Predictions 2022: Time for rapid growth of low alcohol, no alcohol drinks

Over the past few years the Indian consumers’ preferences and lifestyle choices have evolved, owing to their exposure and digitisation. Urbanisation and change in societal perspectives, along with technological advancements, have made alcohol a part of social interactions. The beer industry has gained prominence and social acceptance in recent years, owing to an increase in disposable income, with preference for low-alcohol beverages. Introduction of low and no-alcohol variant beer, online availability and ease of doorstep delivery in certain states are further driving the market. These factors have significantly contributed to product diversification, thereby, paving the way for the emergence of craft beer.

Though at a nascent stage, India’s craft beer industry is one of the fastest-growing industries. It has acquired close to 2-3% of the country’s beer market share. Witnessing the growth in demand for this segment, multiple players are betting big on this category. This offers a huge opportunity for growth and innovation, especially for the homegrown brands, looking to cater to diverse taste palates.

The rising brewpub culture in cities like metros and select tier towns has also made the consumer more experimental. However, owing to the pandemic, the alcohol industry at large has been one of the worst hit and has bore the brunt of Covid-19, as the second wave further dampened consumer’s spirits. In the past two years, prolonged periods of staying indoors, virtual interactions and celebrating small occasions with loved ones led to at-home consumption. Consumers discovered that drinking at home was safer and lighter on the wallet, leaving them with more to spend on quality. This has provided the craft beer segment with a huge opportunity to target and familiarise newer audiences and expand the craft beer drinking community, as people look for premium food and drink experiences.

As people took to recreating leisure moments at home by celebrating smaller occasions with family and friends, even if it was virtually, it gave homegrown craft beer brands a chance to be a part of these occasions, offering an opportunity to expand and engage.

The year 2022 will be a year of innovation and experimentation. Craft beer brands will aggressively focus on digital engagement as it allows them to reach a much wider audience and, as a result, drive better engagement and visibility for the segment, complimented by real-time communication, feedback, insights and experiences. Online delivery will continue to play a significant role as it has enabled the players to penetrate deeper into cities, providing consumers with an array of choice they could not access earlier.

We are optimistic that the government will support the initiative in more states this year. The pandemic has also ushered in the era of health consciousness. Now more than ever, people are paying attention to their health and this reflects in the rapid rise of the low alcohol and no alcohol drinks and mixers. This is a good sign for the craft beer industry, as craft beer has low alcohol percentage (4- 5%) variants and is lighter on the palate.

In addition to low alcohol drinks as key growth drivers, at-home consumption coupled with small monitored on-premise and outdoor events will drive sales and accelerate recovery for the category, offering a huge potential for growth. Craft beer brands are also diversifying their offering, while keeping the core product intact. Branded merchandise and f&b products is another segment brands are investing in to sustain brand recall and offer something new to the consumers. The craft beer industry has a huge potential for growth and this year most brands will capitalise on emerging consumption trends to keep their businesses afloat and grow at a steady pace.