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Why Coca-Colas’s Newest Offerings Look a Lot Like Craft Beer

February 14, 2019

By Diana Hubbell, February 14, 2019

Regardless of whether you’ve been a designated driver, trying to stave off a hangover, or simply abstaining from alcohol altogether, your options in most bars have long remained limited. At best, there might have been a token, tasteless non-alcoholic beer or a sickly, maraschino-topped Shirley Temple on the menu. Chances are high you would have gone to most people’s safe option: quietly ordering a soft drink or a club soda with lime.

“We’d talk to consumers and ask them if that was what they would be drinking in an ideal world and the answer was almost uniformly no,” says Sabrina Tandon, part of Coca-Cola’s Venturing & Emerging Brands (VEB) unit. “The best line I heard was, ‘When I go out, I have a two-drink limit and then I’m done. When I switch, I feel like I’ve left the party. If I could have a choice that felt closer to that alcoholic beverage, I would just feel so much better.’”

Enter BAR NØNE, a line of beverages from Tandon and the team at Coca-Cola designed to loosely approximate drinks like dry hard cider and gingery Moscow Mules. Unlike Coke, Pepsi, or other soft drinks, which can leave you jittery at the end of the night from all the caffeine and corn syrup, these beverages claim to err on the tangy side rather than sweet. They still pack a reasonable dose of cane sugar, but the goal is to be better suited to slowly sipping over the course of an evening in a bar.

In a way, it’s surprising that it’s taken this long for more non-alcoholic options to crop up. It may feel like everyone’s out getting sloshed when you’re teetotalling, but studies have consistently shown that those numbers are lower than you may think. Thirty percent of American adults don’t consume alcohol at all and a sizeable percentage of those only have a few drinks a week. If anything, that number is expected to drop, as wellness-conscious Gen Z-ers continue to drag down overall alcohol consumption rates.

Slowly, breweries and corporations are waking up to how much money there is to be made by catering to this underserved market. Multiple booze-free spaces with all the trappings and vibes of traditional bars are slated to open in New York within the next year. Meanwhile, microbreweries in the U.S. are getting smarter about producing non-alcoholic beers that mimic the taste of their higher ABV counterparts, while other companies are offering alternatives like hop water or kombucha. All of the big breweries including Heineken, Molson Coors, and Anheuser-Busch are muscling into the game, too.  

Non-alcoholic beers were really the first to come into the market and we wanted to see how we could expand that in a grassroots kind of way.”

“Non-alcoholic beers were really the first to come into the market and we wanted to see how we could expand that in a grassroots kind of way,” Tandon says. “I personally had an idea of something that was lacking in my own life, which was solving [the] ‘what to drink when you’re not drinking’ dilemma.”

Given that the non-alcoholic beer and wine market wracked up $16 billion in 2017, while sales of Coca-Cola and Pepsi have been largely declining in the U.S. for more than a decade, it’s not exactly a  surprising move. It also makes sense that the brown bottles of BAR NØNE closely resemble your average six-pack of beer.

“They’re intentionally packaged like alcohol, because many people told us that they didn’t want to call attention to their decision not to drink,” Tandon says. The company also plans to strategically place the bottles next to beers and other alcoholic beverages in liquor stores. “It really does best next to alcohol, since it’s designed to be enjoyed on the same occasion, just in a different way.”

If it feels like Coca-Cola is borrowing a page from the brewers’ playbook, that’s hardly an accident, and it’s not the only time Big Soda has done so. Last month, Pepsi announced that it would borrow the same nitro technology often used to imbue stouts with their velvety mouthfeel for the first “nitro soda.”

“We set out with the idea of completely reimagining cola,” says Todd Kaplan, VP of marketing at Pepsi. “We were inspired by how beverage categories like beer and coffee utilized nitrogen to do just that, so it became a logical path to explore.”

It’s also a canny marketing move, albeit for different reasons than Coca-Cola’s. While neither product aims to stand in for a cold one, both nod to strategies employed by the $34 billion U.S. beer market. Although both Coca-Cola and Pepsi’s core products have remained largely the same for decades, the dueling giants have a long history of finding inventive strategies to remain competitive. Past maneuvers have included trying to edge into the coffee market as a breakfast beverage, while in recent years the two have aggressively targeted developing nations as U.S. consumers pivot away from sodas.

Whether or not consumers develop a taste for these new products remains to be seen, but one thing is certain: the cultural reach of the beer industry has never been stronger.

ZX Ventures, a division within AB InBev, is an investor in October
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