The tide of new non-alcoholic drinks served across pubs and supermarket shelves has become a key ingredient of revenue growth for independent ANZ brewers, according to new research from inventory management software company, Unleashed.
Unleashed examined revenue figures for 39 independent ANZ breweries, including eight with no- or low-alcohol offerings, for the past four financial years.
“We’ve been hearing plenty about how NoLo is this prime opportunity for independent brewers, but we realised independent brewers didn’t have hard proof that this was the case,” says Gareth Berry, CEO of Unleashed Software.
“[Our] research shows, pretty unequivocally, that no- or low-alcohol offerings are a very good thing to have on the books.”
Among the findings of the new study: producers who have added NoLo products saw an average 41.1% growth in revenue in the year after the NoLo products were released.
Key findings:
- Indie NoLo producers are seeing more than three times the revenue growth of non-NoLo brewers: Producers with NoLo offerings saw nearly 20% higher growth in YoY sales revenue than those that didn’t, with 28.6% year on year growth for NoLo offerers, compared to 9.2% for producers without (calculated for financial years from 2018-2022)
- NoLo has been a sober driver of brewery revenue growth: Producers who have added NoLo products saw an average 41.1% growth in revenue in the year after the NoLo products were released.
- Revenue growth has more than doubled for some NoLo customers in the last two years: Some NoLo customers have seen revenue growth north of 100%, underlining the explosion in demand for NoLo products
- In lockdown environments, NoLo is an elixir for revenue life: In 2020 when non-NoLo brewers saw -0.1% revenue decline, those with a NoLo offering saw revenue jump by more than a quarter (25.3%).
“On the face of it, the costs involved with producing a keg of NoLo and a keg of regular APA would look very similar,” says Berry.
“[But] it takes more time and money to get a NoLo recipe consumers actually want, and the brewing and labour costs are often higher too.
“However, once that’s done you’ve got that ongoing advantage of not paying excise – which is only going up. If brewers can get it right, NoLo represents an exciting opportunity for our entire industry.”
The success of NoLo falls against a backdrop of increasingly expensive pints, due in part to the rising inflation levels, as well as excise taxes.
The bubbling costs number among the many reasons why manufacturers will be considering adding a no alcohol option to their brewing arsenal.
As more competition stirs, the quality of NoLo selection is improving, with all signs suggesting consumers are here to stay.
Despite being a relatively boutique product – commanding 3.5% volume share of the industry – the global NoLo market has soared to an estimated US $10bn.
“Independent brewers are seeing promising growth as is, but NoLo offerings have separated themselves as the clearest growth area in the frothy market.
“For our indie brewers that have done it tough these last couple of years, it’s opening up revenue streams and changing consumer behaviour,” says Berry.
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