Heineken has a plan to make Americans love beer again

Article Image

Americans are drinking less beer. Heineken has a plan to fix that.Over the past four years, American beer consumption slid 5%, according to research f...

Posted: Apr 16, 2019 3:43 AM

Americans are drinking less beer. Heineken has a plan to fix that.

Over the past four years, American beer consumption slid 5%, according to research firm Mintel. A quarter of US beer drinkers said in August that they consume less beer now than they did a year ago, Mintel added.

American drinkers are more focused on health and wellness, but they also want quality beer, wine and liquor that tastes good. Some are swapping out beer for pricey liquor: Spirits stole market share from beer and wine for the ninth straight year in 2018, with the more expensive liquors leading the way. Those who are still drinking beer are reaching for premium options.

Heineken thinks its zero alcohol product, Heineken 0.0, will appeal to people who value health and flavor. The company hopes the new brew, which took about five years to develop, will win people over.

"Making a brilliant non-alcoholic beer is really hard," Jonnie Cahill, Heineken USA's chief marketing officer, told CNN Business. When you remove alcohol from beer, you tend to remove flavor and aroma with it. But with 0.0 "we've cracked the technology."

The company wants to stop people from ditching beer and keep Heineken top of mind for consumers. The non-alcoholic product is designed to appeal to people who love how beer tastes, and sometimes crave it at times when they don't want a buzz. With 0.0, Heineken wants to make non-alocholic beer a treat, rather than a lesser alternative to regular beer.

Non-alcoholic beer is just a small sliver of America's $112 billion beer market. But Heineken, which launched 0.0 in the United States earlier this year, is betting the zero alcohol sector will grow.

A post-Peloton treat

The 155-year old Dutch beer company first launched Heineken 0.0 in the Netherlands and Germany in 2017, where it has attracted a "younger, more urban, more premium demographic," said Cahill. "Can you see this inhabiting an apartment where there's a Peloton? Absolutely."

In the past, non-alcoholic beer has been "a distress category," Cahill said. "It's often been about what you couldn't do — I can't have a beer because I'm driving, I can't have a beer because I'm on medication, I can't have a beer because I have a big day tomorrow. Our belief is, well, now you can."

By offering consumers a new option, the product can help give Heineken a competitive edge. "The beer market is extremely crowded," said Caleb Bryant, senior beverage analyst for Mintel. "If you can carve out that niche by having a non-alcoholic option, it gives you a leg up."

It's also strengthening the beer sector overall, Cahill added. "The more you can invite people to stay in your category, the better it is for all of us," he said.

Plus, 0.0 is helping Heineken boost its brand.

Big in Europe

Though 0.0 has only been on the market for a few years in Europe, its already giving Heineken a boost.

Internationally, the product has been "just flying," Cahill said. In the United Kingdom, Heineken 0.0 makes up 5% of Heineken sales. In Spain, that figure is 7%, and in Russia it's 20%, according to Cahill.

During the company's most recent earnings report, Heineken CEO Jean-François van Boxmeer said that "the ongoing success of Heineken 0.0" helped deliver the strongest growth by volume to the Heineken brand in over a decade.

Heineken's not the only big company jumping on Europe's non-alcoholic beer trend. Anheuser-Busch, Asahi and Guinness all sell non-alcoholic beers internationally.

For the most part, those companies have stayed away from the American market, where adoption is much lower. According to the Beer Institute, a group that represents the beer industry, non-alcoholic beer represented about 0.3% of the US beer supply in 2018.

Making it in America

Cahill said that the American non-alcoholic beer space is promising because in the United States, health and wellness trends are prevalent. Heineken decided that January was the right time to bring 0.0 to the United States.

Americans may well be warming to the idea of a premium non-alcoholic beer. In the first three months of 2019, sales of non-alcoholic beer grew 6.6% compared to the same period last year, according to Nielsen.

Although US consumers drink far less zero-alcohol beer than their European counterparts, "there's a big opportunity for explosion of non-alcoholic beer" in the United States, said Bryant.

American brewers that make zero-alcohol beer, including Wellbeing Brewing, Surreal Brewing and Athletic Brewing, have been springing up across the country in recent years. This month, Pabst Blue Ribbon announced the launch of its non-alcoholic brew, noting in a release that "the next generation of America" has a "greater focus on health and wellness."

Bryant said that the "it's really going to boil down to product development." If non-alcoholic beer is truly comparable to craft beer in terms of taste, American consumers may well go for it. If not, the trend could fizzle out.

Oregon Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 4474

Reported Deaths: 159
CountyConfirmedDeaths
Multnomah122462
Marion101126
Washington75518
Clackamas33312
Deschutes1330
Umatilla1243
Linn1219
Polk10012
Lane803
Yamhill757
Jackson690
Benton575
Jefferson460
Clatsop450
Klamath440
Malheur320
Coos320
Wasco291
Douglas280
Hood River280
Lincoln230
Josephine231
Columbia160
Morrow120
Curry70
Crook70
Union60
Tillamook60
Wallowa20
Lake20
Sherman10
Harney10
Grant10
Baker10
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 122168

Reported Deaths: 4444
CountyConfirmedDeaths
Los Angeles596922532
Riverside8303345
San Diego7798283
Orange6783165
San Bernardino5650209
Alameda364197
Santa Clara2850144
San Francisco264443
Imperial249330
Kern246245
San Mateo224484
Tulare208392
Fresno194437
Santa Barbara171414
Contra Costa154738
Sacramento149058
Ventura119035
Kings11876
San Joaquin102436
Stanislaus79230
Monterey62110
Sonoma5934
Solano55922
Marin52517
Merced3107
San Luis Obispo2881
Placer2599
Santa Cruz2192
Yolo21624
Madera1293
Napa1263
Humboldt1044
El Dorado980
San Benito962
Butte601
Nevada491
Sutter482
Del Norte470
Shasta404
Mono371
Mendocino330
Yuba311
Lake300
Inyo201
Glenn170
Calaveras160
Mariposa161
Amador100
Siskiyou90
Colusa70
Tehama61
Tuolumne50
Lassen50
Plumas40
Alpine20
Sierra10
Trinity10
Unassigned00
Medford
Few Clouds
74° wxIcon
Hi: 76° Lo: 49°
Feels Like: 74°
Brookings
Overcast
52° wxIcon
Hi: 55° Lo: 45°
Feels Like: 52°
Crater Lake
Clear
74° wxIcon
Hi: 70° Lo: 41°
Feels Like: 74°
Grants Pass
72° wxIcon
Hi: 72° Lo: 48°
Feels Like: 72°
Klamath Falls
Clear
74° wxIcon
Hi: 74° Lo: 38°
Feels Like: 74°
Big changes into the weekend
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events