More and more UK consumers are reducing their alcohol consumption, according to new research by Lumina Intelligence. Findings from the Eating & Drinking Out Panel and Menu Tracker reveal that change is being driven not only by the desire to lead a healthier lifestyle, but also to cut back on spending to offset the soaring cost of living.
This trend provides a great opportunity for operators and brands currently in the Low 2 No space to take advantage of an underexploited, growing market.
Who are Low 2 No consumers?
They are typically younger than the total market average, with under 35s over indexing, meaning that the younger demographic is the key group to target with Low 2 No options.
Knowing this should inform operators when approaching their branding and marketing, helping in understanding what options to offer to align with this age group. Notably, 66% of under 35s are very brand led: +4ppt clear of the total market.
Fifty-five percent of Low 2 No consumers are women: this informs the type of drinks that will appeal to them when creating branding and marketing strategies. Female Low 2 No consumers are more likely to have
wine, spirits or cocktails, providing a real opportunity to target them with wider options for what they’re currently drinking.
The changing behaviour of consumers
Consumers are increasingly reducing their alcohol consumption in the UK, and this is being driven by the desire to lead healthier lifestyles, as well as attempts to cut back on discretionary spending during the increased cost of living
Year on year to June 2023, 61% of UK consumers said they only drink alcohol rarely or sometimes: it’s clear they are aiming to reduce their alcohol consumption to achieve a more balanced lifestyle.
Alongside this, the number of teetotal consumers increased year on year, with 15% now saying they never drink alcohol, up from 13% the year before. This means that more than three-quarters of UK adults are a great target for Low 2 No innovation.
Consumers are becoming more price conscious
Amid high inflation and the soaring cost of living there has been a +3ppt increase in the pub & bar consumer being very value-led, which means that almost three-quarters are aligning with value as a core driver. Therefore, operators need to emphasise their value-for-money credentials, such as promotions and loyalty schemes.
Furthermore, looking at the average price of alcoholic drinks compared to Low 2 No alternatives, the latter is cheaper than most alcoholic drinks across menus, with Low 2 No spirits having the highest price point.
Average price of alcohol and Low 2 No:
Channel share: Pubs can do more
Low 2 No consumers over-index in QSR, coffee & sandwich shops, but are under-trading and pubs & bars.
For example, in QSR, the Low 2 No consumer accounts for 29% of occasions (28% of the total market. Source, Lumina Intelligence Eating & Drinking Out 12WE 11/06/23), in contrast to 11% of occasions in pubs & bars (14% of the total market).
There is a clear opportunity here for pubs & bars to do more to target and realign with the younger demographic through branding.
Also, the average number of drinks on menus has declined, notably in pub & bar menus, leaving Low 2 No fighting for space – it accounted for just 1% of drink type share on menus in June 2023, showing plenty of scope to engage more consumers in the category.
Opportunities: Low 2 No Consumers are willing to spend more
Low 2 No consumers spend more on alcohol free wines, cocktails and beer. For example, there was an average spend of £8.04 on non-alcoholic wine compared to £7.28 in the total market in June 2023.
Increasing options on menus will therefore have a positive impact on consumer spending, driving sales for operators. Focusing on premiumisation of Low 2 No ranges is another opportunity to encourage these consumers to trade up and will also align well with the more brand-led, younger demographic.
Low 2 No prices are 4% more than soft drinks at total market level, and 1% more expensive in restaurants. Increasing ranges and offering premium options are ways to drive spend. Low 2 No is cheaper in pubs & bars, highlighting the opportunity to increase prices to target younger consumers looking for brands.
Average spend on total non-alcoholic drinks:
Current trends
Innovation is evolving in the space, with brands including Schweppes and Nirvana Brewery among the latest to launch Low 2 No ranges.
Younger consumers are more likely to be health conscious, so there is a great opportunity for brands and operators to emphasise the benefits of Low 2 No options by tapping into the wellness trend.
Consumers are increasingly turning to social media to discover trends and different operators. Having a strong social media presence and being aware and ahead of current trends among younger consumers can help operators ensure offerings align with current needs.