E-Malt.com News article: Australia: Growth in zero-alcohol beer sales begins to slow down, study shows

Zero-alcohol alternatives have seen significant growth in Australia over the past five years, with beer remaining the most widely purchased category. However, recent data from Circana reveals that growth in zero-alcohol beer sales has begun to slow, Beer & Brewer reported on March 26.

Innovation has decreased recently, contributing to this slowdown. Innovation accounted for $1.8m in sales in the past 12 months, compared to an average of $5m annually in the previous three years. As 24 per cent of shoppers actively seek new products, demand tends to stagnate without fresh offerings.

“Over the past five years, the data shows a clear increase in zero-alcohol purchases,” said Andrew Gerrard, Senior Consultant at Circana. “However, we are starting to see the growth slowing. Being ‘curious to give it a try’ was the second top motivator for purchasing a zero-alcohol alternative in 2022; this has slipped to number four in 2025.”

While beer remains the dominant category in the zero-alcohol market, other beverages like wine, spirits, and cider are seeing increased interest. Wine has strong potential for growth, though it still faces challenges in meeting consumer flavour expectations. Spirits, meanwhile, are hindered by higher per-unit costs, which make them less competitive compared to full-strength options. Ready-to-drink (RTD) products also face competition, limiting their growth.

“Wine presents the next largest opportunity in terms of size, but there’s still work to do in refining flavour profiles to meet consumer expectations. Spirits face challenges with high per-unit costs, particularly when compared to full-strength alternatives,” says Gerrard.

Moderation remains a key motivator for Australians opting for zero-alcohol beverages. Nearly one-third of zero-alcohol buyers aim to reduce their overall alcohol consumption. In fact, 29 per cent of shoppers reported buying fewer alcoholic beverages or stopping altogether in the six months leading up to January 2025.

“The messaging around the dangers of drink driving is cutting through,” said Gerrard. “Consumers are much more conscious about making safe driving choices, and being able to drive after consumption remains the top influence for Aussies choosing zero-alcohol beverages.”

As the zero-alcohol market matures, innovation will continue to drive growth. Local craft beer brands are capitalising on emerging trends, including low-carb options and refreshing flavours like the Mexican-style lager ‘Cerveza’.

“We also expect innovations in spirits with a significant emphasis on Agave, reflecting the growth of Tequila in both developed and developing markets,” said Gerrard. “The consumer base is becoming more health-conscious, so there’s still strong potential in the low- or zero-alcohol alternatives across wine, spirits, and beer.”

The future of zero-alcohol beverages in Australia looks promising, with brands investing heavily to meet the demand for drinks that replicate the look and taste of their alcoholic counterparts.

Fast Facts:

Zero-alcohol beer remains the dominant category in the zero-alcohol market, though growth is slowing.

Innovation in zero-alcohol beer sales dropped significantly, contributing to slower growth. Sales from innovation fell from $5m annually (2019-2022) to $1.8m in the past 12 months.

24 per cent of shoppers actively seek new products, highlighting the importance of innovation to sustain consumer interest.

Moderation is a key motivator, with nearly one-in-three zero-alcohol buyers aiming to reduce their overall alcohol consumption.


28 March, 2025