At Cone & Steiner market in Seattle, owner Dani Cone hears of new entries in the non-alcoholic beer, wine and liquor segments almost weekly. “The product evolution is happening quickly, with lots of new products developing in interesting and unique ways,” the retailer said. Pointing to boozeless products like Athletic non-alcoholic beer, Jøyus non-alcoholic wine and Ghia non-alcoholic apéritifs, Cone enthused, “It’s an exciting category. It’s definitely showing itself to be more of a trend than an event.”
Indeed, according to John Linn, director of brand marketing for Corona non-alcoholic brew, which was recently introduced by Constellation Brands, data shows that 15% of U.S. adults 21 and over have chosen to modify their drinking habits in the past two years and are opting for more of a “damp lifestyle,” consuming both alcoholic and non-alcoholic beverages. “We’ve seen that drinkers are curious about this category and are looking for brands they already know to show up in this space, so it was the perfect time to bring them Corona non-alcoholic,” Linn said.
While still very small, non-alcoholic beer, wine and spirits sales are booming. NIQ reported that for the 52 weeks ended April 8, 2023, off-premise sales of the products reached $462 million, a 26% increase from the year prior. Non-alcoholic beers represent the lion’s share of the segment, but all three categories are registering double-digit growth, according to NIQ. Non-alcoholic beer grew 26% in the most recent period, while non-alcoholic wine was up 19% and non-alcoholic spirits surged 88%. The gains for the products in the beer and liquor segments are being driven, in part, by a wave of new entries in recent years, including offerings from major brands, craft brewers and in the premium ready-to-drink space.
The new products entering the non-alcoholic drinks segment are higher in quality than previous entries, which often languished on bottom shelves, retailers and marketers said. “No-alcohol wine and beer have been available in the U.S. market for a long time,” said Susie Goldspink, head of no- and low-alcohol insights at IWSR Drinks Market Analysis, a global beverage alcohol data and insights firm. “However, new entrants have garnered increased consumer attention through exciting brand propositions and enhanced flavor, in much the same way that craft beer has in recent history. Functional attributes from recently launched products resonate most with no- and low-alcohol consumers.” Marcus Sakey, co-founder of Ritual Zero Proof, a marketer of non-alcoholic liquors and aperitifs, agrees that new products with a focus on quality are giving the segment a lift. “The category can’t exist until the product is good enough,” he remarked. “It needs to taste close to the real thing.”
Of course, the overall consumer shift toward health and wellness is also at play. Jayme Gough, NACS research manager, commented that products like non-alcoholic beers “are part of the better-for-you trend,” and that there are times when consumers want to indulge in the taste and experience of a spiked beverage but don’t want the alcohol. The mindset, she noted, marks a “stark difference from the free-for-all attitude of the pandemic.” Mark Phillips, head of beer and hard seltzer at Diageo North America, which now offers Guinness 0 non-alcoholic brew, added, “We’ve seen a steady cultural shift towards mindful living in general, resulting in a growing demand for non-alcoholic options. It’s fair to say that America can’t get enough of mindful drinking.”
The category can’t exist until the product is good enough.”
Younger consumers are also driving the trend for the drinks, Phillips continued. “Combined with the growth of mindful living, millennial and legal-drinking-age Gen Z consumers are propelling the non-alcoholic beer trend forward,” he said. “Mindful living is at the forefront of conversation, spanning generations of consumers, which has resulted in a demand for non-alcoholic options like we’ve never seen before.”
Cone added that when it comes to non-alcoholic liquors, the at-home mixology craze has been a big asset. “A lot of folks want to have the special, elevated cocktail experience, such as mixing a drink in a special glass, trying different recipes, playing with syrups and garnishes, but they don’t want the alcohol component,” she said. “It’s neat that consumers can still have that elevated experience, put some flair into it,” yet still drink moderately. In addition to the Ghia brands, Cone & Steiner stocks non-alcoholic spirits and mocktails such as Pathfinder and Phony Negroni.
Buzzless Beer Boom
Brewers large and small have jumped into the non-alcoholic beer space lately. In addition to the Corona and Guinness products, recent entries include Anheuser-Busch InBev’s Budweiser Zero, Heineken 0.0, Boston Beer’s Sam Adams Just the Haze, and a host of craft non-alcoholic options, led by the fledgling Athletic Brewing Co., which only produces non-alcoholic beers. Fans of these brews “desire the distinctive flavor profile and taste characteristics of their favorite beer,” Phillips remarked, so for Guinness drinkers that means a “bold, full-flavored” option inspired by Guinness on draft. Similarly, Linn said consumers of Corona non-alcoholic don’t want to forego the flavor and experience they’re accustomed to with its full-proof parent brand, so Constellation Brands encourages adding a lime to the boozeless beer, just like with regular Corona.
IWSR sees continued strength for non-alcoholic beers. “Beer dominates no-alcohol in the U.S.,” Goldspink said, “and although other no-alcohol segments are expected to expand more quickly in the next few years, beer will register the greatest total volume growth, buoyed by its relative maturity and the entry of new brands.”
Prospects for the products are good, according to IWSR, which forecasts 25% growth in sales through 2026.
Trinchero Family Estates, the marketer of wines like Sutter Home, is a leader in alcohol-removed wines. Its Fre brand has been available for years, and according to Jennifer Hohman, director of marketing for the label, the line “provides consumers with options for every palate and occasion.” Single-serve 187 ml bottles of Fre, launching this summer, are perfect for c-stores and on-the-go consumers, Hohman added. “Consumers are increasingly looking for alternative beverage options, and alcohol-removed wines offer the opportunity to still enjoy a great tasting glass of wine without the effects of alcohol,” she said.
Non-alcoholic spirits, meanwhile, are the newest player in the segment but are garnering loads of attention. Goldspink pointed to the involvement of celebrity endorsers and the inclusion of functional attributes as tools that are helping to build awareness of the products. “Celebrity-endorsed products provide a reassurance for consumers,” she said, pointing to the likes of singer Katy Perry and her range of De Soi non-alcoholic aperitifs. And with functional ingredients such as nootropics, vitamins and adaptogens, the messaging for some brands has shifted from the absence of alcohol to flavor, occasion and other benefits, Goldspink added. Kin Euphorics, co-founded by supermodel Bella Hadid, for example, boasts the inclusion of adaptogens, nootropics and botanicals.
Ritual launched four years ago, and according to Sakey, sales more than doubled last year. Packaged in 750 ml bottles, with a suggested retail price of $29.99, Ritual is sold in liquor, grocery and drug stores. “C-stores are the next frontier,” the marketer said, noting that the brand is already available in some 7-Eleven locations and independent c-stores.
At Mendez Fuel in Miami, brands like Ghia and Kin Euphorics are starting to develop a following, said Andrew Mendez, co-owner. Among non-alcoholic beers, Athletic is the best performer. “It tastes pretty close to beer,” the retailer said. “If I was blindfolded, I might believe it was a regular beer.” Mendez added that his stores typically see a spike in sales of non-alcoholic drinks in January, but lately, sales of the products haven’t slowed down. “People drink these products throughout the year,” he remarked.
Kevin Panyard, manager of Minit Mart East in Holland, Michigan, said, “We’re in a college town, so most of the beer we sell is to college kids.” Purchasers of the likes of Heineken 0.0 and Athletic non-alcoholic brews “buy them as part of a drinking occasion,” Panyard noted. “They’ll buy both regular beer and non-alcoholic beer to pace themselves.”
They’ll buy both regular beer and non-alcoholic beer to pace themselves.”
NIQ confirms that one of the biggest benefits to retailers in offering non-alcoholic beer, wine and spirits is the opportunity for add-on sales. According to the agency, four in five buyers of the products also purchase regular beer, wine or liquor. As a result, Hohman pointed to the increased basket size that brands like Fre offer retailers. “Fre helps c-store operators to not only tap into a new segment of consumers, but also increase the overall purchase from current consumers,” she said. Indeed, Sakey added that c-stores “fit the non-alcoholic spirits market beautifully, as these products aren’t destination products but additive products.” Not stocking the offerings is “like leaving money on the table,” he said.
Another benefit is the type of consumer that boozeless drinks attract. “Consumers of no/low-alcohol drinks in the U.S. are mainly millennials with higher disposable incomes,” who drink the products on some occasions and full-strength drinks on others, remarked Goldspink. Hohman agreed, saying, “the majority of alcohol-removed wine purchasers prioritize their health and are interested in eating healthy.” Such consumers are highly coveted by c-stores today.
Marketers of non-alcoholic beer, wine and spirits encourage c-stores to delve into the segment. “By having that option, you’re giving folks more choices and reasons to come in and get everything they need, whether it’s for a backyard barbecue or a gathering with friends and family,” said Constellation’s Linn. Sakey suggests that c-stores “start small but consciously” with non-alcoholic liquors. “Put together a curated selection, along with good, non-alcoholic beer,” he advised. “And call it out.”
Prospects for the products are good, according to IWSR, which forecasts 25% growth in sales through 2026. C-store retailers already offering the drinks also see continued opportunity for the niche products. “I don’t think alcohol is over by any means,” said Cone, “but I do think the rise of non-alcoholic options will continue.”