How low and no is reshaping the on-trade

British consumers are moderating, rather than giving up alcohol entirely, and while this behaviour is not having an impact on how often they go out, it does increasingly affect where they go. Chris Losh reports.

Such are the key findings from this year’s KAM Market report into the low and no drinking space, which suggests that on-trade venues, in particular, are missing out on millions of pounds of lost revenue and need to wake up and smell the non-alcoholic espresso martini.

Five years of analysis have confirmed what anyone who makes or sells drinks has increasingly seen in their own till receipts: that UK consumers are consuming less alcohol than they used to, and per-capita consumption is falling every year.

While the number of teetotallers has remained steady, the number of UK adults consuming 15 or more units per week has dropped 8% since 2021, with the biggest behaviour change seen in those over 55.

The rise of conscious drinking

According to the KAM report, 76% of British drinkers are ‘actively moderating’ their consumption. The report describes this as a ‘continued cultural shift’ towards conscious drinking.

“This duality,” the report continues, “with high numbers both consuming alcohol and moderating indicates that people aren’t abandoning alcohol, but are approaching it with more intent… Brands that support more flexible, mindful drinking behaviours will be best positioned to stay relevant.”

Alcohol consumption is at its lowest among those aged under 35, which is particularly significant for the on-trade since they are also the age group who go out the most. For this market, while most Gen Z are still not removing alcohol entirely from their repertoire, they definitely have a different relationship with it from previous generations, particularly Gen X and Boomers.

“Alcohol is losing its default status,” says Katie Jenkins, marketing director at KAM. “Moderation is no longer about saying no, it’s about no longer needing to say yes.”

The sweet spot time-wise for alcohol-free drinks consumption is early afternoon – 12-1pm – and early evening – 6-8pm, with a final flourish towards last orders for consumers who want to stay out socialising, but no longer want to drink alcohol.

The KAM report concludes that, far from being a buzzkill, AF drinks can be good for the hospitality business, since they prolong nights out for people who might otherwise feel they have drunk enough and go home.

Failing to meet expectations

While the data suggests a real opportunity for the on-trade, most hospitality businesses are still struggling to make the most of it. 37% of UK adults have either left an on-trade venue early or been left disappointed as a result of poor low and no options. This is a big increase (+6%) on the 2024 figure and suggests not that fewer venues are offering AF drinks, but that consumers have higher expectations, and these expectations are not being met.

While bars and restaurants might not be looking to add dozens of new non-alc drinks to their list, there are some strong financial incentives for considering switching out some underperforming alcoholic lines for AF alternatives.

Currently, 24% of non-drinkers default to tap water, a missed opportunity which is costing UK hospitality venues an estimated £800m a year in lost sales.

But a strong non-alc offering can also be good for the wider business. In Edinburgh, Graeme Sutherland has a sizable range of AF drinks on offer. And while he says that they account for just 5% of sales in his Good Bros wine bar, their indirect impact is far greater.

“I can guarantee you if we didn’t have any no and low products in our fridges our trade would be down about 15%,’ he says. ‘[non-drinkers] are coming in with other people who are having a drink, and they’re here because they can all get what they want. We’re busier because of it.”

Meeting demand without losing loyalty

The Tao Group (owners of Hakkasan and Yauatcha) have had a similar experience. In 2022, one in 16 of the cocktails they sold was non-alcoholic. A decision to create a non-alcoholic ‘mirror’ menu of their alcoholic cocktail list has seen consumption skyrocket. Currently, one in six of each cocktail sold is alcohol-free.

All of which suggests that demand is there, and rather than feeling threatened by it, hospitality venues should concentrate instead on trying to meet it.

“For us and our venues, the shift towards moderation only benefits our customers, as we attract mixed groups looking for a wide offering,” says Ben Warren, commercial director of the activity-focused hospitality business Professionals at Play. “It’s embarrassing to only offer one [AF] option. The team are a lot more enthusiastic when they can offer a range of products.”

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