Hold the Alcohol

In a trend that started a couple of years before the pandemic, non-alcoholic beverages are becoming increasingly popular. The category is no longer just “near beer” either. Over the past year, US sales of non-alcoholic spirits reached $4.5 million according to NielsenIQ — that’s a 116% increase. Meanwhile, both non-alcoholic beer and wine revenues grew by over 20%.

At the same time, sales of alcoholic spirits, beer, and wine have either been flat or declining. Still, the non-alcoholic segment remains a small fraction of its boozy counterparts.

Choices Proliferate

Traditional and start-up firms, seeing profit potential in the growing market, are bringing a variety of options to restaurants and grocery stores. Alcohol-free beer is available from industry leaders Heineken (HEINY) and Molson Coors (TAP), along with startup Athletic Brewings, a craft offering. Those who prefer spirits may enjoy a zero-alcohol alternative from Monday Spirits or Seedlip, which has doubled its drink menu over the last year.

For those who want to drink without the buzz, the growing list of options may offer a welcome alternative to inebriation and next-morning headaches.

Bottoms Up Without the Aftermath

Younger consumers in particular are drawn to these beverages for various reasons including concerns about driving under the influence, hangover avoidance, and concern about adverse health effects of alcohol.

However, inflation is putting pricing pressure on a wide range of products. The value of non-alcoholic beverages will be tested. Industry participants claim a focus on quality will help consumers see the value of these products and encourage them to order another round of non-alcoholic drinks.

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