Double-Digit Growth: Non-Alcoholic Beverages Targeting Young Adults
The development of products targeting young adults who either cannot or choose not to consume alcohol is rapidly accelerating. According to Suntory Holdings, the market for non-alcoholic beverages has expanded significantly, reaching approximately 1.4 times its size a decade ago. A 2019 survey by the Ministry of Health, Labour, and Welfare revealed that the percentage of men with drinking habits had decreased by almost 20 points compared to two decades ago, standing at 33.9%. Over the past 20 years, the number of men with drinking habits has sharply declined, contributing to the sustained growth of the non-alcoholic and low-alcohol beverage market.
In recent years, Japan has witnessed a remarkable improvement in the taste of non-alcoholic and low-alcohol beverages, a factor playing a crucial role in this market expansion. Innovations by major alcohol beverage manufacturers in Japan are poised to bring fresh perspectives and approaches to the global stage.
Non-Alcoholic and Low-Alcohol Beverages Align with Diverse Lifestyles and Values
The market for these beverages has diversified beyond beer to include cocktails, sake, and more. Consumers are increasingly choosing such products for reasons like “no hangover the next day,” “not wanting to get too intoxicated,” “being able to study or work even after consumption,” “being able to drive,” and “finding moments for relaxation between remote work and private life.”
The 5th by SUMADORI-BAR: A Specialized Non-Alcoholic and Low-Alcohol Bar
On October 29th, SMADORI, a joint venture between Asahi Breweries and Dentsu Digital (Tokyo, Minato), launched “THE 5th by SUMADORI-BAR” in Shibuya, a bar specializing in non-alcoholic and low-alcohol beverages. Representative cocktails such as “Zazen” made with cold-brewed gyokuro tea and “Transparent Mont Blanc” made with Mont Blanc-flavored carbonated water are priced at 1,500 yen including tax. Among the 20-plus cocktails offered, some are non-alcoholic, while others allow customers to choose an alcohol content of 3%. Consumers express a desire to explore various ways of consumption, stating that they find the appeal of alcoholic beverages lies in the stories they can tell about them.
Mini-supermarket shelf
It is evident that even in small supermarkets, there is a sufficient selection of non-alcoholic and low-alcohol beverages, indicating an expansion in consumer demand. These stores carry a comprehensive range of non-alcoholic and low-alcohol products, including offerings from the four major companies, health-focused “fat-burning” non-alcoholic options, wines, sparkling wines, popular Japanese highballs and lemon sours, large-sized packs, craft beers, and all the essential non-alcoholic and low-alcohol products.
Asahi Beer Unveils Innovative Non-Alcoholic “Asahi Dry Zero Foam Mug Can” with Fully Open Lid
Asahi Beer announced on the 1st of the month the upcoming release of “Asahi Dry Zero Foam Mug Can,” a non-alcoholic beer utilizing a fully open lid that allows the foam to rise, replicating the experience of a freshly poured draft beer. This marks the first instance of applying the full-open can technology, previously introduced with the beer “Asahi Super Dry Draft Mug Can” in 2021, to a non-alcoholic beverage. The move is aimed at capturing the demand of the younger generation. Learn more about this groundbreaking development in the world of non-alcoholic beverages.
Asahi Beer aims to provide a delightful and exciting experience, capturing the essence of enjoying beer without the alcohol.
Oportunity for innovation ideas from Japan.
Based on the sales quantities of four companies in Japan, the market shares are calculated as follows( year 2023).
- Asahi: 36.5%
- Kirin: 35.7%
- Suntory: 16.2%
- Sapporo: 11.6%
Those big companies have tecnology and continuous innovation.
Here is key themes to watch to get ideas from Japan market for innovative products.
1. Functional Foods:
Low-carb products: Aligned with the trend of low-carb and carbohydrate-restricted diets, products targeting health-conscious individuals are popular. Fat-burning support products: With increased awareness of health and diet, products promoting efficient fat burning have garnered attention.
2. Indulgent and Premium Products
Featuring Abundant Use of Fruits:
Luxurious fruit juices: Popular among women, products offering 100% fruit juice to experience the authentic taste of fruits are in high demand.
3. Recreation of Authentic Pub Flavors in Beverages:
Authentic lemon sours and highballs: Alcoholic beverages with the flavor profile of traditional pubs are easily enjoyed, appealing to a broad audience. Premium Shochu and Sake: High-quality shochu and sake with a focus on regional specialties and production methods have gained popularity.
These trends reflect a growing interest in health and a diverse palate among consumers in the Japanese food market. It suggests a demand for products that cater to various preferences and align with the evolving health-conscious and taste-focused consumer landscape.
Oportunity for sales into Japan market non/low alcoholic category.
- Sparkling and Lightly Carbonated Beverages:
- Despite the popularity of sparkling and lightly carbonated beverages in Japan, the non-alcoholic and low-alcohol product range is limited, and there is a scarcity of products with authentic flavors and a focus on high-quality ingredients.
- Craft Beer:
- While non-alcoholic and low-alcohol versions of craft beers have been introduced in Japan, the variety remains limited. The non-alcoholic and low-alcohol craft beer category is considered a white space, presenting opportunities for expansion and diversification similar to the authentic craft beers found worldwide.
- Wine:
- In the non-alcoholic wine segment, Suntory’s “Non-Al Holiday” is a prominent player. However, the range of non-alcoholic wines is relatively limited in terms of the diverse regions and grape varieties found in traditional wines. This might suggest an unmet consumer demand for a broader selection in the non-alcoholic wine category.
- Herbal Products:
- Herbal products, a trend gradually gaining popularity overseas, are relatively new in Japan and represent a white space in the market. This category presents an opportunity for introducing innovative and herbal-infused products that cater to evolving consumer preferences.
These insights highlight potential areas for improvement and innovation in the Japanese non-alcoholic and low-alcohol beverage market. Enhancing variety, authenticity, and meeting diverse consumer needs are key considerations for further growth and success in these categories.
Source: Nikkei MJ 1st December 2023, 22th September 2023 , Suntory Non-Alcoholic Beverages Report 7th November 2023 , Asahibeer website, Martner Japan market research.