The potential and the contradictions of alcohol-free wines: a question of taste, quality and market

Everyone is talking about alcohol free wine - is it really “the next big thing”? Health awareness and changes in taste have made the wine world chase down old and new consumers, to win back market shares, including the category of alcohol-free wines. The issue, however, is much more complex than one would think. The Heilbronn University in Germany - the most receptive market to date of the segment - recently concluded a four-year survey of German consumers (1.500 people from the general population), and discovered that there are limited categories interested in alcohol-free wine products, and that their motivation has really less to do with health or money, but rather, taste. This was a surprising discovery and a key that very few people in the sector have actually addressed, explained Clemens Gerke, Chief Editor of the magazine, “Weinwirtschaft”, and Anja Zimmer, Chief Editor of “Meininger’s International”, and the annual report of the Silicon Valley Bank on the “State of the US Wine Industry 2024”. interspersed with tasting eight samples of alcohol-free wines from all over the world (awarded by the Mundus Vini Competition, specifically dedicated to this category of drinks). A bit of context, however, is necessary. Let’s begin with one of the most widely publicized and recounted controversies - the WHO, which revised safe consumption of alcohol to “zero glasses” for day. Moreover, we are living in a period in which more and more young people (the latest statistics estimate 50%) have decided not to consume alcohol, and there are more and more adults, especially the habitual alcohol drinkers, who have decide to reduce how often they drink (Dry Januarys are now well known and widespread, as is Sober October, removing 2 months of consumption from the total 12 each year). According to some people, alcohol-free wines could represent a breath of fresh air, in the current and widespread disinterest towards wine, in terms of simplifying or perhaps a solution to the obstacles that politics and healthcare are putting up to discourage alcohol consumption and the problems it generates. Solutions, for instance to the distribution channel full of obstacles (licenses and monopolies, specialized shops), to more and more complicated regulations (raising the legal drinking age, stricter labels, taxes/duties/excise duties, fewer shops), and advertising restrictions. And, they could represent an opportunity for innovation, for new markets as well as new loyalty for the entire wine sector.

The survey carried out in Germany divided the participants into 8 categories regarding interest in alcohol-free wines. Only 3 responded, which were the antagonists, ideologically opposed to alcohol, do not consume it because of taste or health, and represented 12.5% of the sample, the connoisseurs, who, as wine appreciators though not experts, are willing to consume alcohol-free wines, and represent 21% of the sample, and the young adventurers, who are looking for new things, are generally curious about new experiences and represent 11% of the sample. The first group is not willing to spend more than 2 euros a bottle for alcohol-free wines, and are therefore not the right consumers to approach (given production costs). The groups of connoisseurs and young adventurers, however, allow a spending ceiling up to 6.50 to 7.00 euros. What are the reasons that make consumption of alcohol-free wine interesting in Germany? You don’t lose your driver’s license (80%), you don’t get drunk (71%), health issues (67%), curiosity about the product (67%), pregnancy (51%), social events (34%) and religious issues (12%). It would seem, therefore, that the group of connoisseurs who have decided to alternate alcohol consumption and periods/moments of non-consumption, and the group of young adventurers, which is the smallest, would be more approachable.

The Silicon Valley Bank report, which asked the question, “Why do you consume less wine today”, the highest percentage of answers concerned health (I consume less alcohol, 16.7%), budget (I have less money to spend, 16.2%), taste (I prefer other drinks, 9.8%), diet (I consume less sugar, 9.3%), and occasions (I have no reason to drink it, 8.8%). The reasons related to taste totaled 41.7% of the responses, related to health 26.5%, and those related to economic issues 23%. The perception of taste, therefore, is central and must be explored further. Consumers want to consume fewer calories and alcohol-free wine contains a lot of calories. In order to enhance the aromas, which through the de-alcoholization process are lost (while alcohol enhances them in the glass), sugar is added. Sugar is perfectly perceived on the palate, creating that sweet/sour contrast typical of alcohol-free wines. In the German survey, taste is also an issue for wine connoisseurs, who are accustomed to a drink that has a completely different flavor. Communicating alcohol-free wines as a “substitution” for wine could, therefore, be the wrong choice. It would be more useful to focus on special “occasions”, such as events, holidays and dinners, where juices or soft drinks have so far participated in the toasts. The success of non-alcoholic beer, for instance (a drink that is actually easier to de-alcoholize due to its lower alcohol content, resulting in being more aromatically coherent than the original product). In fact, the focus was not on substitution, but on being isotonic and refreshing, creating new moments of consumption.

How is the market doing? It seems to be growing for large companies, which have the budgets to invest in expensive production processes (but must pay attention to positioning strategies), as well as small companies, which can use the filtration method (it works better, but only on small lots), and do not have to pay attention to market strategies, because a small production can also be served directly at the winery. In the United States, growth potential is expected to reach 6.4% by 2030, and figures to reach 1 billion US dollars. The main competitors whose segment is being “stolen”, are non-alcoholic cocktails (30% of Millennials and 37% of Generation Z have chosen) and non-alcoholic beer (15% and 16% respectively), while only 9% of Millennials and 10% of Generation Z chose alcohol-free wine. According to the IWSR Drinks Market Analysis - No/Low Alcohol Strategic Study, to push growth it is useful to assure consumers that it is good. Focusing on social media celebrities and brand familiarity (taking advantage of “brand awareness” of wines already on the market), would be a successful strategy as well as those occasions where competitor drinks are consumed (aperitifs and parties). Restaurants could also contribute to the diffusion of alcohol-free wines by studying “ad hoc” pairings (with the help of producers who are testing alcohol-free wines that have added aromas to facilitate pairing with food). Pairings are still quite difficult to make, according to the tastings carried out. Absolutely correct and pleasant alcohol-free wines (awarded at the Mundus Vini Competition), at the moment are easier to imagine suitable for toasts or an aperitif, as we have discussed above, compared to adopting market strategies enabling understanding, appreciating and then selling the product. The wines were served, in the following order: Schloss Wachenheim, Light Live 0.0% Sparkling Rosé (Germany), Mionetto, Alcohol Free Rosé 0.0% (Italy), Lea Winery, Franc Lizer Spumante Blanc de Blancs Alcohol-free Wine 0% (Italy), Weingut W. & A.Löffler, Blanc de Blanc Alkohol Frei Null Alkohol - Voller Genuss (Germany), Neuspergerhof, Jederzeit weiß (Germany), Cantina Zaccagnini, il Tralcetto Vino Dealcoizzato Bianco (Italy), Rotkäppchen, Doppio Passo Primitivo Alternativa (Italy/Germany), Miguel Torres, Natureo Garnacha - Syrah 2022 (Spain), and all had very intense aromas (essentially primary, that is, floral and fruity, except for some tropical, citrus or balsamic, and even spicy, in the red versions), and obviously emphasized, if there were bubbles. On the palate, sweetness was perceived in various intensities, contrasted though in all the wines by a sharp acidity, reminiscent of lemon juice. The reds might add a bit of complexity, especially in the mouth, where the tannic sensation of the original wine remains, giving a sensation of greater persistence and structure.

Aside from taste, there are several other contradictions and problems regarding alcohol-free wines. One is economic sustainability. Producing alcohol-free wines costs significantly more than producing wine, because de-alcoholization and any subsequent gasification to make it effervescent are added to the production costs of the wine. Expensive machinery is necessary, and quantities of product and quantities of aromas are lost. On one hand, it is necessary to strategically sell the wines on the shelf together with their alcohol-free versions, to justify their prices (definitely higher than any other non-alcoholic drink). On the other, it is misleading for the regular consumer, who thinks he is buying something that is similar in taste, when all the experts are warning that there is no need to compare the two categories. The second contradiction concerns an essential topic nowadays, which is environmental sustainability. There is a production chain put in place to create alcohol (in this case from grape bunches), followed by a production chain to remove the alcohol. A lot of energy is used during the process, a lot of water is wasted also, and, again, product is lost. It is therefore not exactly a virtuous process, which health enthusiasts definitely take into consideration. Lastly, perishability. Since they do not contain alcohol, alcohol-free wines must be consumed quickly, and consequently have an expiry date, which must be communicated to consumers. The risk is that people like the young adventurers drink the alcohol-free wines months after purchasing them, and will then have a negative experience that they would attribute to the quality of the product, rather than to the alteration of the liquid.

All of these considerations fit into a context in which, it is worth noting, Italy and its producers are still waiting for a National regulation that allows for producing alcohol-free wines within the National borders, in compliance with the EU regulation on the issue, that are already effective in France, Spain, and so on. Net of the entrepreneurial and political vision, there are those who would like to consider alcohol-free wines within the galaxy of wine, and those who do not consider them wine and instead would like them to be called by another name.