Beer brand banking on growing contingent of near-beer lovers in Canada
TORONTO—Budweiser is launching its first non-alcoholic beer since Prohibition in Canada in the hopes of sating a growing thirst for near-beer.
Canadians have increasingly guzzled low- and non-alcoholic beverages in recent years, and Labatt, which has brewed Budweiser in Canada since 1980, is counting on that to continue.
“We see a big opportunity,” said Kyle Norrington, Labatt Canada’s vice-president of marketing.
Labatt already sells several other non-alcoholic beers in Canada, but the launch of Prohibition Brew this week will mark the first under the Budweiser brand name.
Anheuser-Busch InBev, the parent company, wants non- and low-alcohol beer to make up 20 per cent of its global beer volume by 2025.
The 20 per cent goal is ambitious, Norrington said. But he believes the Canadian market is one that can help the company meet that goal.
“We’re a country of beer lovers,” he said.
Norrington said this product is for those suds fans who enjoy the taste of beer without the buzz.
He points to Germany, home of Oktoberfest, as a country where beer lovers appear to have embraced alcohol-free alternatives. In 2013, nearly half of consumers bought an alcohol-free beer, according to market research firm Mintel.
Like Germans, Canadians also seem to be buying more non- and low-alcohol beverages.
Last year, Canadians consumed 11.6 million litres, according to Euromonitor International—an increase of 9.1 per cent over the previous year. That preceded double-digit annual growth from 2010 and 2014, the market research firm says.
The market is unlikely to stop expanding any time soon. From 2015-2020, sales volume is expected to grow by more than eight per cent a year, Mark Strobel, a Euromonitor International research analyst, said in an email.
Strobel said the rise in the non-alcohol business is being driven by young people who are more socially responsible and avoid booze on certain occasions but still crave the taste of beer. Older folks who want to limit their alcohol intake are also behind the trend, he said.
Despite continuous growth, non-alcoholic beer is still a fairly small market in Canada, particularly when compared to the overall beer business.
For the year beginning at the end of March 2014, Canadians drank 2.257 billion litres of beer, Statistics Canada data shows.
Still, Labatt is confident Budweiser will be the top choice for non-alcoholic beer drinkers—so much so that $6 million has been invested in equipment to make Prohibition Brew.
Labatt will make the drink available in some convenience stores, grocery stores and fast-food outlets.
“We think this product in this category is here to stay for the long term … paving the path for what I believe will be a much bigger category years from now,” Norrington said.