Alcohol-free Prosecco drives success for sparkling wine giant

Henkell Freixenet, one of the world's leading sparkling wine producers, saw 23.6% growth in its booze-free fizz last year, lending further weight to the argument that no/low could be the future of  fizz. A potentially game-changing finding from Henkell Freixenet's latest financial results is the significant leap made in sales of its alcohol-free sparkling wine. According to the German company, whose full-year results for 2024 show it reached €1.25 billion in revenue (excluding excise taxes), sales of its Mionetto 0.0%, Freixenet 0.0% and Mionetto Aperitivo non-alcoholic increased by 23.6%. This towers over the growth of Henkell, for example, which is the most exported sparkling wine brand from Germany, which shot up by 8.3%. “Even though non-alcoholic products still only account for a small share of the overall market, we see vast potential for our non-alcoholic portfolio, which is growing in popularity due to greater consumer health consciousness and GenZ’s shift in consumption habits," said Dr Andreas Brokemper, CEO of Henkell Freixenet. "With our non-alcoholic innovations, such as the Freixenet Cordon Negro 0.0%, the Freixenet Italian Range 0.0% and the global distribution expansion of Mionetto 0.0% we see ourselves well-positioned in this growing market." As db recently reported, zero alcohol wines are outpacing low ABV wines, suggesting that consumers are increasingly preferring 'no alcohol' rather than 'low alcohol'. In the UK, the overall no-and-low category is expected to have more than doubled in 2024 compared to 2023, and to grow at a rate of 7% CAGR through 2028, according to the IWSR. But for wine, specifically, low-alcohol sales fell by 5% in 2024, while no-alcohol wine sales rose by 8%. Much of this growth has been attributed to the zero sparkling category, led by frontrunners such as Henkell Freixenet.

Market activity

The biggest growth market for the company during 2024 was the Americas, which saw a 7% lift in sales, while Eastern Europe grew by 5.6% in the year and Western Europe a modest incline of 0.8%. Conversely, Henkell Freixenet saw declines in Asia Pacific (-1.8%) and its own domestic market DACH , which includes Germany, Austria and Switzerland (-1.7%). Overall, total net sales excluding excise taxes grew by 1.5% during 2024, which Brokemper labelled "dynamic growth". Describing 2024 as having "tough market conditions" for global sparkling wine, Brokemper said that its Cava sales in particular had "faced major challenges" as a result of the devastating drought in Spain's Penedes region over the last few years. The CEO added that this was "having a significant impact on business development." In April 2024, db reported that Freixenet was forced to temporarily lay off 80% of its workforce in northern Spain due to the prolific drought. In a statement released at the time Freixenet said that at least 615 of its employees would be furloughed from May "in order to deal with external factors and the force majeure caused by the serious drought”.

Crémant shines

However, the downturn in Cava sales was balanced out not only by alcohol-free sparkling wine but also by a continued uptick in Crémant, with the company's Gratien & Meyer brand growing by 21% in Western Europe alone. Crémant has found a place in consumer's hearts, especially in the UK where retailer Aldi recently had to limit its sales of Loire Crémant to two bottles per shopper. In fact, 2024 was expected to set a new sales record for Crémant de Bourgogne in the UK: the year to August 2024 saw volume sales grew 6.22% compared to the previous year, to 555,193 bottles, while value sales in the same period increased 8.35% to €2.92 million.

Sparkling future

Speaking of what the year ahead holds for Henkell Freixenet and the global sparkling wine category more generally Brokemper said: “We expect a challenging market framework in 2025. Geopolitical tensions and the ensuing economic impacts, uncertainties and knock-on effects still overshadow the consumer climate. The main challenges are the high volatility of grape harvests and, in particular, the scarcity of Cava grapes, which is putting an entire winegrowing region under significant pressure.” However, thanks to international trends including "rising star" alcohol-free sparkling wine, Henkell Freixenet "intends to generate growth in these challenging times by continuously developing our strong brands and portfolio,” concluded Brokemper.