Scottish distillers look to teetotallers with no-alcohol tipples

The idea of a quaffing a distilled “spirit” containing little or no alcohol sounds almost sacrilegious in Scotland, a land famous for hard drinking and potent whiskies. 

But single malts and boutique gins from Scotland’s distilleries are increasingly sharing shelf space in UK supermarkets and bars with alternative low and no-alcohol spirits aimed at a growing population of teetotal and moderate drinkers. 

The growing demand for low and no-alcohol options poses a particular opportunity for Scotland’s powerful distilling sector, which contributes nearly £2bn a year to the Scottish economy.

“There’s a whole host of these kind of brands coming out,” said Darren Blackburn, head of beverage operations for Scottish hospitality chain G1, which plans in coming months to introduce a dedicated low and no-alcohol section in all its drinks lists. 

“We have an obligation to the people who don’t drink,” said Mr Blackburn, who himself gave up alcohol 10 months ago, a move he said left him happier, more productive and financially better off. 

A study by IWSR Drinks Market Analysis this year found that 53 per cent of UK consumers were trying to reduce their alcohol consumption. Nearly two-thirds of those aged between 25 and 34 — the age group with highest alcohol consumption — were trying to cut back. 

In response, restaurants, bars and retailers across the UK are moving to offer premium spirits that contain little or no alcohol but have relatively complex flavours derived from a wide variety of plants, or “botanicals”.

While sales of these drinks are still tiny compared with the total UK beverage alcohol market of €41.5bn, IWSR forecasts that sales of “low/no” spirits will grow at a compound annual rate of 80 per cent by volume between 2018 and 2022, compared with growth of just 1.2 per cent for spirits as a whole.

Altogether, UK sales of low and no-alcohol drinks — including beers, wines and ciders — were worth nearly €297m in 2018, up 34 per cent on the year before, IWSR said.

James Withers, chief executive of industry and government body Scotland Food & Drink, said interest in health and wellness was driving demand for premium non-alcohol drinks. 

“If you had said five years ago that you’d be buying a bottle of non-alcoholic spirit for £28 . . . you would have said you were crazy, but I think there’s real room in the market for it now,” Mr Withers said. 

Supermarket chain J Sainsbury now stocks seven low and no-alcohol alternatives to spirits, up from two last year, and expects pre-Christmas sales to be 30 per cent higher. 

“We’re seeing a noticeable increase in customers exploring this area,” said Elizabeth Newman, Sainsbury’s manager for beers, wines and spirits. 

Scotland’s strength in traditional distilling gives producers of the new spirits a potential edge, said Bill Garnock, co-founder of Fife-based no-alcohol spirit Feragaia. Mr Garnock said he first considered making whisky or gin, but decided years of new distillery investment had “saturated” the sector. 

Bill Garnock, co-founder of Feragaia - an alcohol-free distilled spirit made from land and sea botanicals, drinking his own product. Photographed in The Little Chartoom, Leith Walk, Edinburgh, Scotland, 30th October 2019.
Bill Garnock, co-founder of Feragaia, drinking his own product © Jeremy Sutton-Hibbert/FT

Seeing many drinkers abstain for a ‘dry January’ last year, Mr Garnock sensed an opportunity. “Scotland has the platform to create the world’s best top-shelf spirits and . . . more and more people looking for a different drink option,” he said. 

Distilled under contract using botanicals including seaweed and chamomile, Feragaia is an complex-flavoured amber liquid designed to be served with tonic or ginger ale or straight on a block of ice with an orange slice garnish. 

Using Feragaia - an alcohol-free distilled spirit made from land and sea botanicals - in drinks at The Little Chartroom restaurant, Leith Walk, Edinburgh, Scotland, 30th October 2019.
Feragaia is an alcohol-free drink made from land and sea botanicals, pictured at The Little Chartroom restaurant, Edinburgh © Jeremy Sutton-Hibbert/FT

International distilling groups are keen to tap the emerging market. Diageo in August increased its holding in four-year-old no-alcohol spirit Seedlip to a majority stake. Pernod Ricard in July launched a zero alcohol spirit Celtic Soul with a promise of a “smooth blend of sweet vanilla, spices and oak cask wood flavours” clearly intended to appeal to whisky tipplers. 

Scottish drinks group William Grant & Sons aims to replicate the experience of a premium gin with its new ultra-low alcohol spirit, Atopia, launched in June. 

Darren Blackburn - Head of Beverage Operations for the G1 Group, mixes two drinks using Atopia - an ultra-low alcohol content spirit, in The Bothy Restaurant, Glasgow, Scotland, 31st October 2019.
Atopia has an ultra-low alcohol content © Jeremy Sutton-Hibbert/FT

The drink’s 0.5 per cent alcohol by volume means it will not appeal to teetotallers, but Tom Stannard, global marketing manager for innovation, said there was “massive potential” in drinkers seeking to moderate their alcohol intake. 

Mr Stannard said William Grant’s master distiller had decided a small amount of alcohol was needed to blend the spirit’s flavours coherently — and high repurchase rates for Atopia had proved moderate drinkers would add such a drink to their repertoire. 

Some consumers remain reluctant to pay well over £20-a-bottle for a drink with little or no alcohol, not least since it is not subject to the hefty taxes that the UK levies on traditional spirits. 

But Mr Stannard said making an ultra-low alcohol spirit was expensive. “The reality is that it costs me more to make Atopia than it would to make another white spirit,” he said. 

It is still unclear whether the new “low and no” brands will ever win the kind of loyalty and affection enjoyed by premium whiskies or gins. Mr Blackburn at G1 said all those he had sampled still lacked the weight and depth that alcohol could bring to a drink. 

“They are all quite light, watery in essence,” he said. “The person that cracks that — and it hasn’t been cracked yet by anything I’ve tried — will be on a winner.”


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