Zero hero? Heineken wants no-alcohol beer to rival Coke in Singapore following Europe sales boom

Heineken 0.0 is made with normal beer ingredients (water, malted barley, hop extract) and brewed with Heineken’s unique A-yeast, but the alcohol is removed ‘gently’​ in a ‘natural process’​.

“[Our] unique recipe [makes] for Heineken 0.0’s distinct balanced taste, and each 330ml bottle contains only 69 calories,”​ Andy Hewson, Managing Director of Asia Pacific Breweries Singapore (APBS) told FoodNavigator-Asia. ​APBS is a wholly-owned subsidiary of the Heineken Group, and and operates its local brewery in Singapore.

A 330ml bottle of Heineken Original contains some 138 calories, and a standard Coca-Cola around 140 calories, which means that Heineken 0.0 contains roughly half the calories of each of these.

Hewson added that Heineken 0.0 is driven by four key consumer trends: Health-consciousness, Increasingly busy lifestyles, a demand for high quality products, and a huge overlap between beer drinkers and consumers who drink soft drinks

“[Amongst] Singaporean beer drinkers aged 25 to 44 years old, an estimated 73% also drink non-alcoholic beverages),”​ he said.

The non-alcoholic beer was first introduced in Singapore last year as part of the Formula 1 Singapore Airlines Grand Prix, and later on market tested in Shell petrol stations nationwide. After receiving encouraging response from local consumers, it was officially launched in the country last month.

“In 2018, Heineken achieved its strongest volume growth globally in over a decade of 7% year-on-year, [and this was] fuelled by the success of Heineken 0.0,”​ said Hewson.

“The LNA category is booming in Europe and our ambition is to replicate this success in Singapore and in the region.”​

According to a Global Market Insights report, the global non-alcoholic beer market is projected to surpass US$25bn by 2024.

Focus on LNA​

APBS has committed 20% of its total marketing budget into growing the LNA category in Singapore this year, with Heineken 0.0 as its flagship product for this.

“Our ambition is to grow the total Heineken brand in Singapore by 5% to 10% year-on-year in the next three to five years, strongly driven by Heineken 0.0,”​ said Hewson.

“In the long term, we expect the LNA category to outperform the success that the cider category has achieved in the past 5 years.”​

Apart from traditional trade channels where beer can be found such as supermarkets, bars and clubs, Heineken 0.0 is also expected to be found in less conventional locations like salad bars, gyms and offices.

“Basically, anywhere you can find a Coke, we want you to be able to find a Heineken® 0.0 as well,”​ Hewson added.

Why Singapore?​

Within Asia, Singapore was selected by Heineken as the first market for launch due to what Hewson described as ‘massive opportunity for growth’​.

“Heineken is already a super strong brand in Singapore – we own nearly 50% of the premium beer segment locally,”​ he said.

“Amongst Singaporeans of legal drinking age and non-Muslims, a large portion doesn’t drink alcohol, [whereas some 73% of] beer drinkers also drink non-alcoholic beverages.​

“[There] is a significant overlap between both categories [and thus] a significant opportunity for us to tap into and grow [this] new segment. [So far], sales of Heineken 0.0 have been purely incremental with zero cannibalisation on Heineken Original [sales].”​

APBS will also invest SG$3.8mn (US$$2.8mn) into the installation of a de-alcoholiser in its brewery at Tuas, which is expected to materialise by Q3 this year, which will allow for local production of Heineken 0.0, which is currently still being brewed overseas.

“[This will] position Singapore as the supply hub for Heineken 0.0 and LNA beers in the region,”​ added Hewson.

Zero-alcohol regulations in Thailand​

In Thailand, the government is putting together a working group to examine the governance of beers within the LNA category​ being manufactured and produced by traditional beer breweries, such as Heineken 0.0.

Dr Nipon Chinanowet, Director of the Office of Alcohol Control Committee told The Nation​ that: “If it’s advertised as an alcohol-free malt beverage, there’s no problem, but if it’s advertised as an alcohol-free beer, we have to examine the intention and whether the advertising is breaking any law.”

​​Adding that the beer companies could be ‘taking advantage of a legal loophole’​, Dr Chinanowet said that at present these zero alcohol beverages were being registered as food items under the FDA, which allowed for far less restricted promotion as opposed to alcohol.