According to Beer Canada, the non-alcoholic beer market (defined as beer containing less than 0.5 per cent alcohol by volume) has grown by an estimated 30 per cent, based on volume, over the past three years. Beer Canada estimates that 584,000 hectolitres of non-alcoholic beer were sold in Canada in 2022, representing less than three per cent of total beer sales by volume. This is a small market segment, but some breweries in Canada are seeing growing success with their non-alcoholic beer lines and other Canadian companies are leading global innovation in the production of non-alcoholic beer.
The fastest-growing market segment
Kristen and Mike Norris founded Designated Drinks in December 2021. The online store now features Canada’s largest selection of non-alcoholic beers, with over 60 Canadian-made brands. “I lived through the craft beer craze,” said Mike. “I developed a taste for it.” Mike eventually gave up alcohol, but after trying a non-alcoholic craft beer, he realized he could have all of the flavour with none of the alcohol. With a background in e-commerce, Mike and Kristen created Designated Drinks to provide Canadians with the ability to purchase a wide selection of non-alcoholic beers all in one place.
“Our Party Pack is our best seller,” said Mike. “It features 24 different beers and is a great entry point for people exploring non-alcoholic beer. Even long-time non-alcoholic beer drinkers come back to it to refresh their interest in different beers. I thought customers would be like me [people who don’t drink], but 90 per cent of people we sell to drink beer and use non-alcoholic beer to supplement their lifestyle.”
I thought customers would be like me [people who don’t drink], but 90 per cent of people we sell to drink beer and use non-alcoholic beer to supplement their lifestyle.
Mike Norris, Designated Drinks
Graham Sherman, co-founder of Calgary’s Tool Shed Brewing, agrees. “We have businesspeople come to our taproom with clients,” said Sherman. “Their employers have policies that don’t allow them to go back to work if they’ve had a drink, so having a non-alcoholic option allows our customers to meet with their client over a beer, but still go back to work.”
Tool Shed offers two beers that are non-alcoholic versions of existing brands. Zero People Skills and Zero Red Rage are the non-alcoholic analogues of People Skills, a light beer in the style of cream ale, and Red Rage, a malty red ale. These two Zero beers are the brewery’s fastest growing brands, to the point where demand often outstripped supply until the brewery was able to adjust forecasts and increase production.
Ontario’s Collective Arts Brewing now offers three non-alcoholic beers: an IPA, a hazy pale ale and a stout. “Our consumers requested it,” said Matt Johnston, CEO and co-founder. “The growth is great. It’s still a small base, but there is a lot of demand. It is an interesting and evolving challenge.” On the technical side, flavourful non-alcoholic beer was a new challenge for Collective Arts’ brewers and on the sales side, Johnston said, “There is a lot of learning about new distribution channels that open up with products that can be sold anywhere.”
Calgary’s Village Brewery has three non-alcoholic beers (pale ale, blonde and stout) sold under the sibling brand CRFT, with a small logo showing that the beer is made by Village. “Liquor store retail and grocery chains are completely different sales channels,” said Matt Livingstone, retail channel manager. “The grocery side is tough and not as agile. Most plan a year out and if you’re not picked, you have to wait until next year to try again.”
However, Livingstone says shelf space has grown to at least four feet at most grocery stores, so the opportunity is large. In the meantime, liquor retail demand for non-alcoholic beer has grown with category managers now actively monitoring the market and making buying decisions, rather than just putting whatever is available onto the shelves.
Village’s Jackson Stuart, brand manager, says the brewery chose to brand their non-alcoholic beer under a sibling brand to position it better for grocery. “Customers in grocery are not necessarily familiar with Village, so we didn’t want customers to drink our non-alcoholic beer first, then get confused by our alcoholic beers,” said Stuart. Keeping the brands separate is cleaner, though putting the Village logo on the CRFT cans shows consumers that it is a high-quality product.
Originally, Village’s first non-alcoholic beer was released under Village’s regular branding. However, when sales of the beer exploded beyond expectations, they found it necessary to put more work into the brand and the decision was made to separate it. The separate brand gives Village more runway for registering trademarks, and to create branding and packaging with grocery stores in mind.
Canadian companies leading the innovation
Canadian companies have been a major help when it comes to helping brewers achieve their non-alcoholic goals. New low alcohol producing yeast strains are being marketed by Montreal’s Lallemand and Guelph, Ont.’s Escarpment Laboratories, while Charlottetown’s DME Process Systems Ltd. is making membrane filtration systems which remove alcohol.
Lallemand’s LalBrew LoNa is a traditional yeast strain (Saccharomyces cerevisiae) that has been bred (non-GMO) using innovative Canadian technologies to be maltose-negative. As a result, the yeast will not ferment disaccharides (maltose), creating alcohol only from monosaccharides (glucose and fructose) in the beer. It is the first commercially available maltose-negative Saccharomyces cerevisiae strain in the world.
Brewers using LalBrew LoNa apply mashing techniques to create the perfect ratios of sugars in the wort, ensuring the correct final alcohol content, but the yeast will create flavourful esters and fermentation by-products consumers expect from fermented beer. The yeast was also bred from a strain that does not produce hydrogen sulphide, ensuring that LoNa produces clean flavours.
Escarpment’s solution, dubbed NAY (non-alcoholic yeast), is a species of Hanseniaspora uvarum yeast, which Escarpment isolated from spontaneously fermenting crabapples in its hometown of Guelph. This strain was selected by tasters after fermentation trials with all of the laboratory’s maltose-negative strains. Of interest to breweries making hoppy beers, Escarpment says NAY has some biotransformative abilities, bringing forth floral notes during fermentation.
Disaccharides remain in the finished beer with all maltose-negative yeast strains, including LalBrew LoNa and Escarpment’s NAY. Therefore, the beer needs to be pasteurized to reduce the risk of fermentation from diastatic microbes or hop creep. Also, these beers should not be served on draft since the draft lines can harbour diastatic microbes.
DME’s membrane filtration system, on the other hand, is a newly designed system that takes fully-fermented beer and removes the alcohol. So far, three systems have been installed in Canada, one in the United States and two in Australia. The benefit of DME’s system is that brewers make beer as they always have, using all the normal ingredients and recipes they are familiar with. There is no risk of cross-contamination or diastaticus since the beer is fully fermented, so pasteurization is not needed and all of the esters created by fermentation are present.
At Tool Shed, Sherman thinks about the path that led them to where they are today, with non-alcoholic brands forming a very substantial portion of sales. “At our core, we love using local barley and showcasing that flavour,” he said. “Breweries from around the world buy Canadian barley and non-alcoholic beer lets us take that barley to new audiences. The alcohol content doesn’t enter into the conversation.”
“Demand keeps growing,” said Johnston. “I was a skeptic, but now I’m a believer. You can make great tasting non-alcoholic beer. Craft beer drinkers are looking for great tasting products. That’s what matters.”
