The young people are consuming less alcohol than at any previous time. Millennials (19811996) and Gen-Z (19972012) are the silent revolution in the world bars, supermarkets and homes. Many do not grab a bottle of traditional beer, wine, or cocktail; instead, they have a beverage that is reminiscent of the actual product, with minimal or no alcohol. This change is not merely a trend that has come to pass, it is a big trend that is supported with some hard figures.
In 2021, one such popular drinks research company, known as IWSR published a report, which attracted the attention of everybody. The report estimated that sales in these markets would increase 31 percent by 2024. Such development indicates that people are shifting their ways of doing things, and some readers even explore leisure trends similarly, they try bonuses like https://casinosanalyzer.ca/free-spins-no-deposit/100-dollars, testing new options before committing.
This movement began several years ago in Europe and Australia, but the United States is currently following closely. Although previously the U.S. was being left behind, the category is now rocketing. During the year 2020 alone, the volume of sales of no- and low-alcohol products in America increased by over 30 percent as compared to the previous year.
The Low and No Alcohol Trend
Certain nations are way ahead of others in terms of alcohol-free beer and other beverages. The following are the best markets currently:
- Germany leads the world. No- and low-alcohol beers make up almost 12% of the entire beer market there — a huge $8.9 billion category in 2021.
- Spain comes in second, with these products holding about 10.6% of the beer market.
- The United States is still small by comparison. In 2020, no- and low-alcohol beers comprised only 1.9 percent of the total beer category. But change is occurring rapidly.
- It is projected that sales of non-alcoholic beer will increase by nearly 10 percent annually in the U.S. until 2024.
- The 2020 figures for the non-alcoholic beer segment already show this category selling for nearly $1.7 billion, and reports indicate that off-premises (grocery and retail) sales have reached almost $188 million, a 28% rise in a single year.
Two significant forces are driving this growth in America:
- Millennials currently buy 42% of all no- and low-alcohol beers — the largest single age group.
- Almost two-thirds (64%) of people who choose these drinks say they prefer to enjoy them most “when relaxing at home.”
Perhaps most telling of all: Gen-Z drinks about 20% less alcohol per person than millennials do right now. If that pattern continues, the future of drinking looks very different from the past.
Big Beer Companies Jump In
Big brewers saw the data and acted quickly. Heineken 0.0 released in 2019 with a $50 million marketing effort. The investment worked. By 2020, Heineken 0.0 became America’s best-selling non-alcoholic beer, pulling in more than $54 million — easily beating the long-time leader O’Doul’s.
Other famous names quickly followed. Diageo introduced Guinness 0.0 — a completely alcohol-free version of the iconic Irish stout made at the original St James’s Gate brewery in Dublin. One can have only about 70 calories.
Boston Beer Company released “Just the Haze,” a non-alcoholic hazy IPA. Lagunitas (owned by Heineken) expanded its low-calorie IPNA nationwide. Dogfish Head brought out Lemon Quest, and Brooklyn Brewery added new options to its “Special Effects” non-alcoholic line.
These launches were not random. The success of companies in Europe and Australia led them to observe and conclude that American tastes were also prepared to change. One of the best success stories is that of Athletic Brewing Company, a startup specializing in non-alcoholic craft beer. Athletic, the company was founded in 2018 and raised millions of dollars with the participation of such celebrities as cyclist Lance Armstrong and an NFL player, J. J. Watt.
Company revenues increased 500% in 2020. Startup founders believe the firm will make $45 million in 2021. These are outstanding figures for a three-year-old brand.
Despite these movements, the market has enormous growth potential. The U.S. beer market was worth $100 billion in 2020. Non-alcoholic beer? A mere $188 million. The little sliver illustrates how much potential remained.
Non-Alcoholic Spirits Join the Party
Beer is not the only category changing. Spirits firms are producing alcohol-free gin, whiskey, and other classics.
A few years ago Seedlip began the current trend of non-alcoholic spirits by using botanical and sugar-free beverages that closely resemble gin. Big players took notice. In 2019, Diageo (the manufacturer of Smirnoff, Johnnie Walker and Guinness) acquired Seedlip without disclosing the purchase price. Shortly after, Gordon (owned by Diageo, also) issued Gordon 0.0% — an alcoholless gin, prepared using the same juniper and botanicals as the original.
Right now, non-alcoholic spirits are still the smallest part of the low/no category — only about 0.6% — but sales grew more than 32% in 2020. With giants like Diageo involved, most experts expect that percentage to rise quickly.
The Boom in “Better-for-You” and Functional Drinks
Beyond simply removing alcohol, a whole new world of healthier drinks has appeared. People want beverages that taste good and actually do something positive for the body — think low sugar, added vitamins, probiotics, adaptogens, or CBD.
This “functional beverage” category exploded recently. According to research firm SPINS, sales of functional sodas grew 465% in the twelve months ending March 2021.
This pressure was felt and acted upon by big soda companies. Coca-Cola released zero-sugar extensions Energy and With Coffee and committed $20 million in Health-Ade, a popular kombucha brand. PEPSICo created Bubbly bounce (caffeinated carbonated water without sweets) and bought SodaStream.
Startups are thriving too. The gut-supportive prebiotic soda Olipop increased its sales by 900% and attracted millions in capital. Ugly Drinks and Q Mixers were also big investments since they recorded triple-digit growths.
Why This Matters for the Future
Two very strong trends are coming together and strengthening each other. On the one hand, younger consumers drink much less alcohol and do not drink at all. On the other hand, consumers across the board are actively seeking healthier choices: beverages with fewer calories, lower sugar content, and extra nutritional value such as probiotics, adaptogens, or, merely, a less toxic ingredient list. Meeting of the two forces also leads to an explosion of low- and no-alcohol products that position themselves as better-for-you, too. This is precisely why the beverage world is evolving at a rapid pace at present.
Megabusinesses that previously depended on old-fashioned beer and spirits, as well as sugary soda, now compete in each of these spaces simultaneously. It has already resulted in dozens of acquisitions, hundreds of new products, and billions of dollars of investment.
Market congestion will increase. Soon, stores will be full with non-alcoholic IPA, gin and tonics, probiotic colas, adaptogen sparkling waters, and CBD seltzers. The successful brand will have a unique identity, like fitness beer, mindful spirit, or gut-health soda.
The days when a night out (or a night in) was pre-equipped with alcohol are gone. The millennials and Gen-Z have been talking with money, and the whole beverage industry is paying attention.
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