The Zero-Proof Movement is High and Dry.

& that just so happens to be a good thing for multiple companies in the CPG industry in the United States. There is a cultural and discerning consumer void that is being filled and expanded on with multiple western generations seeking a new buzz post the pandemic boom of booze. Where is the category going and where is it today?

The end of "Dry January" was technically February 1st but now that we are 5 months into the movement to be alcohol-free has not lost any traction but rather has gained momentum through cannabis beverages, botanical beverages, and "spiritless spirits" categories, leaving alcohol categories high and dry.

It's a growing trend. A recent Morning Consult poll shows 21% of drinking-age U.S. adults said they were participating in some form of reduced alcohol consumption for this year's "Dry January" abstention period, up six percentage points from 2023 and the highest level recorded since the group began polling in 2021!

The popularity of Dry January is part of a larger zero-proof movement here in the U.S. Non-alcoholic sales totaled half a billion dollars in sales as of July 2023. High end restaurants and premium mixology bars and on premise consumption lounges are offering more mocktails on their menus. Even brands like GUINNESS LIMITED , Diageo , White Claw Seltzer Co are adding non-alcoholic options to their lineups.

During the first year of the pandemic, alcohol sales saw the largest increase in over 50 years. The reality is that was not sustainable for the human condition and for growth so the culture has shifted in the western world to drink and socialize without the booze. Is the zero-proof movement a backlash to the boozy pandemic? Are non-alcoholic brews, botanicals, and bars here to stay? I say yes and the cannabis industry is reinforcing it.

Much has been made about record-low vice activity among younger adults, especially Gen Z (Learn more about the Gen Z buying power from Forbes here) — and this includes lower alcohol consumption. Combined with the Baby Boomers graying of America phenomenon that is making older generations more health-conscious, the overall alcohol market is “trending towards non-alcohol consumption and moderation changes in drinking habits,” market research group Nielsen IQ Non-Alcohol: An Anytime Alternative reported in December.

Cannabis companies are beginning to scratch the taste and efficacy equation to create water soluble cannabis emulsions with cannabinoids to help fill the gap and reinforce the "Cali-Sober" approach that is trending amongst all generations in the western world. Shayda Torabi Howell CEO of RESTART CBD + THC has pointed towards how cannabis products are alternatives to traditional medicine routes as well as a way satisfy those looking to significantly reduce or eliminate their alcohol intake. In her 6 years of business she has discovered that more and more Americans are searching for alternatives and the cannabis industry has filled that void and the trending popularity of Sans Alcohol Behaviors is allowing for cannabis beverages to take up an increasing market share.

Consumers appear to turn to cannabis beverages and alcohol for similar reasons, according to BDSA. Roughly half of beverage consumers seek to relax and feel mellow, with other significant need cases including managing anxiety, having fun, being happy and relieving boredom.

American Cannabis Spirits

"Spiritless Spirits" has a nice ring to it doesn't it? NOWADAYS PAMOS BEVERAGE CO. RESTART CBD + THC ON HIGH! Cannabis Spirits are developing cannabis beverages and spirits that have micro, low, and high dose options. From daily doses to special libations companies are moving towards filling the gap that is here to stay in the non-alcohol movement that started socially and is now holding end cap space.

A Growing Consumer Base

The goal for cannabis beverages, spirits, and spiritless spirits is to have the association of traditional cocktail and spirit consumption methods without the drawbacks and health concerns that are apparent in alcohol. This goal is being matched by a growing consumer base that has mindset of investment in healthier alternatives.

Further driving up the price is simple demand growth. Nielsen IQ data show sales of nonalcoholic beers, wine and spirits sold in stores and supermarkets — called the "off-premises" market in the industry — climbed 31% over the past year. Within the segment, nonalcoholic spirits are experiencing explosive growth at 94%. For the first time, annual sales have surpassed $500 million, Nielsen said.

Data from the Bureau of Labor Statistics, the same agency that reports on inflation, do not directly capture the cost of ingredients commonly used in mocktails. But under the broader category of "nonalcoholic beverages and beverage materials," costs have surged more than 20% since 2020, compared with the cost of alcoholic drinks, which have climbed less than 15%.

Where do you think the "Spiritless Spirit" or Cannabis Spirit category is going? What standardization do you want to see in the cannabis beverage industry? I will be exploring those questions in my next article. Hint Hint it will be based off of TTB and Craft Brew Guidelines that have been established and categorized for rising all tides! Thanks for reading and until next time stay grateful.