Asia: More drinkers in Southeast Asia turning to less-potent beverages and even alcohol-free drinks
From Thailand to the Philippines, more drinkers across Southeast Asia are turning to less-potent beverages and even alcohol-free versions of their favorite drinks so that they can avoid the throbbing headaches and other unpleasantness that follows an evening of overindulgence, the Nikkei Asia reported on June 28.
Suntory Holdings began producing its Horoyoi canned cocktail in Thailand on June 28 through local unit Thai Spirit Industry. The drink, which is also popular in Japan, contains 3% alcohol.
Suntory previously imported the beverage from Japan. It plans initially to produce 10,000 cases in Thailand, in grape and peach flavors.
"People have different tastes depending on the local climate and food, so thorough localization is key," said Makoto Kitaura, a marketing manager at Suntory Spirits.
Suntory also produces canned cocktails in Australia. The Japanese company hopes to speed development of new beverages and flavors by producing them where they are sold, so it can better navigate the ready-to-drink industry's notoriously short product cycles.
Thailand's ready-to-drink alcohol market, now dominated by wine coolers, will grow more than 20% between 2021 and 2026 to 8.53 million cases, the U.K.-based IWSR predicts.
In Vietnam, Sapporo Breweries began selling a lower-alcohol version of its Premium Beer last month. Sapporo Premium Beer 100 contains 3.5% alcohol, 1.5 points less than the original. It is made from 100% malt and priced nearly 20% higher, at 19,900 dong (86 cents) per 330-milliliter can.
Low-alcohol beverages are capturing more interest in Vietnam, the region's largest consumer of beer.
"I try to drink beer with a lower alcohol content when I have important work commitments the next day," said Nguyen Manh Hoang in Hanoi. The 35-year-old said he also was paying more attention to his health.
The alcohol-free Heineken 0.0 reached Vietnamese store shelves in 2020. Local players like Saigon Beer Alcohol Beverage, or Sabeco, also are making inroads into the field.
"Nonalcoholic beer is very popular, and we're currently sold out of Heineken," said a representative at a major supermarket in Hanoi.
Low-alcohol beverages are gaining ground in the Philippines as well, despite liquor being available for relatively cheap. San Miguel Brewery, the country's largest producer of beer, now sells fruit-flavored beers and sugar-free hard seltzer ranging from 3% to 5% alcohol, as well as the nonalcoholic San Miguel 0.0 lager.
The growing demand for such beverages stems from diversifying tastes in Southeast Asia, as economic growth and rising incomes push consumers to branch out beyond beer to wine, cocktails and other beverages.
The coronavirus pandemic also made consumers more health-conscious. A 2022 survey by Euromonitor International found that 12.2% of baby boomers in the Asia-Pacific drink almost daily, while only 6.3% of millennials said the same. When asked why they were cutting back, 51.4% of respondents said it was for their health.
Despite its bright outlook, Southeast Asia's no- and low-alcohol market was hit hard by the coronavirus restrictions. Sales in the region's eight main countries totaled 24,800 kiloliters in 2021, shrinking 11% from 2019, according to Euromonitor.
"People dine out often in Southeast Asia, so demand for drinking at home is not as strong as in Japan," said an official at a Japanese company. "With people eating out less frequently amid the pandemic, opportunities to buy no- or low-alcohol beverages decreased."
Stronger regulations add to the uncertainty about a full recovery in earnings at liquor companies. Vietnam, for example, introduced tougher penalties for drunken driving in January 2020.
The alcohol industry also faces investors focused more on environmental, social and corporate governance factors. Those in Asia, many of whom are younger, pay particularly close attention to ESG. A poll by The Economist shows that about 70% of young investors in Singapore and China emphasize ESG, far above the roughly 40% for their counterparts in the U.S., Canada and the U.K.
With promoting good health and well-being listed as one of the United Nations' 17 Sustainable Development Goals, beer and liquor producers feel pressured to demonstrate that their operations are ethical, including through expanding no- and low-alcohol offerings.
Alcohol-free options are also key for beverage companies to expand their footprint, especially with Muslim-majority countries accounting for about half of Southeast Asia's population of over 600 million. Alcohol consumption is prohibited under Islam.
Low-alcohol products are not the silver bullet, however. They still carry the risk of being blamed for lowering the barrier for alcohol consumption.
29 June, 2022
