Non-alcoholic bars and Dry January have taken off in recent years. Demand for the drinks was 56% higher in January 2023 as compared to January 2022 and 124% higher than 2021, per data from Drizly. The sober curious movement is leading to a new opportunity for alcohol brands to offer non-alcoholic drinks to consumers looking for healthier options to imbibe.
Diageo’s vice president of innovation Lisa Kliegerman says that mindfulness among consumers in the post- pandemic era is driving this opportunity. “We’ve all come through a major global pandemic, and throughout that process, our relationship with food and drink has shifted,” says Kliegerman. “We see people opting to drink better, not more on many occasions.”
“At the same time, we continue to see the desire for socialization, especially post-pandemic, which has created space for consumers to be more open about variety, and the inclusion of non-alcoholic choices during these socializing moments,” she continues. “An increase in innovation has also brought vibrancy to the category. We’re seeing more offerings, a huge jump in quality, proxies for beer, wine, and spirits as well as an increased prominence of offerings with celebrity endorsements, such as Seedlip.”
Kliegerman has spearheaded the growth of Diageo’s non-alcohol category with leading brands including non-alcoholic spirit Seedlip and non-alcoholic beer Guinness 0 and continues to experiment with new products.
“At this stage of category evolution, we also must continue to experiment and learn what works best to bring consumers into the category,” she says. “We’re exploring ideas that are entirely new and have never been done before, as well as ideas that provide consumers with a closer-to-home on-ramp into the category, like the recent launch by our colleagues in Europe of Tanqueray 0.0% Flor De Sevilla Orange. Keeping this wide spectrum at the top of the ideation funnel allows us to learn as much as possible as we proceed through the product creation journey and, ideally, helps us increase consumer penetration as quickly as possible.”
Brand Innovators caught up with Kliegerman to talk about the non-alcohol category, mindfulness and circular economy. This interview has been edited for clarity and length.
Who is driving this shift to non-alcoholic beverages?
Non- and lower-alcoholic experimentation is happening across a very wide range of consumer groups. Yet, in general, we see most category adoption coming from alcohol drinkers who occasionally seek a non-alcoholic option for the moments in which alcohol has traditionally been the default. Specifically, the most engaged audience is millennials who are leading the charge in opting to elevate their beverage choices, whether they are choosing to drink alcohol during that occasion, or not.
How are you marketing to this demographic and to others who might be curious about these products?
Distribution is the most important lever in marketing non-alcoholic products today – literally just gaining physical availability where consumers shop is the first step. Additionally, our Diageo North America Innovation team works closely with the brand marketing teams who are experts in creating authentic connections with consumers. With Diageo North America Innovation exploring and evaluating this consumer opportunity space, we look at consumer trends from alcohol and other beverage categories to help influence our product ideas and broaden our understanding of how these products can fit into consumers’ lives. Our disruptive technologies and world class innovation labs allow us to rapidly translate these idea nuggets into product prototypes. In terms of messaging, marketing and product communications must provide clear product information and education on how to serve and consume the product, as the category is still new to the majority of potential buyers.
How are you tapping into wellness trends like the Dry January and being sober-curious?
Moments like the new year, summertime, and the holiday season are key opportunities for us to reach a broader set of individuals who, for a discrete time window, may be more open to learning about, and trying, non-alcoholic options. And while we certainly plus up our marketing in key cultural moments that impact the category, we continue to seek out an always-on, consistent place in consumers’ minds while the category finds its footing. There is so much upside in terms of consumers simply learning there are delicious, non-alcoholic options out there. While certain cultural tentpole moments increase interest, consumers seek elevated cocktail options for every seat at the table throughout the year. Worth noting, it’s very important to us to promote moderation and responsible consumption throughout the entire year.
How are you helping grow brands like Seedlip and Guinness 0?
For us, it’s about first establishing these brands as household names. With so much category evolution, we want to create intuitive options that don’t require unnecessary effort or time to understand. Additionally, everything we develop must taste incredible. It is an obvious statement, but you get one chance to influence consumers with a new innovation and, if it doesn’t taste good, it is so much harder to win them back a second time.
What trends do you expect to see in the alcohol/non-alcohol space in the coming year?
The future continues to hold a lot of new product innovation and experimentation for the non-alcoholic space. There is no end to the new ingredients and formats. We see so much experimentation today, but the brands that maintain consistency and provide meaningful value to consumers will define the category’s future. We anticipate continuing to see a rise in offerings that provide consumers with ease and convenience. We also see consumers’ perceptions of mindfulness and sustainability moving closer together and, at times, being one and the same. We anticipate that in the future there will be a consumer expectation for products in the mindfulness space to have more sustainability reasons to believe – like recyclable or circular packaging, regenerative agriculture practices, or community give back.
