The Renaissance of Alcohol-Free

We're in the midst of a Non-Alcohol beverage renaissance. This wave started as a response to the 2020 market saturation of alcoholic seltzers and the consumer has grown tired of the hangover, hassle, and feeling left by spirits. This turn away from traditional recreational beverages has created an opening for hemp derived beverages to fill the vacuum created and a renaissance for the "Spiritless Spirts".

The Proof is in Zero-Proof

Now worth +$600 million annually (US), the alcohol-free beverage market is bigger than ever and is not showing any signs of slowing down.

Premiumization

• Drinking better, not more
• Authenticity in cocktail offerings

Though sales of NA products have grown steadily each year for the past five, the jump from 2022 to 2023 far eclipsed the others – $388.4 million revenue to $509.6 million (31.2%).

“The no- and low-ABV trend continues to rise and shows no signs of slowing down, making it a permanent fixture in the beverage landscape,” said Andrew Merinoff , CEO and founder of Dispact Ventures and CEO and co-founder of Chinola Fresh Fruit Liqueurs , to The Food Institute Q1 2024.

Better-for-You and Tastier-For-You

Recent data from 英敏特 revealed that nearly 50% of sober-curious consumers say they’re doing it to improve their health. Mintel analysts also pointed out that success within this section of drinkers hinges upon a combination of “bold branding, better-for-you claims, and captivating flavors that rival traditional beverages.”

The better-for-you aspect of new drinks and flavors is difficult to ignore. From SKU to SKU, grocery to retail, brands are capitalizing on global flavors and health-halo superfoods, herbs, and supplements to drive sales and quench a market hungry for more. According to a recent report from Food Business News, drinks market analysis company IWSR “found the low- and no-alcohol products segment grew to more than $11 billion in value in 2022,” more than 30% growth in just four years. Meanwhile, a survey conducted by 爱德曼 revealed 69% of alcohol drinkers, 81% of Gen Z consumers, and 78% of millennials would explore a “sober curious” or “damp” lifestyle.

New brands and products are emerging weekly, all vying for a slice of the soon-to-be billion dollar category.

Private market investors are also betting big on the space, deploying $365 million to startups in the non-alcoholic beer, non-alcoholic wine, and spirits without spirits segments since Jan 2021 FABID .

Massive numbers. And no small shift considering we're just a few years removed from O'Douls being virtually the only non-alcoholic product on store shelves. An incredible transformation in such a short period of time, less than 3 years.

Crack a Can of Austin Sober (TexaCali Sober)

So what's driving the reinvigoration of the non alcoholic sector? People wanting to be more present? Health benefits of avoiding alcohol throughout life? Wanting to avoid the sugar and empty calories in alcoholic beverages?

What is driving the renaissance of non alcoholic beverages? A myriad of factors are to be considered. This is what is being thought and observed in the developing health and wellness beverage market...

• Younger generations drinking less and less
• Strong improvement in spiritless spirit and non-alcoholic product offerings with more natural flavors and ingredients
• Health risks of alcohol and spirits consumption more widely understood and communicated via news and social media platforms
• Antiquated set of brands that don't resonate with today's consumer and more modern brands are stepping up their language to the target generational demographics

It seems like a perfect storm of market and cultural variables converging together to create one of the next great consumer brand categories. The potential is alluring and has been brewing since late 2021.

But the burgeoning sector remains a relative drop-in-the-bucket vs. it's much more mature and developed sister category - Alcohol.

Non-alcoholic beverages currently sits at just 1% of the total $ volume of Alc. Yes, 1%.

For a bit more perspective let's look at NA vs. Alc within the beer segment, per Numerator:

% of US Households Buying Alcohol Annualized (52 week period)

Alcohol - 78.0% ( ? from 80.3% year ago)

Non-Alcohol - 7.9% ( ? from 7.3% year ago)

$s US Households Spend Alcohol Annualized (52 week period)

Alcohol - $501.59 ( ?from $523.58 year ago)

Non-Alcohol - $64.72 (? from $55.56 year ago)

Positive trends for Non-Alcohol but the sheer size of Alcohol in both households and spend is overwhelming.

Where is non-alcohol going? Its going GREEN!

So how big can the Non-Alcohol sector get? Might it ever reach parity with Alcohol? I believe that hemp derived beverages will make up a large part of the market segment.

I pray that I will see the day that one exceeds the incumbent and hopefully I help fuel that growth with my team, partners, and friends because the growth potential and mindset shift is alluring and beneficial.

Do you have a favorite Non-Alcoholic brand or "Spiritless Spirit" brand? Drop a line in the comments below. I would like to know how you imbibe in this developing market segment! ??????????

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