Heineken International, the Dutch brewing company, has introduced its zero alcohol product in a bid to make Americans love beer again. Heineken 0.0 was five years in the making, and the company hopes that it will win beer drinkers and non-drinkers over.
The move was made in response to the decreasing beer consumption in the United States. According to Mintel, a research firm, Americans consumed about 5% less beer over the past four years, and about 25% of American beer drinkers said that they drink less beer now than a year ago.
This finding has been confirmed by other media outfits. In an IWSR news report, the total alcohol volume consumed in the United States decreased by 0.8% in 2018 and it also declined by 0.7% in 2016. Both of these decreases were due to weakening beer sales, a sign of the loss of interest among Americans for big beer brands including Heineken and Budweiser.
Among the reasons cited for the decreasing interest in beer are the increased focus on health and wellness, as well as the demand for quality wines, liquor and beer with good flavors. Americans are also buying more expensive liquors and less beer and even those who are still drinking beer are choosing premium beers.
How does Heineken envision its zero alcohol product in the market? The brewing company thinks that Heineken 0.0 will appeal to people looking for flavor and health in their drinks and, thus, increase its beer sales. Even non-beer drinkers may be attracted to the product, perhaps even serve as an introduction to alcoholic beers.
According to Jonnie Cahill, Heineken USA’s chief marketing officer, “Making a brilliant non-alcoholic beer is really hard.” When alcohol is removed from beer, its aroma and flavor are removed, too. But Heineken “cracked the technology” with its Heineken 0.0 beer.
Heineken apparently has two goals for its new product. First, it wants people to stop ditching beer. Second, it wants consumers to make Heineken the consumers’ top choice when drinking beer.
Furthermore, Heineken 0.0 tastes like beer but doesn’t give the buzz that alcohol gives. This is designed to be a treat instead of an inferior alternative to alcoholic regular beer. Apparently, many people crave the taste of beer but don’t want its buzz.
Cahill has also said that non-alcoholic beer has been considered “a distress category” in that it isn’t what you can do but instead what you cannot do. A beer drinker, for example, may not drink regular beer because he will be driving, or he is on medication, or he has a big event to attend tomorrow. With Heineken 0.0, it’s now possible to drink beer without flunking sobriety tests.
But Heineken may have a challenge on their hands. Currently, the non-alcoholic beer sector is just a small sliver of the $112-billion beer market in the United States. But Heineken is betting that the sector will grow and it will be along for the ride with its 0.0 drink.
Heineken 0.0 isn’t actually a new product, at least not in Europe. In 2017, the brewing company first launched it in the Netherlands and Germany where it attracted positive attention from a “younger, more urban, and more premium demographic.”
Heineken also believes that the non-alcoholic product will give the company a competitive advantage. With the extremely crowded beer market, giving consumers a non-alcoholic option can boost Heineken’s edge against the likes of Budweiser.
The 155-year old Dutch brewing company has enjoyed success with Heineken 0.0 in Europe despite only being introduced two years ago. Plus, the brand has been given a boost and it’s a success that the company wants to replicate in the United States.
In the United Kingdom, for example, 0.0 makes up 5% of the company’s sales. In other countries, it’s even higher – 7% in Spain and 20% in Russia.
Heineken isn’t the only brewing company with non-alcoholic drinks in the market. Asahi, Guinness, and Anheuser-Busch also sell their own non-alcoholic beers internationally.
The Corona and Budweiser brands have non-alcoholic versions released in 2016, and Anheuser-Busch InBev predicts that low-alcohol and non-alcoholic beers will account for nearly a quarter of its production by 2025. Diageo, the owner of the Guinness brand, released its Open Gate Pure Brew. Carlsberg, an earlier entrant into the non-alcoholic beer sector since 2015, has predicted that its own version will grow three times faster in comparison with its overall beer sales.
Aside from changing consumer tastes, the trend in zero alcohol beers has a more powerful incentive behind it. Non-alcoholic beer doesn’t have tax and, thus, it generates 150% more revenue. If Americans take to it as much, perhaps more, as their European counterparts, then Heineken will have a windfall in its hands.
We are just thankful that the new product is in the United States because it means more choices for drinkers, and the more choices there are, the better for us.