While abstaining from alcohol in the first month of the year is on the rise following holiday indulgence, the adult beverage industry has expanded well beyond the dry January to include low-alcohol, no-drink options throughout the year. Seeing opportunities.
The latest data from IWSR Drinks Market Analysis predicts that the US non-alcoholic products will grow 25.4% by 2026, and the low-alcohol segment will grow 5.9% over the same period.
Brandy Rand, Chief Strategy Officer at IWSR, said, “Both non-alcoholic and low-alcohol beverages are in growth mode, and while the overall volume base is small, they outpace the rest of the U.S. beverage market in terms of growth rate. increase.
“The no/low is becoming more important as the ‘better’ movement in the United States is increasing its share of consumer spending. ”
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Non-alcoholic and low-alcohol products are the most popular among millennials and “substitutes,” according to the research group. However, those who abstain completely from alcohol make up a significant proportion of those who do not drink alcohol at all.
Non-alcoholic beer dominates the segment and is expected to grow significantly more in volume than other products in the next few years, but alcohol-free ready-to-drink options and spirits are also poised for growth. .
“Non-alcoholic wine and beer have been available in the U.S. market for a long time,” Rand says. “But much like the recent history of craft beer, new entrants are capturing consumer attention through exciting brand offerings and enhanced flavors.”
Lisa Hawkins, senior vice president of public affairs for the Distilled Spirits Council, said spirits companies in the FOX business may work as designated drivers year-round, not just dry January. “We’re giving people more options,” he said.
“Today’s consumers, especially millennials, want high-end experiences and quality products,” said Hawkins. “They don’t want to compromise on taste just because they’re cutting back or limiting their alcohol intake.”
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The IWSR reports that in the past, consumer preference and lack of access to other beverages has been a barrier to increased consumption. It was of poor quality.
But Rand says that’s starting to change as the market expands.
“Both the non-alcoholic and low-alcohol segments are growing faster than their parent categories, so on-premises operators and retailers are dedicating more menu and shelf space to them,” Rand said. I’m here.
According to Dan Gasper, who co-founded Distill Ventures in London and saw the potential of the NA space early on, the low-alcohol and no-alcohol craze was popular in the UK, then Australia, and increasingly in the US. is rising. .
Gasper recently founded The Ardent Company in Los Angeles and mentors other founders in building brands in both the alcohol and alcohol-free adult beverage industry.
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He says many customers have just stopped drinking alcohol entirely due to lifestyle choices, while others alternate between alcoholic beverages and NA choices.
“There’s a revolution going on, and even if beer, wine and spirits together represent only 20-30% of the world’s beverages in the next 20 years, it could be a $5 trillion market,” Gaspar said. said.