Mindful Drinking Boosts Nonalcoholic Beverage Market

From zero-proof ‘spirits’ to 0.0% beer, health-conscious drinkers are exploring imitation alcohol.

Less is More

Intrinsically linked to a rising health-motivated mindset that seeks physical and mental improvements from abstaining, our relationship with alcohol is on the rocks. And willingness to sacrifice the hard stuff is growing, with Gen Z leading the charge.

• Globally, 16% of consumers are trying to reduce consumption of alcohol, while 39% say they only consume it in moderation.
• Improving health (47%), managing weight (38%) and reducing risk of disease (25%) are key motivators for reducing alcohol intake, per the Food Institute.
• Across high-income European countries, only 26% of Gen Z Britons drink, with just three in 10 French Gen Zers partaking.

Mapping the market. Alcoholic drinks still abound in most countries’ cultural landscape (like Czechia and Germany), but as clear alternatives arise, the opportunity to substitute in social situations or at home is developing into an $11B market.

In 2022, low- and no-alcohol products grew by more than 7% in volume across key European markets including Germany, France, Spain and the UK — mirroring uptake in Australia, Brazil, South Africa and North America.

In the UK, half of the adult population purchased a low- or no-alcohol product in 2022. Moreover, 85% of British pubs now stock at least one nonalcoholic beer, leading to a 23% spike in pub-based purchases.

Spoilt for choice. Within pockets of growth, global startups are launching new products and diversifying distribution.

• Zero-proof spirit startups like Denmark’s Ish (€5M), Australia’s Lyre’s ($34.5M) and US brand Kin Euphorics ($13.8M) have raised strategic investment to scale in Europe.
• Independent NA beer brands Heaps Normal (AUS), Athletic Brewing (US) and Lucky Saint (UK) have carved out domestic market share by normalising mindful drinking, the latter recently becoming the first alcohol-free beer brand to open a permanent pub.
• Nonalcoholic wine and cocktail startups Le Petit Béret (FRA), Naked Life (AUS) and TÖST (US) are using recent funding to expand global distribution across bars, restaurants and retail.

Here for the party. Big Bev is also jumping on the booze-free bandwagon, with Diageo doubling down on non-alcoholic options with investments in Seedlip and Ritual Zero Proof, Molson Coors debuting nonalcoholic cocktail line Roxie and zero-ABV Dos Equis beer and Keurig Dr Pepper pumping $50M into Athletic Brewing.

In a bid to push further the movement, Peroni Nastro Azzurro, AB InBev, Asahi and Heineken are investing in new technology, upping advertising spend and launching into new markets. Meanwhile, Japanese brewer Kirin may be planning its next act after acquiring Aussie supplements maker Blackmores this April for $1.2B.

Looking ahead: Despite the explosion of nonalcoholic options, the sustained growth of the traditional alcohol market shows consumers aren’t abstaining from it entirely. And for the UK in particular, NA beer still makes up just 0.7% of the overall beer market.

But, as society’s relationship with drinking continues to evolve, through innovation and investment, low and no brands can accelerate the shift towards a more balanced way of life – one where it doesn’t have to be all or nothing.