-free is not under the weight of alcohol taxes — which vary between 60% and 80% depending on the country. Diageo's Seedlip sells for $52 per liter. The cocktail is $1. In 2015, they sold 1,000 flasks at Selfridges in London; three years later, the British leader was selling 30,000 bottles of its alcohol-free gin in 25 countries.

Alongside this "zero" trend, low-alcohol spirits are beginning to spread as well. In 2018, the group created two "ultra-low" gin & tonic (0.5°) under the brand Gordon. And Diageo just launched a sugar-free Smirnoff vodka with real fruits essences (23° and 87 calories). "Ideal for long summer nights," says the company.

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