• Concern over binge drinking and related health issues has revived the market for low-alcohol drinks, boosting sales by 10% in volume and 12% in value to stand since 2006 at 20 million litres worth £66 million in 2008.

• Lager dominates, buoyed by investment in new lower and mid-strength variants, but cider sales are finally moving forward and wine is said to offer greatest potential.

• What impact are the Government’s responsible drinking strategy and the anti-binge drinking lobby having on the low alcohol drinks category?

• Which soft drinks categories offer greatest competition to low alcohol drinks?

• Which sub-categories are attracting greatest investment in innovation and marketing?

• Is the current category growth forecast to continue.

This report covers drinks which have been brewed or fermented to a significantly lower alcoholic content than the standard for that type of drink or, having been produced at full strength, have then been subjected to a further process, other than dilution, in order to remove or reduce the level of alcohol.

There are several terms used to describe the alcohol content of drinks, all of which are strictly defined. The term ‘non-alcoholic’ may only be applied to drinks that have never contained any alcohol at any stage of production. An example of a non-alcoholic beer would be the US soft drink root beer.

• Drinks with less than 0.05% ABV are referred to as ‘alcohol-free’

• Those between 0.05% and 0.5% ABV as ‘de-alcoholised’

• Drinks with more than 0.5% but less than 1.2% ABV are described as ‘low-alcohol’. ‘Low-alcohol’ is also used for beers of between 0.05% and 0.5% ABV.

• Drinks with more than 1.2% ABV but less than 2.6% ABV are described as ‘light to mid-strength’ drinks. This category was not covered in the 2007 Mintel report and is only covered in the written analysis and NOT included in market size calculations.

Most beers, ciders and wines covered in this report are included in one of these three categories.

ADAs (alcoholic drinks alternatives) are non-intoxicating drinks with an ABV not in excess of 0.5% which are intended to provide a direct substitute for an alcoholic version of the same kind.

For wine, the situation is more complicated, as drinks with less than 5.5% ABV are regarded as ‘low strength’. Drinks with more than 1.2% but less than 5.5% ABV may be called ‘reduced alcohol wine’, provided that the alcohol level has been reduced by means other than dilution but will be liable to excise duty. There is a wide variety of wine-based drinks on the market within this strength range, including coolers, fizzes and spritzers, but these tend to be wine diluted with spring water or unfermented grape juice. Such drinks are classified by HMRC as ‘made wines’ and are not included in this report as they are, to some extent, in competition with wines of less than 1.2% ABV.

In describing the whole sector, the media have adopted the phrase ‘no-alcohol/low-alcohol’. Within the trade, however, the term ‘no-alcohol’ is rarely used and all major brands with less than 0.05% ABV are described as ‘alcohol-free’.

Some confusion may result from the use of the US term ‘lite’, particularly for lager. This refers to a lower than standard level of carbohydrates, sugar and/or calories, rather than alcohol. The process used can turn the sugar into extra alcohol, and so lite beers are generally no lower in alcohol content than standard beers, and are frequently stronger than average.

All market sizes are calculated on the basis of both on- and off-licence sales at retail selling prices (rsp) unless otherwise stated. Duty-free sales and personal imports of duty-paid purchases from other EU countries are excluded, so that data refer only to sales of wine on which duty is paid within the UK.

Value figures throughout this report are at retail selling prices (rsp) unless otherwise stated. Market sizes at 2008 prices are calculated using Mintel’s alcoholic drinks deflator.

Excluded

• Soft drinks that are positioned and marketed as alcoholic drink substitutes (primarily premium soft drinks) are not included.

• Pre-mixed shandy, although it may contain up to 0.5% ABV, has historically been regarded by the trade as a soft drink and, as such, has been excluded from this report.