NOLO gathers pace and space
No and low alcohol categories are proliferating in multiple channels and successfully competing for space, but execution remains conflicted, writes Laurie Wespes, CEO and Founder of Snooper.
As published in
There’s been some movement at the no and low alcohol (NOLO) category ‘station’ since we last discussed NOLO beer with National Liquor News readers in January last year. But some challenges remain.
First, the good news
There has been an increase in both NOLO range carried cross-category in the licensed channels, and new and increasing distribution of NOLO categories in non-licensed channels. In other words, more NOLO categories and products are becoming more readily available.
Moving into the on-premise
In 2021, 29 per cent and 20 per cent of surveyed consumers acknowledged having seen no or low alcohol beer and no or low alcohol spirits respectively when going out. The past year has seen the launch of bars dedicated to no alcohol products, such as Melbourne’s Brunswick Aces and the recently opened Dan Murphy’s Zero% craft bar in Hampton. Seadrift distillery has launched a ‘So-Bar’ in the middle of Brookvale’s brewery district on Sydney’s northern beaches.
Range proliferation in non-licensed channels
Supermarkets are increasing their NOLO ranges, with Woolworths now numbering more than 30 products across beer, wine and spirits. In just one brand example, eleven Naked Life cocktail SKUs were launched in late 2021 and these are ranged in supermarkets and in 500+ convenience stores across the country.
The growth of zero alcohol online pureplays has also continued. Alongside Sans Drinks now sits Craft Zero and Undrink, among others.
Increased range, space and display in the off-premise
In the off-premise, perhaps the heartland of NOLO categories, ranging has also continued at pace. In the past 12 months we have observed the introduction of many products, for instance, at least six nonalcohol spirits and RTDs, as well as countless non-alcoholic beers from a number of brands including Great Northern, Free Time, Tinnies, Pirate Life, Brewdog, and Nanny State, and the seemingly unstoppable Heaps Normal. This is naturally resulting in higher SKU counts. For instance, our Snoopers observed that several venues in SA had no NOLO beer offering in December 2020, but 12 months later had three brands and had 11-12 facings in January 2022.
Larger assortments offered and the increase in facings means we are seeing more space devoted to NOLO products.
More off-location floor displays are also being achieved for NOLO categories, with branded displays against occasions such as Dry July and as part of the regular promotional calendar as part of multicategory gondola ends and off-location displays, particularly in independents.
All of this activity is being positively reflected in the NOLO category’s share of sales. According to an IWSR study, NOLO volume increased by 2.9 per cent in 2020, and in fact outpaced the performance of regular alcohol, which recorded a volume decline of 1.4 per cent in the same year. Both Endeavour Group and Coles Liquor Group have seen NOLO category sales nearly double in a 12 month period. Nonalcoholic beer was the star performer at +47.1 per cent in grocery and +89.9 per cent in liquor channels.
The NOLO alcohol market in Australia is expected to grow by +16 per cent to 2024 and is currently valued at $94.9 million across grocery and liquor as consumers, particularly Generation Z and Millennials, continue to moderate alcohol consumption.
Executional challenges remain
There are conflicting opinions and executions on whether to block all NOLO products together or locate them with their respective categories.
Within beer, our Snoopers have observed stores beginning to range NOLO variants together rather than being ranged in a brand block next to their mid or full strength counterparts. Shopper research may be required to understand the decision tree in this regard – are shoppers looking for NOLO first, or the brand first?
At-fridge and at-shelf POS such as decals, wobblers and shelf stripping for navigation, whilst observed by our Snoopers, have not moved as fast as ranging and floor displays, particularly when compared to other categories such as seltzer. If retailers are not ranging all NOLO variants or categories together, highlighting the NOLO SKUs becomes even more important for shopper navigation, particularly for NOLO only brands that don’t have a full-strength brand ‘parent’.
“Larger assortments offered and the increase in facings means we are seeing more space devoted to NOLO products.”
NOLO is a sustainable trend not a fad. It’s still going through some executional growing pains in planogram management, navigation and supporting signage in the off-premise, but has improved markedly in ranging, space allocations and off-location displays, and moved meaningfully into a number of nonlicensed channels.
Proliferating SKUs create their own challenges, however, and require impact tracking pre and post range extension introductions, as well as range review discussions to ensure the category continues to bloom, rather than grow uncontrollably like the proverbial weeds.
1. Snooper data – assessment of 2000 store visits between August 2020 – April 2022 across national and independent off-premise banners
5. National Liquor News December 2021 edition
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