The lowdown on low ABV lagers

Improvements in technology and a great demand for low-alcohol drinks in general means some licensees are leaving more fridge space for lighter beers. Nigel Huddleston reports

The moral panic over binge drinking threatens to knock even more lumps out of the alcoholic drinks market, but it could play right into the hands of low-alcohol beer.

A shift towards lighter and lower ABV drinks has been witnessed in both beer and wine in the past few years, and genuine low-alcohol beers — legally defined as those below 1.2% ABV — have been enjoying a quiet reintegration into society on the back of that.

The road to credibility has not been easy for alcohol-free and low-alcohol lager. The market was born with Barbican from Bass back in the 1980s and Guinness-brewed Kaliber was one of its first serious competitors.

Barbican has gone the way of the Sinclair C5 and back-combed hair in the meantime, but Kaliber has hung in there to remain as the market leader today.

On its way to the top, it saw off an early plethora of challengers — anyone remember Swan Light or Carlton LA? — many of which were doom-ed to failure because they could never match up to the real, full-strength thing on flavour.

Advances in brewing technology over the intervening 20 years have cured many of those problems and as we enter the second decade of the 21st century, a new glut of brands is rebuilding low-alcohol beer as more than just a one-brand category.

Walk into your local Tesco and the drinks aisle features a wall of low-alcohol beers,

several of which are offshoots of major lager brands such as Beck's and Holsten — and if the Tesco buyers are taking notice you know something's stirring.

The first wave of low-alcohol beers emerged from concerns about drink-driving when it was a much bigger presence on the political landscape than it is today.

Today, drink-driving is still a major driver of on-trade consumption, but consumer health-consciousness, the binge-drinking hysteria and the clear-head-after-lunchtime market all pull in low-alcohol beer's favour.

Peter Karsten, marketing director of Clausthaler distributor Surfax, says: "There is undoubtedly a move towards lighter, lower-alcohol drinks and healthier lifestyles, which is benefiting the low-alcohol beer market.Low-alcohol choices are being seen as a drink in their own right rather than the drink-driving distress purchase of old."

While the market may be catching up with low-alcohol beers, there's also been a surge in credibility for soft drinks in the on-trade. In most pubs, it's no longer seen as bad form to sit sipping a Coke, a J20 or a glass of water, and the range available has grown.

What that means is that while the low- or no-alcohol opportunity may have grown, so too has the competition.

On the face of it, the sales figures don't seem too impressive. CGA Strategy figures for the year to February show packaged no and low-alcohol beers (NAB-LABs) down 8.2% — but set against declines of more than 20% for premium packaged lager and 11.3% for standard packaged lager, the picture isn't that bad.

Many major brewers' brands are in decline, although Beck's Blue and Holsten Alcohol-Free only marginally so.

Real star​

Adnams-distributed Bitburger Drive is the real star of the category, with sales up by 38% year-on-year.

AB-InBev has hacked into the trend for lighter ABV drinks with the launch of 4% versions of premium lagers in the form of Beck's Vier and Stella 4%, and its supported brand in the genuine no-alcohol category is another Beck's offshoot.

"Consumers have been looking for premium brands with a lower ABV to cater for different occasions," says Stuart MacFarlane, president of AB-Inbev UK.

"We have created a very distinct personality for Beck's Blue, which engages consumers, encouraging them to feel confident about ordering a no-alcohol option."

Beck's Blue scored highly on acceptability of flavour in a straw poll of leading beer bloggers contacted for this article — the Czech brand Bernard LA was another favourite — and MacFarlane says that the brand's "precision" brewing in line with the German beer purity laws is a plus for the brand.

It's also one of the few with top-line dedicated support in the form of last year's No Alcohol, No Apologies press campaign.

Carlsberg UK claims to have the fastest rate-of-sale of the leading brands with its Holsten Alcohol-Free and a company spokesman says "where it is sold, it sells well".

The company's spokesman also said that there was evidence that the resurgence in fortunes of low-alcohol beer was being driven by the changing attitudes of licensees as well as consumers.

"They are recognising not only that there is a consumer desire for low-alcohol lager," he says, "but also that it is a category they should stock as a responsible retailer. They are increasingly keeping a reasonable amount of fridge space free for it."

He adds: "There is also no doubt that low-alcohol lager has become more acceptable to many beer drinkers in recent years because of better flavour profile."

No confusion​

While several full-strength beer brands have spawned relatively successful NABLAB offspring, others, notably Kaliber and Clausthaler, have survived as stand-alone brands.

Diageo argues that Kaliber's single brand status is a major plus, avoiding confusion for consumers faced with a choice between similarly-branded full-strength and low-alcohol products.

The flip side of this is that offspring brands offer consumers some reassurance in a familiar name and expectation of flavour profile.

Karsten at Clausthaler says improvements in flavour delivery have been key to the revived fortunes of the category.

"Increasingly, consumers are dictating standards by demanding better products and more choice," he says. "Mediocrity is no longer an acceptable middle ground. Consumer expectations and palates are sophisticated and, as such, brands have to satisfy that demand."

The revival in low-alcohol beer is still in its infancy and whether more brewers are willing to step up to that challenge could dictate whether it can kick on from here.

Fair to middling​

Increasing segmentation of the beer market mean that consumers and licensees no longer have just "proper" beer and the low-alcohol stuff to choose from.

It's four years since the launch of Molson Coors' Carling C2 heralded the arrival of the mid-strength beer category in the UK.

The 2% ABV brand was influenced by a thriving market for 2% to 3% ABV beers in Australia and though its entry on the market was met with a lot of interest, the majority of follow-up activity by rival brewers has amounted to not much more than dabbling.

Carlsberg Mid-Strength was tested in Tesco stores, but not much has come of it just yet.

In cider, Magners got the Mid-Strength bug, but it was withdrawn in 2009.

Even Guinness got in on the act, but Guinness Mid-Strength trials have ended in the UK after its appearance in a small number of Scottish pubs.

Brand owner Diageo says the test "provided valuable customer and consumer insight", but "we feel the mid-strength market is in its early stages of development and that the product is not commercially viable at scale for the on-trade as yet".

The future for such products may yet lie in the political arena rather than the brewery boardroom, with the Campaign for Real Ale leading calls for lower beer duty on reduced-strength beers, a move which won strong support from back-benchers in the last Parliament.

If the issue can be forced back on to the post-election agenda it could give mid-strength beer a big leg-up.