Riding the N.A. Wave
Not everything is always about beer, wine, and spirits. As the pandemic arrived and consumers have been riding the COVID 19 wave for nearly the past two years, non-alcoholic beverages have seen major growth in the beverage industry. Over the last year, “no/low alc” beverages have been flying off the shelves in off-premise accounts. According to NielsenIQ-measured channels, sales hit $3.1 billion for the 52 weeks that ended September 18, 2021. That is an increase of 10% ($291 million) vs. the previous year.
While low alc accounts for the majority of those dollars, the non-alc category is growing the fastest. Non-alc sales were up 33.2% ($331 million) compared to 8.1% for low alc is for the 52-week period.
Adam Farkas was named to his current position of Director of Sales, Non-Alcoholics in March of 2021 and jumped into his new position right about the same time that the explosion of the NA segment was happening. “I think to start with part of the reason that no one was talking about non-alcoholics is that they really weren’t relevant,” says Adam “In terms of sales in our company, the NA segment was really a drop in the bucket in terms of the overall sales numbers.”
The relevancy of NA’s has started to change. The numbers have increased a significant amount over the last few years and part of the reason has the increase of both energy drinks as well as “good for you” beverages. “Whether it has been water with alkaline added to it or energy drinks with Taurine, Guarana, Ginseng, and B Vitamins, the category and the products have changed for the better,” says Adam. “The great thing with this category right now from a sales standpoint, is that it is all new business. We’re not taking away from our existing business such as beer and wine, we’re taking away from the established soft drink companies and moving spending away from them.”
The question is why has this become such a big trend both nationally and for Heidelberg? “When Pat O’Sullivan, Heidelberg Chief Sales Officer, and the company decided to really invest into this category, it was like everything else that Heidelberg does,” says Adam. “They didn’t just dip their toes in the water, they went all in and got us new products that have really made a difference in the market. A lot of suppliers don’t want to be involved with the big soda companies or the big bulk warehouse distributers that don’t service the product at all. These suppliers want someone who can sell in programming stock and deliver mass amounts of retailers and then following up and making sure that the shelves are not only stocked but the product is also positioned to sell.”
Another bonus for the company when it comes to working with NA suppliers is the ability to be able to deliver to two states. “The fact that we can deliver and service both Ohio and Kentucky is huge,” says Adam. “We have gotten a lot of positive feedback about being able to cover multiple states without the suppliers having to deal with large amounts of distributors. The suppliers can cover every county in Ohio and Kentucky with just one call.”
One of the challenges for the NA team is covering both states to make sure that Heidelberg lives up to the expectations that have been set by the other sales teams over the years. Not all beer, wine and spirits products are available in all markets in both states. Many of the NA products are statewide in both Ohio and Kentucky and that is where communication for Adam and his team is key. “It is a lot of conversation on the phone and email and working with my brand ambassadors in each of the markets,” Adam says. “It can be tough when you’re spread out over two different states, but everyone involved has done such a fantastic job to make sure that all of us are always aware of what is happening and that we are all pulling in the same direction.”
There is no reason to think this trend is going to slow down anytime soon. The NA market is not just getting bigger in the US but worldwide. Fior Markets, a market research company expects the global non-alcoholic beverage market to grown from $923 million (in 2020) to $1.7 trillion by 2028. As the explosion for non-alcoholics continues to grow, Heidelberg continues to invest in the category and expected to grow in both Ohio and Kentucky with the market.