Alcohol Free Beverages on the Rise Ahead of Holiday Season

As the holiday season approaches, the beverage industry can expect to see a rise in the sale of alcohol free beverages. As the desire for no- and low-alcohol beverages increases and producers are responding to consumer demands, the industry is taking note and investing in products aimed at consumers keen to celebrate on their own terms.

Last year, the volume of no- and low-alcohol beverages grew by 31 percent year-over-year according to drinks analysis platform IWSR. Statista noted that the non-alcoholic market accounted for over $414 million in US sales in 2021 and that the market is expected to reach a high of $538 million by 2026.

So, why the shift away from alcoholic beverages? New research from consumer insights platform Veylinx suggests that abstinence events like “Dry January,” in which participants abstain from alcohol for the month, are more than just a fad. More than three-quarters of Americans surveyed said they’ve temporarily given up alcohol for at least a month in the past.

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Almost half (46 percent) of drinkers said they are trying to reduce their alcohol consumption right now, and 52 percent of them are replacing alcohol with alcohol free beverages. Consumers identified improving their physical health and mental wellbeing as the main reasons for drinking less. Driven by younger consumers, the non-alcoholic beer, wine and cocktails category is surging in popularity.

Some of the biggest players in the beverage industry are making moves into the non-alcoholic market. Earlier this month, Keurig Dr Pepper (KDP), the beverage giant that owns 7UP, Snapple and zero percent alcohol cocktail manufacturers Atypique, made a minority share investment into the non-alcoholic brewery Athletic Brewing.

“Non-alcoholic beer in the US grew almost 20 percent in retail dollars over the past year, with the craft segment, where Athletic Brewing holds a 55 percent market share, far outpacing total category growth,” KDP said in a press release.

The beverage conglomerate is backing up its direction into the alcohol free beverages market with an understanding that consumers still want to drink, just in moderation. However, this phenomenon is not just occurring with beer. Cocktails, spirits and wines are also part of the growing alcohol free beverage space.

Although it’s relatively easy to switch to non-alcoholic beers because its two main flavoring ingredients, malt and hops, are still present, it’s a more challenging story with wine. The results are often watery, flat and too sugary since most non-alcoholic wines are created by extracting the alcohol out of a regular wine with a spinning cone or reverse osmosis technology.

However, several brands have claimed to overcome this challenge, including TOST and Null Wines. TOST offers full-size bottles and single-serve iterations of their sparkling white and rosé wine, which contain white tea, cranberry and ginger. Null Wines’ product range spans from a sparkling rosé to a juicier Tempranillo-Syrah blend.

A prominent beer brand is even blurring the lines between non-alcoholic and functional beverages. Corona launched Corona Sunbrew 0.0 percent in January of this year in Canada. The first-of-its-kind non-alcoholic beer contains 30 percent of the daily value of vitamin D per 330 ml serving.

Whether it’s beer, wine, cocktails or spirits, the alcohol free beverage market is hoping to win some market share this holiday season and beyond.