- Title: 'Tastes exactly like beer' - Heineken and Budweiser push non-alcoholic beers
- Date: 20th July 2021
- Summary: NEW YORK, NEW YORK, UNITED STATES (RECENT - JULY 8, 2021) (REUTERS) (AUDIO AS INCOMING) (SOUNDBITE) (English) VICE PRESIDENT OF GLOBAL MARKETING, BUDWEISER AT ANHEUSER-BUSCH INBEV, TODD ALLEN, SAYING: "Trial is very important for the success of the brand because taste, historically, has been a barrier to the category, so it's really important for people to try the product and understand that it tastes great."
- Embargoed: 3rd August 2021 11:57
- Keywords: Budweiser Heineken non-alcoholic beer zero alcohol beer
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- Country: USA
- Topics: Company News Markets,Economic Events,United States
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- Story Text:EDITORS PLEASE NOTE: AUDIO IN SHOT 31 AS INCOMING
At a free sampling event at Pier 17 in lower Manhattan on a warm July night, passersby chugged cans of Heineken 0.0, a non-alcoholic beer.
They were unanimously surprised by the taste.
"It tastes like beer," said Nelson Davila said.
"I like beer and I can't tell the difference," said Cary Heinz. Heinz brought over a regular Heineken from a nearby stand to compare.
"And I'm a real drinker," he added, with a can in each hand.
"Oh! Tastes exactly like Heineken. Wow. That's refreshing," said one man.
"That's actually really good. Tastes just like Heineken," said a woman.
While many drinkers may celebrate the easing of pandemic restrictions with a beer or glass of wine, the world's biggest brewers will be urging them to try new zero alcohol lagers.
Having lost market share to craft beers and hard seltzers - or alcoholic fizzy water - top brewers like AB InBev and Heineken are betting on a new generation of non-alcoholic beers to help regain ground by tapping into healthy-living trends.
But the pandemic cancelled business lunches, emptied sports facilities and left no one driving back from parties or bars - all prime territories for sales of zero alcohol drinks.
Global non-alcohol beer sales fell 4.6% in 2020 in value terms to $11.6 billion after 9% average annual growth in the previous four years, according to market research provider Euromonitor International.
The ending of restrictions in the United States and Europe is now making it easier for brewers to get drinkers to try out new zero alcohol versions of their top-selling brands - something they believe will be crucial to ramping up sales.
Borja Manso-Salinas, marketing VP of the Heineken brand in the United States, said one of the barriers of trying a non-alcohol beer is the taste. People expect the beer to taste bad because it doesn't contain alcohol, but actually, "it tastes great."
Manso-Salinas said sampling was important "in markets where nonalcoholic beer is not very developed because people don't really know when or on what occasion they are supposed to drink nonalcoholic beer. So actually, sampling in those locations helps overcome that barrier."
Previously, many zero beers were effectively cooked to evaporate alcohol, spoiling the taste. Brewers often now use a vacuum chamber so alcohol comes off at a lower temperature and sometimes seek to blend back escaped esters that are central to the flavour.
The world's second largest brewer launched Heineken 0.0 in the United States in 2019 and planned to distribute 10 million free cans last year, but managed less than half that because of the pandemic.
The Dutch brewer believes it is back on track in 2021, with around four million free samples going to offices alone. Other samples are bound for music festivals, apartment buildings and shopping malls.
Trevor Stirling, beverage analyst at Bernstein Securities, said brewers needed to make non-alcoholic beer an active choice, rather than just a beer substitute, such as for drivers.
"If you can reframe nonalcoholic drinks, if you can persuade people this is a nonalcoholic drink that tastes of beer rather than a distressed purchase of a beer with no alcohol," he said. "For example, if I were in my office at 11 o'clock in the morning, instead of grabbing a Diet Coke from the fridge, why couldn't I grab a Heineken 0.0?"
Brewers see non-alcoholic beer as something consumers could drink at work and see big potential at U.S. sports events, many of which ban alcohol sales towards the end of a game.
Anheuser-Busch InBev (AB InBev), the world's and the United States' largest brewer, also launched a zero version of its flagship Budweiser lager in the United States a year ago.
Todd Allen, global vice-president of the Budweiser brand, said sampling too was key.
"Taste, historically, has been a barrier to the category, so it's really important for people to try the product and understand that it tastes great," he said.
Europe represents almost three-quarters of non-alcoholic beer drunk, market research company insightSLICE says. In Spain, zero alcohol beers make up 13% of all beer sales.
In Japan, where nearly 5% of beer sales contain no alcohol, brewers are launching new brands and forecasting steep growth.
However, the United States is almost virgin territory, with zero alcohol's market share just 0.5%, according to Euromonitor.
IWSR Drinks Market Analysis says 2019 marked a turning point, with growth after three years of decline.
For the five years to 2025 it sees a near tripling of U.S. non-alcohol beer volumes, far outpacing global expansion of around 60%, helped by new launches and health trends. U.S. beer sales as a whole are seen down 18% over the same period.
Such growth could be vital to the big brewers which have faced battles on two fronts in recent years - from craft brews, now some 12% of U.S. beer, and from hard seltzers, which have doubled sales each year since the market took off in 2016.
Zero alcohol is different. The major brewers are front-runners rather than late arrivals and their new products may take share from soft drinks rather than the core beer market.
Non-alcoholic drinks also typically offer higher margins, with a higher cost of production offset by lower excise tax.
Allen said the category performed proportionately better among the new generation of drinkers, a clear positive.
Brewers highlight beer has "natural" ingredients, unlike many soft drinks. Budweiser Zero campaigns also stress it has no sugar and its calorie count is a third that of regular Bud.
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