India: Young Indians now more willing to try low or no alcohol beer, research says

Young Indians are willing to try low or no alcohol beer as concerns around health sway their decision to pick alternatives to strong beer that still continues to dominate sale of the alcohol beverage category in India, Livemint reported on September 24.

To be sure, the market for such beers, that is, low or non-alcoholic beers, in India is still minuscule as over 85% of beer sold in India is strong—with an alcohol content of 6% to 8%. While several large beer companies, including United Breweries Ltd and Anheuser-Busch InBev, have introduced non-alcoholic variants to promote moderation in alcohol consumption, bring more younger drinkers into the fold and appeal to those watching their weight, the market is still in a nascent stage.

Mintel surveyed 1,655 Indian internet users aged over 25 years who have consumed beer in the past six months. In its report, over 40% of the respondents within the age group of 25-34 said they are interested in switching from standard-strength beer to low or no alcohol variants of the drink.

Health is a top barrier for beer consumption, with nearly 50% of those surveyed citing this as a key reason they avoid the drink. Others also said they refrain from drinking beer to avoid hangovers and to overcome a general feeling of being drunk.

The preference for low-alcoholic content beers is more pronounced among younger beer drinkers with the elder cohort of consumers still preferring strong beer.

“While alcohol moderation is becoming more pronounced among Indians as a whole, with an average of 38% of Indian beer consumers interested in switching to low/no alcohol versions, the over 45s (32%) are less enthusiastic about making this switch," the research released on Thursday said.

India’s beer market is categorized as strong and mild beers. Strong beer with an alcohol content between 6% and 8% accounts for over 85% of the total beer consumed in India, according to information provided by United Breweries’ annual report for 2019-20.

In fact, even the share of beer in India’s alcohol market is still low, given consumer preference for whisky, rum and brandy. Per capita consumption for beer in India rests at 2 litres compared to the global average of 30 litres per annum.

“Responsible and healthy drinking has become the mantra amongst young Indians today. While this behaviour is seen across all age groups, with Indians showing interest in LNA (low or non-alcoholic) beer, it is more noticeable among young consumers aged 25-34 years," said Natasha Kumar, Mintel's food and drink analyst for India.

Kumar said the pandemic has further accelerated health concerns among users in general that could prompt companies to launch more low or non-alcoholic drinks.

“With the current pandemic causing consumers to be even more conscious about their health and diet, the low or non-alcoholic (LNA) category is expected to grow further post the lockdown. It also offers brands the opportunity to connect with health-conscious and responsible beer drinkers, which will prevent them from dropping out of the beer category entirely," said Kumar.

Last July, Anheuser-Busch InBev, the world’s largest brewer said it has entered the non-alcoholic beer market in India with the launch of an alcohol-free variant of its popular beer brand Budweiser with Budweiser 0.0.

In 2018, India’s largest brewer United Breweries that sells the widely sold Kingfisher beer launched Kingfisher Radler—its non-alcoholic malt drink.

Sales from these variants are still a small percentage of overall business. Statista pegs revenues in India’s beer market at $13.77 billion as of 2020.

“In sales terms it's still a small percentage of our very big beer sales. But it is growing well despite the overall beverage consumption being lower due to pandemic," Ramesh Viswanathan, chief new business officer, United Breweries Ltd. UBL’s portfolio of non-alcoholic beverages comprises of Kingfisher Radler, Heineken 0.0, Kingfisher Ultra Malt, and Amstel Malt.

Viswanathan said these beverages resonate well with adults of higher socio-economic class living in metro cities. “It's a different taste profile and has less sugar and calories and appeals to discerning consumer. The base of this consumer is fast growing," he said.

Mintel research said that many Indian consumers are also interested in trying low-calorie and gluten-free beer as they watch their weight.

In fact, over a third of consumers say low-calorie content is an important factor when purchasing beer. “As consumers claim that health is a key deterrent for regular beer consumption, the opportunity lies in expanding beer offerings with healthier profiles addressing concerns surrounding health. Low-calorie, low-carb and gluten-free beers can all appeal to this consumer need," said Kumar.

24 September, 2020