OnTap Magazine

ontapmag.co.za | Autumn 2025 | 23 F resh opportunities often come out of macroeconomic headwinds, but crafting beers that resonate with today’s consumers against a backdrop of economic downturns and policy shifts is not an easy road to navigate. As we embrace 2025, where Dry January was once a cruel month for many a brewer’s beer sales, the global beer market continues to face challenges while also seeing potential for growth, especially in product categories and innovations, and in new markets, not least the meteoric rise in non-alcoholic beer. Rapidly developing economies in Asia, Africa, and Latin America present significant potential for beer sales as disposable incomes increase. In contrast, established beer markets like North America and Europe are experiencing slower growth due to factors like demographic shifts, changing consumer preferences, and increased competition in the alcoholic beverage space. Brewers are simplifying their portfolios, taprooms are shifting further toward “beyond beer” offerings, and the larger global players continue their quest for acquisitions and further consolidate the industry. In the UK, the recent acquisition of soft drinks andmixers manufacturers, Britvic PLC, by brewers Carlsberg, is merely the most obvious example of this trend. And in the US, there is the global cannabis giant Tilray acquiring leading craft beverage brands including four craft breweries from Molson Coors Beverage Co. Savvy brewers are pivoting to non- and low-alcohol offerings. After all, this is one area showing strong sales growth, albeit from a low base. They are also going more local, adapting to the needs of the health- conscious and environmentally mindful consumer, and embracing technology and AI. With the growing awareness about alcohol consumption and its health impacts, Government regulations on alcohol marketing and taxation have limited industry growth to the extent that in mature markets further alcohol duty increases do not result in increased tax revenues, but rather in increased business failures. However, there is no doubt that the transformative winner in the growth category is non-alcoholic beer. With the demand driven by the health- conscious consumer, in particular Gen Z or Zoomers, and the ‘sober-curious’ movements worldwide. There is greater acceptance in social settings where non- alcoholic beer is seen as respectable and the stigma around it being boring is vanishing fast. This is aided by evolving technology that improves the flavour profiles of non-alcoholic beers, and which has allowed near-beer versions of alcohol-free flagship brands including IPAs, stouts, and lagers; the latter beer style being one of the more challenging for matching taste profiles. Lower tax has also favoured the low alcohol beer sector where such beers are preferred by both younger and older drinkers alike who prefer to socialise on session beers without the day-after consequences of alcohol’s negative effects. In fact, flexitarian drinking – switching between alcoholic and non- alcoholic beers – is becoming perfectly ordinary. Brewers are under considerable pressure to add non-alcoholic versions of their regular brands. A customer in a bar who chooses a fruit juice, may be buying it in place of a wine or a spirit, or may not be substituting at all. However, a customer who orders a no-alcohol beer is definitely substituting for an alcoholic beer, and if you do not have a non-alcoholic beer in your portfolio, the beer they may be substituting out could be yours. On one level, therefore, the current proliferation of non-alcoholic or low alcohol brands is a necessary defensive strategy. The race is also on to produce the market leader in the sector; the brand that will become the must stock product. Depending on the method used, there are additional costs associated with the manufacture of no-alcohol beers, whether they be in R&D, additional plant and technologies, separation of flow streams, innovation of new processes and methods. Never mind that these will decline over time, such costs are - in the vast majority of tax jurisdictions – considerably less than the price premium on beer resulting from the tax on the alcohol in the beer. The gains for the brand that emerges as the sector leader look to be immense. In short, not only are brewers investing in the no- alcohol sector in response to changes in consumer preference, but they are also hugely incentivised to do so. THE MINDFUL DRINKER Over a third of brewers produce "beyond beer" drinks in their breweries. These beverages include hard seltzers and sodas, FBMs (flavoured malt beverages) and oenobeers (a beer-wine hybrid made by co-fermenting wort and must). Some brewers will differentiate the beyond beer beverage to be closer to beer by flavouring with hops. While the interest in these beverages continues amongst consumers attracted by the next new bold flavour, hard seltzer volumes have flatlined; although there is continued innovation in this category focusing on new flavours and/or cross-category collaborations venturing into the "non beyond beer" space – a case of blurring of beverage categories, literally mixing it up. However, the truism that has held for the last 25 years in the beer world that what happens in the US today happens everywhere tomorrow, has not necessarily applied to this sector, as a number of brewers have found to their considerable cost. The diversity of offering across both the alcoholic and non-alcoholic beyond beer beverages is greater than ever before. Throwing things at the market and seeing what sticks, which appears to be the reason behind some of the brands in some of these categories, is a marketing technique more usually associated with breakfast cereals and potato crisps/ chips, rather than beer. The fact that it is on the increase in the beverage world does highlight the fact that no one really knows where the next new ‘big thing’ is likely to come from. That said... for those who love the tropical, herbal, piney aroma of hops but without the alcohol and calories of beer DIVERSIFYING BEYOND BEER