Is Low and No really an opportunity in Convenience?

In a year where you might assume many will turn to alcohol, the low and no category continues to grow exponentially. Sales of low- and no-alcohol drinks are up 30% year-on-year in the off-trade. According to Nielsen, the category as a whole is now worth £188m at retail. But what about low and no in convenience stores?

With hospitality closed or limited for much of this year, where are drinks being consumed? KAM research shows that more than a third of UK adults have consumed a low or no alcoholic drink at home. This nearly doubles when looking at Generation Z and Millennials specifically.

Low and no drinking at home

1-in-10 UK adults have consumed a low and no variant with their lunch at home. Nearly 1-in-5 with their evening meal. It surely can’t be long before they appear as an option on a meal deal.

19% of drinkers have purchased a low and no drink from a convenience store compared with 59% from a supermarket. This is a category which the industry is not only seriously under-index in sales-wise but also from a customer satisfaction perspective. 36% of customers thought the low and no range was “good or very good” in their local convenience store, compared with 67% at their local supermarket.

Convenience is losing sales to supermarkets

Retailers are losing sales via other routes to markets too. Direct-to-consumer sales of no- and low-alcohol brands have also exploded, with 0.5% abv lager Lucky Saint reporting that online sales had increased by 300% in the four weeks leading up to 17 May compared to the same period last year.

Convenience has seen a growth in Low and No. According to the Retail Data Partnership, unit sales of non-alcoholic beer in UK convenience stores doubled in the last 6 months of 2019, and distribution trebled, albeit from a very low base. However, the top 5 SKUs accounted for more than 80% of non-alcoholic beer sales.

Retailers and brands who want to maximise this growing category will need to first understand the consumer and customer perspective. This category potentially impacts many associated categories, many shopping missions and many consumer occasions. Learning exactly what the customer wants, will be the key to success.

KAM is launching a new deep dive into the Low and No drinking occasion in January 2021 – sign up to access the research here.