09 January 2024

Unleashing the Spirit

Unleashing the Spirit: Evolution of Brand Positioning in the No/Lo category

In case you’ve missed it, the LoNo category has become big news. According to a recent YouGov poll, over 68% of drinkers have tried low or non-alcoholic drinks, the category now commanding a 3% volume share of the UK alcoholic beverage market. This trend is only expected to grow as the category anticipates a 7% CAGR until 2026. Whilst any cursory glance at trends will tell you this growth is largely driven by the heavy recruitment of Gen Z and the blurring of lines between health, fitness, and alcohol, what has gone under the radar is the profound transformation of the brands that we associate with LoNo.

Over the last 3-4 years, we have witnessed the category undergo a significant transformation from the ‘traditional image’ of the bland alternative for designated drivers to the drink of choice for adventurers, taste explorers, those that want to have fun and to ride the party high whilst also being able to be a member of the 5am club.

This change has been driven by the dynamic evolution of brand positioning. Historically, brands in the LoNo space occupied a quiet corner of the market, targeting audiences with a series of high functional adverts about the effects of drink driving. There was little to shout about and very little innovation. In 2014, we saw the first real innovative shift in the category; firstly with Seedlip, proclaiming themselves the first zero-alcohol distilled spirit and then with Big Drop Beer in 2016. These first pioneers were quickly followed by others who positioned themselves on replicating the taste experience of their alcoholic counter parts, such as Lucky Saint.

Since then, we’ve seen a shift to more emotive branding where the play is on the experience of consumption; Clean Co and their ‘Cheeky Luxe’ positioning, Caleño on the ‘Joy of not drinking’ and Crossip who elevate taste to the ‘Ultimate Sensory Experience’. Even beer is on it with Days who stand for ‘more beer, not less’. These brands have helped bring an energy and positive emotive spin to the category, shifts away from the functional have helped drive market growth.

We also can’t ignore the alcohol giants; Diageo, Pernod Ricard, Heineken and Carlsberg. The zeroification of established brands is a separate conversation entirely. What they have done is made LoNo accessible and understandable to a mass audience. Afterall the idea of a 0% spirit can be much more challenging to understand than a 0% Gin . However, this approach whilst currently commercially successful lacks the depth and meaning to a consumer with a fundamental different need state to the brands core audience. How long can they continue?

The category is still in its infancy, with plenty of head room to grow and a consumer base shifting from those seeking a purely alcohol-free drink to those looking for a flavour experience. But with that commercial opportunity comes increasing challenges. As we see more and more LoNo products hit our shelves and bars down the local, how much more space is there in what seems to be an ever-crowded category?

The brands that will thrive are those that stay ahead of the curve, anticipating shifts in consumer preferences and staying attuned to emerging trends. They need to strategically invest in core brand strategies to build a distinct identity that resonates with consumers on a deeper level. For the independents the opportunity for them is to continuously reposition with the times; for the category giants it’s a tougher choice, risk a re-position of an established brand or invest in new?


Richard Colson 

Client Partner