The beverage industry is undergoing a
non-alcoholic revolution as more and more Americans are cutting down their
alcohol consumption. According to the International Wines and Spirits Record
(IWSR) analysis, global alcohol consumption drastically declined in 2020 while
the low- and the non-alcohol market continues to grow, with consumption
anticipated to increase 31% in volume 2024. A shift to a healthy lifestyle has
led to an enhanced desire for clean drinking or mindful drinking among adults,
which has created a high demand for reduced alcohol or alcohol-free drinks,
nutritious drinks, energy drinks, functional beverages, fruit beverages,
carbonated drinks, etc. Witnessing the rise in the health-conscious population,
beverage companies are expanding their product offerings for consumers, which
is supporting the category growth and broadening their appeal.
Alcohol has remained an essential part of
social events like weddings, birthdays, and parties, especially in western
cultures. The non-alcohol drinks enhance inclusivity, providing designated
drivers, pregnant women, recovering alcoholics, younger consumers, teetotalers,
etc., a viable alternative to alcohol. In 2021, a record high of 12 new
non-alcoholic spirit brands were launched in the United States. These beverages
are easily accessible in bars, restaurants, grocery stores to support consumers
that want to socialize without resorting to alcoholic drinks. The technological
advancements have enabled brands to maintain the taste and flavor of alcohol in
spirits and non-alcoholic wines to not compromise on adult taste palates. Now,
the non-alcoholic drinks accompany lagers and ales, sparkling wines,
pre-blended cocktails, spirits, tonics, mixers, and more.
Here is a list of the top five non-alcohol
beverage trends that are expected to dominate the non-alcoholic beverages
market in 2022.
Functional Drinks
With increased health awareness, consumers are
reaching for drinks that are infused with vitamins, minerals, probiotics, and
other immune-strengthening ingredients. Functional beverages taste not only
good but also improve digestive health, mood, cognitive abilities, hydration
levels, and immune functioning. The pandemic accelerated the adoption of
functional beverages since they boost immunity, which reduces the chance of
infections and helps curb the effects of the coronavirus. In addition, stress
and sleep functional drinks have gained huge popularity among middle-aged
populations.
With expanding range of functional
applications, brands are innovating with new ingredients to meet more
functional goals of the customers. Sport drinks are not confined to just
carbonated drinks or electrolytes anymore. Drinks with creatines,
branched-chain amino acids, vitamins, antioxidants, and other minerals are
being increasingly adopted by athletes to boost their energy levels. Besides,
increased focus on holistic skincare has led to the rise of collagen-based
beverages, which are known to provide anti-aging benefits. Young consumers are
resorting to healthy hydration products as they are a convenient and viable
alternative to traditional soft drinks and caffeine products. Enhanced water or
alkaline water is also gaining momentum since it provides additional health
benefits.
Fermented Beverages
A growing adoption of fermented beverages has
been observed in recent years. Fermented beverages such as kombucha, kefir, and
ginger beer provide health benefits like improved gut health, better digestion,
a boost in energy levels, etc. Kombucha, an Asian delicacy, is the top-favorite
of vegans and people with gluten intolerance since it is plant-based and
gluten-free. Besides, athletes also prefer fermented drinks over carbonated
beverages since it consists of natural ingredients, probiotics, vitamins,
minerals, amino acids, and enzymes. While brewers ferment drinks like wine and
beer, other brews ferment drinks like wild sodas and kvass for their probiotic
content. Light fermented drinks like jun tea and water kefir are an excellent
source of bacteria that contain negligible amounts of alcohol (approx. 0.5%),
which is the same amount as orange juice. In 2021, PepsiCo, one of the leading
players in the global beverage market, introduced an on-the-go fermented
beverage KeVita Probiotic Shots, to support digestive health.
According to TechSci
Research report on “United States Energy Drink Market By Product Type
(Non-Organic & Organic), By Target Customers (Adults, Teenagers &
Geriatric Population), By Distribution Channel (Store-Based & Non-Store
Based), By Region, Competition, Forecast & Opportunities, 2026F”, the
United States energy drinks market is anticipated to reach USD21 billion by
2026 owing to factors increasing preference of people towards flavored and
energy-boosting drinks. Besides, the rising number of sports activities in the
region contributes to the growth of the United States energy drink market.
Zero-Alcohol Beer
Once considered a staple drink for every social
gathering, beer sales are declining in the past few years. When compared to
other boozy drinks or non-alcoholic beverages, beer has started to seem stale
to consumers now. In the United States, beer volume sales reduced by 3%, while
craft beer sales declined by 9% in 2020. Sales of non-alcoholic beer increased
by 28% in 2021 as more retail stores, bars, and restaurants started making the
beverage more accessible to consumers after the government eased the lockdown
measures. According to NielsenIQ Total U.S. Convenience data, non-alcoholic
beer sales reached USD31.4 million, up from 26.2% for the 52 weeks ending
October 2021 in convenience stores.
Budweiser unveiled its first zero alcohol 50
calorie brew, Budweiser Zero that has the same taste profile as its
conventional beer offerings. Budweiser Zero was crafted with athletes in mind
who wanted a great taste of refreshing beer without the after-effects of
alcohol, particularly during training or in season, which could impact their
mental and physical game. Another popular beer brand, Heineken, entered the
non-alcohol space with the launch of Heineken 0.0, picking up on the continuing
trend of adults abstaining from alcohol consumption. Currently, Brooklyn,
Connecticut’s Athletic Brewing, and California Surreal Brewing are some of the
brands that produce only no- and low-alcohol beer is taking the lead in the
non-alcohol beer segment in the United States.
Non-Alcoholic Wines
Although the non-alcoholic wine segment is
still in its infancy, the category is garnering a lot of interest among
consumers. In 2020, no-alcohol wines registered a 39.4% growth in sales,
according to an analysis by BevZero. Compared to conventional wines, no and
low-alcoholic wine is rising in popularity and becoming one of the mainstream
trends in shaping the global beverage industry. Enhanced flavor, depth, and
sophistication of non-alcoholic wines cater to a large segment of the
population. According to FoodBev Media, the non-alcoholic wine market is
expected to grow at a CAGR of 7% between 2019 and 2027 as more consumers
continue making a switch to low liquor content alternatives.
Alcoholic drink manufacturers are shifting to
manufacturing low- and non-alcoholic beverages are boosting their profit
margins due to zero tax policies. Out of all non-alcoholic drinks, wine is the
hardest to remove alcohol from, but advances in technology and distillation
techniques have made it possible for manufacturers to produce zero-alcohol
wines, which taste like the traditional wine. Among the non-alcoholic wine
category, grape wine is currently the most preferred product type. Treasury
Wine Estate, E & J Gallo Winery, Castell Freres, and McGuigan, among
others, are the major industry players in the non-alcoholic wine market.
Digital Age Boosts Non-Alcoholic Beverages
Sales
Non-alcoholic beverages are more popular than
ever. Social media and other digital channels have led to the extensive sharing
of brand content, which has created a huge scope for industry players in the
non-alcoholic market to tap new potential customers. Consumers between the age
of 18 to 34 are more likely to discover new foods and beverages on social media
channels and be easily influenced to purchase them. The excitement among
consumers for trying something new and sharing the experience on social media
has led to the rising adoption of innovative drinks that do not necessarily
contain alcohol. Besides, celebrities and bloggers endorsing functional beverages
for their health benefits has largely influenced their adoption among general
audiences. Purchasers are prioritizing the purchase of sustainable and vegan
products to reduce their impact on the environment. Moreover, the e-commerce
platforms have reinforced brands to be more transparent about the kind of
ingredients used in non-alcoholic beverages, which is helping the
health-conscious population to find a drink of their choice, which is
chemical-free, healthy, and without artificial flavors. As consumers would
continue to delight in creative and trendy drinks with alluring aesthetics and
flavors, the non-alcoholic beverage market will continue to register steady
growth in the coming years.
Sober Generation Leading the Non-Alcoholic
Beverages
The customers of non-alcoholic beverages are
the young, trendy, educated, high-earners, and eco-conscious youth that have
the power to make or break any brand. Although millennials are credited with
initiating the mindful drinking and sober-curious revolution, Gen Z has
actually pushed the movement over the edge. Well-educated on the matter of
physical wellness and mental health, Gen Z knows the downsides of alcohol, and
hence they are less likely to drink alcohol than millennials or baby boomers.
According to TechSci
Research report, United States Non-Alcoholic Drinks
Market By
Product Type (Carbonated Drinks and Non-Carbonated Drinks), By Packaging Type
(Bottle, Can, Others (Tetra pack & Pouches)) By Distribution Channel
(Supermarkets/Hypermarkets, Convenience Stores/Forecourt Retailers,
Departmental Store, Online, Others (Grocery Stores, Independent store, etc.),
By Region, By Company, Forecast & Opportunities, 2026, the United States non-alcoholic
drinks market is anticipated to grow at a formidable rate. The growth can be
attributed to the increasing shift towards a healthy lifestyle and high
disposable income. Besides, companies are launching new varieties of drinks
with different flavors and tastes, which is propelling the demand for
non-alcoholic drinks in the United States.