Heineken USA’s CMO says non-alcoholic beer competition will continue to grow this year

With the last crumbs of holiday cookies polished off and the recycling full of New Year’s Eve libations taken out, it’s officially resolution season. That means a spike in gym memberships (unless you’re Equinox) and a major boost in sales for non-alcoholic (NA) beverages as consumers commit to Dry January.

It’s an especially big season for NA beer, which controlled 85.3% of the $395 million US consumers spent on NA beverages between August 2021–August 2022, per NielsenIQ.

“[Beer people] want to win Cinco de Mayo, we want to win Fourth of July, we want to win Memorial Day weekend. In the zero-beer world, you want to win January,” Heineken USA CMO Jonnie Cahill told Retail Brew.

Heineken’s first NA offering, Heineken 0.0, was introduced in global markets in 2017 and made its US debut in January 2019. In 2020, the beer giant announced it was investing $50 million annually in the segment. But it hasn’t all been smooth-sailing: “I think people thought maybe we lost our mind,” Cahill told us.

“We knew the megatrend was with us in terms of non-alcoholic beer, but we also recognized in the US, it was very underdeveloped as a segment,” he said. “So going back in time, now it seems obvious, like how could we miss? But at the time, it was still a brave move.”

• The category has “definitely grown up,” Cahill said. Anheuser-Busch introduced its own NA Budweiser iteration, Budweiser Zero, in 2020, and said it aims to make 20% of its global beer volume low- and no-alc by 2025. This past November, Keurig Dr Pepper (KDP) took a minority stake in NA beer maker Athletic Brewing Company, as part of its $75 million funding round.

Now, Heineken is looking to push the category further, with new products and strategies in the works as NA bevs gear up for another year of growth.

Brewing a plan: After working to “really establish” its first NA option, Heineken is gearing up to add a second to the mix in the new year, Cahill said. In March, he said the company will introduce a NA version of its second largest brand, Dos Equis, with Dos Equis Zero Lime & Salt.

Sampling will also be a big push in 2023, he said, as trial remains the top roadblock for Heineken 0.0’s growth (Cahill said 39% of those who try it end up buying it). It’ll invest more in advertising this year, particularly in TV, to help drive this.

“We don’t see [NA beer] as something we were doing for a couple of years; we see it as a sort of a long-term opportunity for the business,” he said.

Hop to it: The NA beer category as a whole will likely continue to barrel ahead, too, with the recent entries of bev giants like KDP continuing to push the category forward, Cahill said.

“KDP is a very impressive organization,” he said. “They’re excellent brand builders. They can only be good for the category if people like that are investing in it, and it will drive category health.”

• He predicted more big brands will likely try their hand at NA beer, and those already in the category will likely experiment with new flavors and varieties beyond lagers.

As we found last year, NA brands have also worked to claim dedicated shelf space in retail. For Heineken specifically, Cahill said the way its 0.0 product is merchandised is split evenly between being alongside its alcoholic products or in its own NA section.

• However, he said retail partners like Total Wine & More have a “fully carved out segment” for NA, and he predicts more stores will start to think that way and prioritize the category this year.
• Plus, there’s already been a major retail move in the space this year: Alcohol e-commerce giant Drizly added its first NA beverage retailer, Boisson, on its platform last week.

“It’s an accretive category. It’s not, ‘I’m selling this 12-pack instead of that 12-pack.’ You’re selling both,” he said. “And I think that our retail partners see that now, and see the long-term play in the category.”