Should you be adding a non-alcoholic line of beverages to your portfolio? The latest trend in the adult beverage world is non-alcoholic substitutes for our favorite adult beverages. This is an emerging industry trend, and it offers greater profit margins since excise taxes don’t apply. In Europe, the market for non-alcoholic beer grew 5 percent from 2010 to 2015 while the beer market in general shrank.
Seedlip is at the forefront of this industry trend, producing a non-alcoholic distilled spirit. Distill Ventures is a venture capitalist (backed by Diageo) backing Seedlip. Did you get that? The alcohol industry giant Diageo is backing this non-alcoholic distilled product. If the brand is successful, Diageo will reportedly buy it in 5-6 years.
In its white paper, Seedlip gives 4 reasons for investing in the non-alcoholic drinks space: well-being, experience, and curiosity and choice. Nick Hines’ article THE WORLD’S BIGGEST BOOZE COMPANIES ARE PLACING THEIR BETS ON A SOBER FUTURE commented that these products “will catch the eye of people who don’t drink or aren’t drinking at the time, whether they are designated drivers, pregnant women, people who don’t drink for religious reasons, or people who want the taste of a well-made beer without the intoxicating effects of a well-made beer.”
This is something to give some serious thought to in terms of diversification and being an early adopter of new products and technologies. Those of us here in Rochester will forever talk about Kodak’s downfall because of its failure to be an early adopter of digital photography.
Even the big boys are getting in on the action. Heineken and Budweiser have introduced a 0% ABV “beer” and AB InBev is increasing the no and low alcohol beer products in its portfolio to 20% over the next few years.