When we think of recent trends in the wine industry, natural wines and orange wines come to mind. However, in reality, non-alcoholic wines are receiving even more intense attention than these wine categories.
Non-alcoholic beverages without alcohol are expanding their market presence across beer, sake, cocktails, and other categories. "Alcohol-free" has now become a trending keyword common to the entire alcoholic beverage industry.
This trend is not limited to Japan. Take Germany, for example. Despite its strong reputation as a beer country, the development and sales of non-alcoholic beer are actively pursued there, with multiple varieties easily available at any supermarket.
What is distinctive about Germany is that rather than creating independent non-alcoholic beer products, breweries are releasing alcohol-free versions of their existing products. Recently, the selection of non-alcoholic wines has also been increasing.
When people think of alcohol-free beverages, they might imagine mass production by major manufacturers. Indeed, producing alcohol-free beverages requires almost dedicated equipment, making it difficult for small-scale manufacturers to produce them casually.
However, recently there has been an increase in cases where individual wineries are adding non-alcoholic wines to their wine lists while utilizing outsourcing and other methods.
In response to market expansion, various studies and verifications regarding non-alcoholic wine have begun to be conducted actively. Today, we will examine the non-alcoholic wine market based on interim reports from Germany's Weinnova project, which received over 700,000 euros in funding from the EU and conducted research over three years from 2019 to the end of 2022.
Current State of Wine Consumption
When discussing alcohol-free beverages, including non-alcoholic wine, the decline in alcohol consumption in recent years is invariably pointed out. Many experts analyze this phenomenon as follows: as the population that does not consume alcohol daily has increased, demand for alcohol-free products that this demographic can also consume has expanded.
According to statistics published by the OIV (The International Organisation of Vine and Wine), worldwide wine consumption has shown a flat to declining trend since peaking in 2007. Particularly in 2020, when Covid-19 caused global chaos, consumption decreased by 3% from the previous year (234 mhl), marking the lowest consumption level since 2002.
On the other hand, in countries with high wine consumption such as the United States, Italy, Germany, and the United Kingdom, wine consumption has not declined over the past several years and has remained relatively flat.
Interestingly, demand for non-alcoholic wine is growing in these very countries where wine consumption has not decreased. Simply put, it would seem that non-alcoholic wine has successfully adapted to consumers who previously did not drink regular wine, thereby expanding the market. But is this perception actually correct?
Who is Drinking Non-Alcoholic Wine?
In conducting consumer research on non-alcoholic wine, the Weinnova project prepared multiple personas with very detailed settings. Each consumer surveyed was matched to these personas, and consumption behaviors were analyzed through these persona profiles. Among these personas, profiles that consume no alcohol whatsoever were also included.
If non-alcoholic wine were being well-received by demographics that do not drink conventional wine, then personas who do not consume alcoholic beverages should be at the center of non-alcoholic wine consumption.
Indeed, these personas also showed a positive attitude toward consuming non-alcoholic wine. However, the personas who showed more active desire to consume non-alcoholic wine were those with profiles classified as wine enthusiasts—typically highly educated individuals with social status.
Additionally, personas given profiles of being young, not particularly interested in wine, but fond of new things also showed high desire to consume non-alcoholic wine.
Conversely, personas who drink wine regularly but do not have particular preferences showed no rejection of wine becoming alcohol-free, but also demonstrated no inclination to actively choose such products.
Reasons for Choosing and Not Choosing
There are broadly two types of motivations for drinking alcohol-free beverages. One is external factors, such as needing to drive afterward and therefore being unable to drink alcohol. The other is internal factors such as health considerations or taste preferences. In situations where people more actively choose alcohol-free beer or wine, external factors are often the primary drivers.
This research clearly demonstrated this tendency.
The primary reason for drinking non-alcoholic wine was driving considerations (80%), followed by avoiding intoxication (71%), health considerations (67%), and interest in new beverages (67%). Meanwhile, 44% cited taste as a reason, and 34% cited religious reasons or aversion to alcohol (the survey allowed multiple responses).
The reasons why personas with wine enthusiast profiles and social status consume non-alcoholic wine follow exactly this order. While they view the status and pleasure that wine brings favorably, they dislike having their work performance decline due to alcohol consumption or having their social status damaged by intoxication or drunk driving.
Therefore, if they find products with taste they can accept, they not only show no resistance to choosing non-alcoholic wine but actively select it.
On the other hand, the primary reason revealed by the survey for not drinking non-alcoholic wine was the sense of incongruity of wine not containing alcohol, at 62%. This was followed by taste not matching regular wine (44%), the effort required to find delicious non-alcoholic wine (40%), and the non-existence of alcohol-free versions of preferred wines (35%).
While a high percentage of reasons for not choosing non-alcoholic wine relate to taste, it is interesting that taste evaluations by survey subjects who actually purchased and drank non-alcoholic wine recently were relatively positive. This suggests the possibility that people are becoming negative about taste due to certain preconceptions, like avoiding something without trying it.
Alcohol-Free Wine as a New Business Opportunity
The sense of incongruity of wine not containing alcohol, which was also cited as the primary reason for not choosing non-alcoholic wine—this feeling of strangeness may become greater the more attached one is to wine as a beverage.
However, at wineries, which are more familiar with wine as an alcoholic beverage than anyone else, non-alcoholic wine has recently begun to be clearly positioned as a new business opportunity.
The primary reason is the ability to raise sales prices while gaining consumer understanding.
The upper limit of purchase prices considered by consumers surveyed in the Weinnova project was 6 euros per bottle for conventional wine, compared to 7 euros per bottle for non-alcoholic wine. Consumers see 1 euro worth of additional value in wine being alcohol-free.
The manufacturing cost of non-alcoholic wine is the cost of producing conventional wine plus the cost of the alcohol removal process. However, since most costs related to alcohol removal depend on equipment, the per-unit cost decreases as processing volume increases. Small-scale operations can also outsource to external providers.
While alcohol removal does indeed affect taste and aroma, various approaches have already been undertaken and the technology has become established. Though effects cannot be completely eliminated, keeping changes within acceptable limits has become increasingly achievable.
For wineries, creating alcohol-free versions of wines on their existing lists is beginning to be recognized as a means to reliably increase sales prices without bearing the risk of quality degradation.
