Israelis have not yet woken up: The trend conquering the world of alcohol
0% beers, non-alcoholic wines and cocktails are becoming a huge global industry. Tzahi Barak, CEO of Frutarom (Frodelis), tells about the discovery that led to a new technology, the wine sold for 50 euros, and Israel's big gap.
There is a moment when a consumer trend becomes an industry. It is usually the moment when the big manufacturers stop asking if it is a passing fad and start asking how they can be a part of it. This is exactly what is happening now in the world of alcohol. Or rather, the world of non-alcohol. No/Low Alcohol drinks, meaning non-alcoholic or with reduced alcohol content, are no longer intended only for those driving home, pregnant women, or people avoiding alcohol for health reasons. In recent years, an entire category has been built around them: 0% beers, non-alcoholic wines, non-alcoholic spirits, ready-to-drink cocktails, and even premium versions that try to convince the consumer that they do not need to choose between drinking and alcohol.
The reasons for this are many: the growing emphasis on health, the discourse on the risks of alcohol consumption, the desire of young consumers to drink less, and at the same time the desire not to give up the taste, the social ritual, and the experience. "In the world, this is already a huge trend," reveals Tzahi Barak, CEO of Frodelis, a global Israeli food and beverage group that develops and manufactures juices, natural ingredients, and technological solutions for the food and beverage industry, with operations in about 50 countries around the world. "The combination of these health studies, plus the Gen Z trend, which drinks much less alcohol, causes a huge trend and a search for alternatives to alcohol."
The gap between the world and Israel, at least according to Barak, is large. "In Israel, it is amazing how much this trend is not felt," he says. In the world, on the other hand, forecasts coming from the beverage industry point to a significant change in consumption habits. Barak tells of forecasts by executives in the beer industry according to which a very significant proportion of beer in the coming decades will be non-alcoholic. The figure that illustrates the scale of the change is perhaps not just how many people are already drinking non-alcoholic, but how many large beverage companies are starting to prepare for a world in which they will do so.
Compensating for the taste
On the face of it, the transition to a non-alcoholic drink sounds simple: you take wine or a fermented drink, separate the alcohol from it, and get a non-alcoholic version. In practice, this is where the problem begins. "Extracting alcohol from a drink is not a simple process," explains Barak. "You need a large investment of several million dollars, you build a factory, there is a distillation process, and you separate the alcohol. The big problem is that the alcohol takes all the flavor particles with it."
But this means that the problem is not only chemical, but also consumer-related. If non-alcoholic wine no longer smells, tastes, and feels like the wine from which it was created, why should the consumer pay for it? "In the world of beer, it is a bit simpler: people add natural or artificial flavors that you buy." According to him, beer is a product where it is possible to some extent to compensate for the loss of aromas through additives: "Although the product is not amazing like that, the world of beer is a much less selective world."
Wine, on the other hand, is a completely different story. "In the world of wine, the solution simply does not exist," explains Barak. "Because the whole story of wine, certainly good wine, and certainly good whiskey, and certainly good tequila, is the fermentation process itself, it creates the taste." This is exactly the reason why for many years quality wine producers viewed the category with suspicion. "Yes, there is non-alcoholic wine, but it is less good wine. So the good wines did not enter this field." Even reducing alcohol, and not just removing it completely, poses a similar challenge: "It is the same thing, it is easier, but you still have to compensate for the taste." Until the technology improved, solutions were often the addition of juice, flavors, or other ingredients. The result, according to him, was far from the original.
The exhibition that changed everything
Frodelis was founded almost 40 years ago as a company that dealt with international trade in juices. About 12 years ago, the company began a process of building factories around the world and turned from a relatively small company into a global group. "Until 12 years ago, we were only 10, 15 people, and then we started building the journey and building factories around the world," says Barak. At the beginning of the road, the company focused on juices - on one hand, extraction plants, and on the other, mixing plants in key centers in the USA and Europe, to provide large beverage manufacturers with concentrates according to their exact specifications.
But at the same time, the demand of consumers also changed. "There is a huge trend of naturalness in the world," says Barak. "Like food, naturalness and clean label. People are looking for it. If in the past, when I was young, we didn't care at all what was written on the label on the back, today the customer is very interested, and he doesn't want to see E-numbered and all kinds of chemicals anymore, he wants to see natural."
Frodelis identified an opportunity that stemmed from its existing activity. Natural raw materials were already passing through the factories, so the company began to extract more and more components from them: juices, natural oils for the flavor and fragrance industry, flavors created during juice concentration, natural colors, fibers, and functional components. In 2022, the unexpected connection to the world of alcohol arrived. When Frodelis concentrates fruit juices, pineapple for example, it removes a large part of the water to reduce the transport volume. "We took a pineapple, squeezed it - we have pineapple juice," explains Barak. "Most don't want to transport pineapple from Costa Rica, Thailand, or the Philippines to Europe and pay a lot for water, so basically you concentrate it, you concentrate fruits in a ratio of one to five, one to six."
In the concentration process, something else was discovered, which opened a new direction for the company: "We discovered that there are many flavor streams, factories full of good smell and we don't know what to do with this thing, but you feel that there is something there that you are missing." The company was looking for a technology that would allow capturing these aroma molecules. At one of the exhibitions, it encountered a German startup that developed a unique technology for capturing flavor molecules. Frodelis was enthusiastic, and eventually acquired the company. During the acquisition, it was discovered that the technology could solve a completely different problem.
"They said, look, we are doing experiments, it is very early... I didn't know the field at all then. They let me drink and explained to me that they had just taken wine, removed the alcohol from it, and passed the alcohol that contains all these flavor particles through the technology. Basically, they captured the flavor particles from the alcohol, and then returned them to the place." The rest is history. The experiment turned into a business activity within a few years, and thus Solos was born, a subsidiary of Frodelis specializing in the dealcoholization of drinks and the restoration of aromas lost in the process. At the heart of its activity is the ARS (Aroma Recovery System) technology, which separates the alcohol from the flavor and aroma molecules carried with it, and then returns the aromas to the drink.
"We opened the first factory in Germany," says Barak. Initially, it was an activity in an existing factory, which operated the Solos technology and received payment per liter. "In the first year, the experiment did 90 thousand liters, in the second year already 400 thousand liters, in the third year a million, and in the fourth year we already added another factory."
50 euros per bottle
In the last year, the company moved to more significant expansion, with a factory in Spain, a factory in California, and a joint venture in Switzerland. In the USA, Frodelis inaugurated a new facility in Hopland, California, in the heart of one of the world's main wine regions. The factory is capable of handling about 15 million liters per year, with the possibility of expansion in the future. The facility in California joins the activity in Spain and the joint venture in Germany, and at the same time, as mentioned, Frodelis announced the expansion of activity to Switzerland. The company reported that it invested more than 20 million dollars in establishing the global deployment of Solos and that since the beginning of the year it has added more than 40 million liters of production capacity around the world.
The business model is no less interesting than the technology: instead of every winery having to build a dealcoholization factory itself with an investment of millions of dollars, Solos builds service centers in areas where there is a high concentration of wine producers. "What we do is basically give them a service," says Barak. "They have no investment, because we open service centers around the world and they send [the wine] to the relevant places." The winery sends the wine, Solos removes the alcohol and restores the aroma, and the wine returns to it - bottled at the company's facility.
One of the interesting figures from Barak's point of view is the change in price. "Until now, the non-alcoholic wine market was wine for a few euros," he says. "Now we already have wines that are sold for 50 euros, in a bottle of non-alcoholic wine, without a doubt crazy numbers." And if in the past a non-alcoholic product was perceived as a cheap substitute for the original product, the goal of the new industry is to build a premium category in its own right. Proof of this came this year also from the USA in the form of Zeronimo, an Austrian wine brand produced using SOLOS technology, which won first place in the USA Today Readers' Choice Awards in the best non-alcoholic wine category. These wines are based on Austrian grapes from varieties such as Gruner Veltliner and Zweigelt, and the production process is based on technology designed to preserve the aromas and body of the original wine. For Frodelis, the win is not just an award for the brand. It serves as proof of its main argument: it is possible to produce non-alcoholic wine that does not apologize for the lack of alcohol.
And what about Israel? "As mentioned, the Israeli market is very, very behind in the No/Lo world," says Barak. "In many places, Israel leads trends, but in the non-alcoholic world, you tell people this and they don't understand what you are talking about." And yet, he believes that the trend will reach here too: "In a world where more people want to drink less, the question is no longer whether the alcohol industry will change, but who will provide the technology that will allow it to change without giving up the thing for which people drank in the first place - the taste."
