The Sober Shift: A New Era for Australia’s Drinks Industry
Australia is witnessing a significant transformation in its drinking habits, with a notable decline in alcohol consumption across key markets. This shift has prompted the drinks industry to rethink its strategies and embrace innovation, particularly in the low and no alcohol (NoLo) sector. As younger consumers drink less and traditional growth drivers face challenges, the industry is finding new opportunities in this evolving landscape.
Retail Reset Underway
Endeavour Group, one of Australia’s largest alcohol retailers, is already adapting to these changes. Its CEO, Jayne Hrdlicka, has emphasized the need for businesses to innovate in response to the trend of younger people drinking less. The company is adjusting its product mix and pricing strategy to align with the growing demand for moderation-focused options. Hrdlicka has acknowledged that the market has fundamentally changed, with Australians becoming more selective about their choices.
Treasury Invests into the Future
Treasury Wine Estates, the owner of Penfolds, is also navigating this shift. Facing declining demand in key markets, the company is investing heavily in NoLo beverages. A $15 million commitment has been made to a dedicated NoLo production facility in the Barossa, targeting health-conscious consumers and addressing falling consumption in traditional wine categories. Treasury executives have recognized that flavor has historically been a barrier in the NoLo category, but they are working to overcome this challenge through advanced technology.
New Entrants Build into the Shift
While established players adapt, a new wave of Australian companies is emerging around the NoLo trend. East Forged, a Brisbane-based company, is producing nitrogen-infused cold brew tea designed to compete with beer and wine in social settings. After winning ‘Best Drink Innovation’ at the World Food Innovation Awards, the company is scaling with government backing and Asian investment. Co-founder Tania Stacey highlighted that the shift is not just about removing alcohol but filling a gap that has existed for years.
Specialists Rebuild Wine Itself
In the wine sector, innovation is happening at the technical edge. Aaron Milne, a Sunraysia-based winemaker, is part of a small group globally who have built and operate advanced dealcoholisation systems. Unlike most producers, he controls the full process, from base wine through to rebuilding structure and flavor once alcohol is removed. Milne emphasized that non-alcoholic wine has historically struggled due to the loss of body, texture, and balance, but new systems are allowing producers to create drier, more structured wines that can sit alongside food.
The Future of Drinking
The NoLo movement is not just about replacing traditional alcohol but expanding the category to capture consumers who are moderating rather than exiting entirely. This shift reflects a broader change in drinking behavior, with younger people drinking less, older Australians being advised to cut back, and many seeking a better balance. Companies like East Forged are seeing strong growth in Australia, particularly through direct-to-consumer channels, as consumers seek out premium non-alcoholic options.
Conclusion
As the drinks industry continues to evolve, the focus on NoLo beverages presents both challenges and opportunities. From established players like Endeavour Group and Treasury Wine Estates to new entrants like East Forged, the industry is adapting to meet the changing demands of consumers. With advancements in technology and a growing emphasis on flavor and quality, the NoLo sector is poised for continued growth and innovation. This shift not only reshapes the industry but also reflects a broader cultural change in how Australians approach drinking.
