Non-alcoholic beers and cocktail mixers, which gained popularity during the days of Covid lockdown, have managed to carve out a niche space for themselves and are here to stay, show market trends.

In the pre-pandemic times, such drinks were restricted to bars, pubs and restaurants, but have now made their way into people’s homes, thanks to easy availability through online channels and also modern trade, given that these are certified by the Food Safety and Standards Authority of India (FSSAI).

The reason for the growing adoption of non-alcoholic drinks is that people are looking for low-sugar, low-calorie options, Vrinda Singhal, founder and CEO, Swizzle, told FE. “There is also FOMO (fear of missing out) because people do not want to miss out on the fun just because they don’t drink in a society where alcoholic beverages have become so common,” she said.

Coolberg, Heineken 0.0, manufactured by United Breweries, Bavaria, and Beck’s non-alcoholic beers, are some products that customers prefer, say companies.

Those who prefer drinks with higher alcohol content – typically whisky, vodka, rum or gin – have also started experimenting with their traditional mixes and are giving readymade cocktail mixers some space on their bar counters, along with the non-alcoholic beers.

No wonder then that manufacturers of non-alcoholic beers and cocktails are strengthening their supply chains, which is no longer restricted to the top six-eight cities. Jimmy’s Cocktails is expecting faster growth, banking on the high consumer demand from smaller towns and cities. The top six-eight cities form the bulk of the company’s revenues at 70%. “Cocktails have been trending in the bar for over a decade, and it is the only format which was not available at home because it is just hard to make, given its complexity and the number of ingredients required. This is why ready-to-drink mixers are growing fast as a category because people can either consume it as is or mix it with spirits,” Jimmy’s founder Ankur Bhatia said.

According to Bhatia, Jimmy’s, which was founded in 2019 – a few months before Covid-19 hit – has clocked `50 crore in revenue in the last three years and has seen a growth of 200% since last year. At the present run rate, the company hopes to close the next year at `100 crore, which Bhatia claims would make it the fastest-growing brand in four years.

“Our category saw more growth once Covid became better as people just wanted to meet everybody. Overall, if you see, the spirits numbers in India are growing rapidly, and because the spirits are growing, so are we,” he added.

Another such firm, Barbican, manufactures around eight different flavours of non-alcoholic beers and generated a revenue of `20 crore in FY22, 10% higher than the year before. Barbican India managing director Aamir Khan said his company will broadly continue growing at that rate but also introduce new products to meet the surging demand.

It’s not only startups and smaller ventures which are focusing on the non-alcoholic segment. Even large, organised players like Anheuser-Busch (AB) InBev – the makers of popular beer brands Budweiser and Corona – have also started offering such products and plan to grow this market. Vineet Sharma, vice-president, marketing, South Asia, AB InBev, said the non-alcoholic beer market in the country is still largely untapped. “Today, about 70% of India’s consumers who previously abstained from alcohol now have a viable alternative. We are confident this market will grow exponentially. One of our global smart drinking goals on empowering consumers through choice is to ensure that no or lower alcohol beer products make up at least 20% of our global beer volume by 2025,” he added.

Industry players say the economics works out the same for alcoholic as well as non-alcoholic products as the manufacturing costs and the selling prices don’t vary much.