Lower-alcohol wines are fighting tough competition from non-alcoholic drinks and low-alcohol beer
Lower-alcohol beverages are becoming more high profile in retail and in on-premise in a number of countries. So far most of the attention seems to have been paid to low or no alcohol beers, ‘spirits’ that are in fact alcohol-free, and seemingly an endless pipeline of innovative and on-trend non-alcoholic beverages. This latter category, hitherto known as soft drinks, has seen a host of new launches in the past few years, with a number of common threads: much lower sugar levels; blended bitter, sour, and aromatic flavours such as ginger, rhubarb, elderflower, tea, coffee, pepper, and herbs; and a strong commitment to high impact, elegant design. One of the unexpected consequences of the renaissance in the gin category is the growing number of G&T drinkers who are now opting to drop the gin element for certain occasions and enjoy simply a tonic water (a category now itself exploding with options) with ice and lemon. As one of our respondents for our upcoming UK Portraits report put it, “I can’t really tell much difference in taste, and it means I can keep to my health regime [of no alcohol on weekdays].”
Amid this flurry of development, the lower / no alcohol wine category has been struggling for consumer attention. In the recent Wine Intelligence Global SOLA Wine Report: Sustainable, Organic and Lower-alcohol Wine Opportunities Index, lower-alcohol wines were ranked 8th out of the 12 alternative wine categories examined, ahead of niche offerings such as Orange or Vegan wine, but some way behind Organic and Fairtrade wines. The index, compiled from consumer and market data across 11 major consumption markets, showed that lower alcohol wine is struggling in two key areas.
The first and most convoluted issue facing the lower alcohol wine category is that consumers report consistent levels of dissatisfaction with the product’s taste and quality. While some low and no-alcohol beers have managed to retain almost all of the characteristics of traditional 4-5% beers – to the point where consumers are genuinely struggling to tell the difference – the same has not been true in the wine category. As one New Zealand wine journalist puts it: “traditionally, there has been a big difference in the quality of lower-alcohol wines, with lower-alcohol wines being very green, harder and more acidic with more sugar to hide these traits”.
Delving deeper into the product quality issue exposes a number of other consumer problems. For instance, how is “lower” alcohol wine actually defined? A surprising number of consumers do not actually recall what constitutes standard alcohol levels in wine. Who could blame them? Arguably there isn’t such a fixed notion of standardisation in wine anyway: products can range naturally from 8% (some Rieslings and Moscatos) to 15%+ (a big Californian Zinfandel or Australian Shiraz). Should a 10.5% Prosecco be classified as ‘lower’ alcohol? When would we say something is actually ‘low’ alcohol – 5%? 3%?
There is also no one optimal method for reducing alcohol levels in wine. A number of methods exist to extract alcohol during the winemaking process, though the results can often be a product that tastes very different to the full-alcohol wine that most consumers would be benchmarking against. However innovation in this area is proceeding at a fast pace, with the intention of making a more wine-like product. Other innovators are focusing on how the grapes are grown, and when they are harvested. One of the more high profile brands in this area, The Doctors’ Sauvignon Blanc 9.5% ABV from New Zealand, has garnered wide praise for producing something which is almost identical to its full-alcohol equivalent but with 40% less alcohol. A number of German producers have also succeeded in making wines using standard processes that come in at 8% ABV or under.
The second main issue is one of availability, though this may be changing. In monopoly retail markets such as Sweden, the promotion of lower and no-alcohol wines has become a matter of public policy; in countries such as Germany and New Zealand, a strong effort by the industry to focus on this area as one of its points of difference has been reflected in retailer stocking policies.
The SOLA Opportunity Index suggests that the strongest opportunity for lower-alcohol wine is in New Zealand (43.2) and Australia (37.6) ranked first and second respectively. Low opportunity markets, surprisingly, include Germany (25.9), and Sweden (25.7), though Sweden scores relatively highly for opportunities in non-alcoholic wines.
In the longer term, there seems to be grounds for optimism for the lower alcohol sector within wine. The consumer shift towards a healthier and lower-alcohol lifestyle shows no sign of reversing, so demand seems likely to rise rather than fall. If viticultural and winemaking innovation work continue to yield benefits in terms of product quality and alignment with taste expectations, the sector will be able to compete on a level playing field with beer and soft drinks, though even then it will take a lot of effort to persuade sceptical consumers.
Author: Richard Halstead