On October 6, the 2024 Munich Beer Festival, also known as the 189th Munich Beer Festival (hereinafter referred to as the beer festival), officially concluded after 16 days. This year, according to official statistics, the average price of a 1-liter beer purchased at the beer festival has increased by 3.87%. Analysts point out that since 2019, food prices have risen by about 20%, factors contributing to the price increase include rising labor costs, labor shortages, and higher energy prices, making the construction and storage of large festival tents increasingly expensive.

At the same time, the proportion and popularity of non-alcoholic beer (also known as alcohol-free beer) at the booths have also increased. This year, the beer festival had a total of 18 tents, of which 16 tents, in addition to traditional beer, also offered non-alcoholic beer at the same price as regular beer. It is worth mentioning that this summer, the Munich government announced the opening of the first 'Alcohol-Free Beer Garden' to cater to changing alcohol consumption habits. The garden remained open until a week before the opening of the beer festival.

2024 Munich Beer Festival image source: Matthias Schrader/AP

Catering to health demands, the market has shown excellent growth.

The opening of Munich's first 'Alcohol-Free Beer Garden' further reflects the continuous decline in beer consumption in Germany in recent years. According to a report by the German Federal Statistical Office (Destatis) in August this year, beer sales in Germany in the first half of 2024 decreased slightly by about 0.6% compared to the same period in 2023. It is worth noting that despite the 2024 European Football Championship hosted by Germany in June (June 14 to July 14), this slight decrease indicates that German breweries did not achieve the expected sales growth. Additionally, the Federal Statistical Office of Germany reported that despite the sporting event, June of this year was the lowest month for beer sales in Germany since 1993.

Nevertheless, this does not mean that people are not drinking beer, more people are just opting for a clearer choice: non-alcoholic beer. The latest data from the German Federal Statistical Office report did not include the sales of non-alcoholic beer, but the German Brewers Association stated, 'According to industry data, in the first half of 2024, sales and retail sales of non-alcoholic beer achieved double-digit growth rates nationwide in Germany.'

The arrival of the 2024 European Football Championship did not result in the expected sales growth for German breweries. Image source: Ina Fassbender/AFP

This growth trend also occurred in other industry giants' countries. Last year, according to the European Brewers of Europe report of the Brussels-based industry institution, non-alcoholic beer accounted for over 5% of the Belgian beer market; between 2021 and 2023, the Belgian non-alcoholic beer market grew by 24.3%, and industry experts predict that it will achieve double-digit growth again in 2024. In May of this year, the global alcoholic beverage authority research institution IWSR reported that non-alcoholic beverages performed strongly in the USA in 2023, with overall sales increasing by 29% compared to 2022, driven mainly by non-alcoholic beer/cider. At the end of July this year, data from the "2024 Taobao Domestic Beer Report" released by the Chinese e-commerce giant Taobao shows that since the beginning of this year, the search volume for non-alcoholic beer and 0-degree beer on the Taobao Tmall platform has more than quadrupled, becoming a new favorite in the market sought after by young people.

Non-alcoholic beer is actually not a new phenomenon, it can be traced back to the early 20th and 30th centuries when some beer breweries introduced 'near beer' low-alcohol products. It wasn't until the 1970s that the German beer brewer Clausthaler introduced what is considered the world's first non-alcoholic beer product, after which other famous breweries also officially launched their own non-alcoholic products, such as the Kaliber beer launched in 1986 by the Irish brewery Guinness, or non-alcoholic beer products offered by the world's oldest brewery Weihenstephan since the 1990s.

Clausthaler non-alcoholic beer is considered the world's first non-alcoholic beer. Image source: Shutterstock

In the past, non-alcoholic beer was mainly accepted as an alternative for specific groups of people, such as pregnant women or alcoholics, but with the increasing promotion of a healthy lifestyle, it has now become one of the widely popular types of beer, especially favored by the younger generation - compared to their elders, today's young people pay more attention to their health status or they may not want to be bothered by hangovers the next day. An analysis of self-reported trends in American drinking habits initiated by Gallup last year showed that more and more Americans believe 'even moderate drinking is harmful to health', with young people (under 35 years old) particularly concerned about this.

Susie Goldspink, IWSR's Low/No Alcohol Market Analysis Director, pointed out, 'Consumers are increasingly focusing on moderation, health, and health care, which is having a positive impact on all subcategories of non-alcoholic beverages, with growth rates higher than those of alcoholic beverages.' According to market insights from IWSR's August report this year, millennials play a leading role in driving the growth of non-alcoholic consumption, and this role is continuously strengthening.

Millennials play a leading role in driving the growth of non-alcoholic consumption. Image source: nabeerclub.com

Fierce market competition, with enhanced promotion through sports events

Overall, the increasing popularity of non-alcoholic beer is due not only to age-related and health-related issues but also to the vigorous development of the non-alcoholic beer market and the increasingly refined brewing technology. Taking Germany as an example, the German Brewers Association points out that there are currently over 800 varieties of non-alcoholic beer locally, with an 8% market share, ranking first in the world.

Weihenstephan's Chief Brewmaster Tobias Zollo expressed his love for non-alcoholic beer. On the eve of the beer festival, the brewmaster told the Associated Press, "If there could be an alternative that is just as refreshing as the classic Weihenstephan beer but without alcohol, we would certainly be willing to try it." He mentioned that he undoubtedly prefers real beer, but also admitted that "you can't drink beer every day," for example, during everyday work or lunchtime. He also pointed out that thanks to the brewery's increasingly sophisticated alcohol evaporation process, non-alcoholic beer can achieve the same taste as regular beer, while being lower in calories than soft drinks.

Image source of the non-alcoholic beer launched by Weihenstephan: Matthias Schrader/AP

For a long time, non-alcoholic beer has been discouraged by the perception that it "tastes bad." Roel Dekelver, spokesperson for the well-known Belgian chain supermarket Delhaize, bluntly stated in an interview with the local television channel VRT this year, "Five to ten years ago, there might have been only five products related to our supermarket. We must also admit that the taste of non-alcoholic beer is different from traditional beer." Now, with more and more non-alcoholic beer products available and with innovative brewing technologies improving, the taste has approached or even reached the level of traditional beer, breaking the prejudice of "bad taste" and making more people willing to try and accept it.

The growing interest of consumers in non-alcoholic beer signifies a huge development space in the non-alcoholic beer market. More and more players are entering this field, whether they are traditional well-known beer brewers or emerging independent brands, indicating the maturation of this sector and reflecting intense market competition.

Regarding large beer brewers, companies like Carlsberg in Denmark, Heineken in the Netherlands, Anheuser-Busch InBev in Belgium, Asahi Beer in Japan, and major Chinese beer giants like Tsingtao Brewery, Chongqing Brewery, Beijing Yanjing Brewery have all expanded into the low-alcohol and non-alcoholic product sectors. In the Chinese market, giants such as Tsingtao Brewery, Chongqing Brewery, Beijing Yanjing Brewery have also launched non-alcoholic beer products. To further enhance their position in overseas markets, Tsingtao Brewery introduced its 0.0% alcohol-free beer (known internationally as Tsingtao 0.0) into the American market, and prior to that, this product had been sold in South Korea, the United Kingdom, France, Australia, and other countries.

Tsingtao 0.0 alcohol-free beer previously won the 2021 'European Beer Star' Gold Award. Image source: Tsingtao Brewery

Anna MacDonald, Marketing Director of Guinness at Diageo Group, recently revealed to the British marketing media MarketingWeek that in the UK, the group currently positions the brand's non-alcoholic beer Guinness 0.0 on equal footing with its classic stout Guinness draught to strongly support the development of non-alcoholic products locally. However, Anna MacDonald also said, "If you want to make consumers shift and see it as equal to Guinness Draught, as a brand, you need to achieve this in your marketing approach."

Indeed, major beer brewers including Guinness are intensifying their marketing efforts for non-alcoholic products to raise broader 'non-alcoholic consumption awareness,' promoting consumption while further expanding the market. Leveraging the long-standing close connection between beer and sports viewing, naturally, sports events have become a major stage for the current competition in promoting 'non-alcoholic' products. Just as Nuno Teles, Diageo UK's Managing Director, mentioned to the British food retail magazine The Grocer, those who choose not to drink alcohol while watching sports broadcasts do not want to feel left out, "which is why we believe that sports viewing is one of the main scenarios with growth potential for (non-alcoholic beer)."

Guinness 0.0 non-alcoholic beer, launched in 2021. Image source: Guinness

As early as 2020, Heineken took the lead in adjusting its marketing direction. It partnered with UEFA Europa League to promote its non-alcoholic beer Heineken 0.0, achieving the largest single sponsorship agreement ever based on the scale of non-alcoholic beer. Afterwards, Heineken actively showcased Heineken 0.0 at various major sports events, including becoming the first non-alcoholic beer to appear at the USA's Super Bowl (the annual championship game of the NFL). In addition, Kronenbourg became the official sponsor supplier of the Tour de France with its non-alcoholic beer brand Tourtel Twist in 2022, and last year distributed 400,000 cans of Tourtel Twist beer at the event to further promote its non-alcoholic beer.

In 2024, as a big year for sports events, the presence of "alcohol-free content" in sports events becomes more prominent. Anheuser-Busch InBev chose to promote its Corona Cero non-alcoholic beer at the highly anticipated 2024 Paris Olympics. Diageo's Guinness announced a four-year sponsorship agreement with the English Premier League in June, with its Guinness 0.0 becoming the official designated beer of the Premier League starting from the 2024/25 season. Heineken continues its layout, as the official beer sponsor of the US Open tennis tournament, it this year exclusively provides a limited edition designed "Love.Love" Heineken 0.0 beer at the sports venues. Athletic Brewing, an emerging non-alcoholic beer brewer in the USA, recently announced a groundbreaking partnership with Arsenal Football Club, becoming Arsenal's first official non-alcoholic beer partner.

Corona Cero "Dedicated to Every Golden Moment" event poster and Corona Cero Olympics-themed bottled beer. Image source: Anheuser-Busch InBev

Heineken creates exclusive limited edition "Love.Love" Heineken 0.0 non-alcoholic beer for the 2024 US Open tennis tournament. Image source: Heineken beer

Athletic Brewing becomes the first official non-alcoholic beer partner of Arsenal. Image source: Athletic Brewing

Susie Goldspink, IWSR's Director of Low/No Alcohol Market Analysis, believes that in many sports events such as the Olympics, switching to non-alcoholic beer versions is often the most common marketing strategy for beer brewers, partly because it is a growing field and also contributes to the responsible drinking issue they advocate for.

Clearly, the market becomes more crowded, the competition also becomes fiercer, making it more difficult for some breweries that have set targets to achieve those goals. In Anheuser-Busch InBev's sustainable development goals announced in 2016, one point was to plan for non-alcoholic and low-alcohol products to account for 20% of its total sales by 2025. This target is a commitment made by the global leading brewer to promote responsible drinking and meet global consumers' demand for healthier choices. However, according to Reuters, the group indicated in its 2023 annual report that it may not be able to achieve this goal.

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