Though the thought of non-alcoholic drinks taking off might seem amusing to most of us, the reality is less far-fetched than you’d think. Speaking with Lyre’s Spirits Co. co-founder Mark Livings, we tried to find out more about this emerging category.
Lyre’s is one such product that is growing and servicing a rather different need. And much like how the demand for non-alcoholic drinks has risen unexpectedly – 32.7% growth in 2020 for low and non-alcoholic spirits, according to IWSR – Lyre’s was not a result of a grand plan. Livings is a serial entrepreneur who has vast experience working in FMCG and CPG markets, and he explained that they entered this category as a way to service their clients better.
Livings says his businesses provide services to some of the world’s largest consumer products companies and are versed in launching a concept to looking after a brand at maturity. Lyre’s was a consequence of thought: how could they better understand the challenges of their clients?
“We realised that by launching our own consumer product, we could understand the challenges of our clients more accurately, so we picked a product category that we wished existed,” Livings revealed. That category would be no-alcohol drinks options. “We felt there was a gap where we could order the drinks we loved without compromising taste or experience.”
Livings believes that there are “incredible tail-winds” for the category that stems from the current desire for a healthier and more mindful existence while satisfying the need to connect in a social setting. Cocktails are an integral part of that experience, and non-alcoholic options are perfect for the job.
It’s not quite the same as abstaining from alcohol completely, and in any case, Livings found through research data from GlobalData in August 2020 that three in four in APAC are drinking less but only 20 per cent have stopped altogether.
“We know the vast majority of people who enjoy our products are ‘moderators’, not ‘abstainers’. Consumers are using this category to complement their wellness ambitions, typically not replace alcohol entirely,” he added. “We are seeing interest from various consumer groups, including moderators that are embracing the sober curious movement, abstainers who are looking for more sophisticated options beyond soda and juices, and more broadly health-conscious communities.”
For those who love to make jokes about non-alcoholic spirits, the numbers make for sobering reading too. Lyre’s reported a 1000 per cent increase in revenue over the past year across all revenue channels, which is nothing to scoffed at. In May this year, the company completed a seed-plus funding round valuing the business at over £100m (S$185.6m), and are on course to exceed £35m (S$64.9m). Livings suggested that the pandemic forced many changes onto people’s lifestyles, prompting them to reassess their decisions regarding health and their priorities now that the majority of the time is spent at home. And that was when they saw their direct-to-consumer sales soar. This was despite having to deal with the challenges that came along, like the shutting down of on-premise sales, funding issues and supply chain disruptions, making the achievement all the more impressive.
There is no doubt that Lyre’s is looking to expand, and Livings sees Singapore as the gateway: one where East meets West and is home to some of the most innovative bars and industry talents in the world that, as he puts it, “can take our product to the next level.”
Asia has traditionally been a difficult nut to crack, so Lyre’s will focus on creating relevance and familiarity. “For example, we are currently working on developing a range of Asian-style drinks using ingredients specific/well-known to this part of the world, or drinks tailored to consumers taste preferences and the food consumed for the most part every day,” he explained.
Surprisingly, even to Lyre’s, China was the company’s best-performing market, and they are now capitalising on a strong, first-mover and scale advantage in that market. “The Chinese consumers are just as ready to embrace the category as the rest of the world, but we seem to be the only company giving the region focus,” he mused. But Livings acknowledged that Lyre’s is fortunate to have investment partners and members of the team who were very familiar with the Asian giant.
Having essentially established a template for growing their distribution footprint, Livings sees their next challenge as a matter of scale; or rather, building on it. That, and spreading the word. “Non-alcoholic spirits are a nascent category in many parts of the world and there is an enormous awareness gap that we need to close in order to see the category continue to organically grow at pace. Research has shown us that it is typically 15-20% of people across most Western and developed markets that know non-alcoholic spirits exist,” he revealed.
It helps that non-alcoholic spirits echo the current trend of emerging demand for sustainable, health-conscious food and beverages. And Livings thinks that they are “at a really interesting intersection where we can build beverages that are impossibly close to the real thing,” thanks to advances in technology in the F&B space. He cites non-alcoholic beer as an example of said improvement and progress. To him, the “liquid on lips” moment is the only way to convince people that non-alcoholic spirits can work.
Lyre’s builds flavours from scratch, as opposed to removing the alcohol from distilled spirits – the latter often results in a flavourless liquid. Livings explained that they first identify molecules that deliver the bouquet, flavours and mouthfeel, then isolate them from natural sources. He said that they use ingredients from over 39 countries of origin to find an exact flavour match with the spirit they are mimicking.
“We also understand that people want the existing experience with the existing flavours, hence we develop a range of products as close as possible in flavour and experience to the alcoholic originals. Because that’s what we believe that people are going to be looking for when they come into this category. That’s what makes Lyre’s different,” he added.
To keep up their momentum and advantage in the market, Lyre’s has introduced a new ready to drink range, which has been well-received when first introduced in Australia, the United States and Europe. For the moment they are working on perfecting the process in-house, but are keen to collaborate with bars that are interested in this up-and-coming movement.
One instance of this is the growing popularity of monthly moments like Dry January, which was first introduced in 2013 as a public health campaign in the UK. Since then, it has been joined by others like ‘Feb Fast’, ‘Moderation March’, and ‘Sober October’, as people start to appreciate the benefits of some taking time off. “In 2021, we saw record numbers of participants, including up to one in four adults participating in some markets,” said Livings. He added that Dry Jan and Feb Fast seemed to be merging into one long month for some and Moderation March is a natural extension to that mindfulness-focused period. But the signs that these are no longer fads are there. People are making lifestyle changes.
Perhaps the speed of Lyre’s growth says it all: “We are just over 18 months old and (the company) is now already in over 40 markets globally.” (Ed’s note: at time of interview; Lyre’s Spirits is now currently available in 43 countries.)
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