Alcohol companies are pouring new investment and marketing into non-alcoholic alternatives as they chase a new class of abstainers and mindful drinkers and navigate a calendar that now features Dry January and Sober October.

Companies aren’t letting the challenge go to waste, attacking the opportunity behind their best brands, proudly pushing booze-free versions of everything from Budweiser to Captain Morgan, with new brands from White Claw, Blue Moon and Sierra Nevada on the way.

Globally, non-alcoholic drinks accounted for $17.7 billion in sales last year, or about 1% of the total alcohol market, according to Euromonitor data cited by Bernstein. Non-alcoholic beers account for 89% of that, followed by wine (7%) and spirits (4%). The trend is growing fastest in the U.S., where non-alcoholic beers over the last five years have grown at a 29.7% compound annual rate, accounting for $588 million in sales in 2022, Bernstein said. Non-alcoholic spirits accounted for $82 million in U.S. sales last year, the report stated.

The rise in moderation is a seeming blow to alcohol brands as many are battling soft sales of their full-strength booze and beer. But brands note that much of the growth of alcohol-free beverages has come at the expense of waters or soft drinks, providing incremental customer growth, much of it from younger legal-age consumers. And by taking on the trend behind their biggest names, alcohol-free brands are supporting the move toward “premiumization”—or outsized growth among items with higher price points.

New attitudes

After years of relegating their non-alcoholic selections to a dusty corner of their portfolios, beer companies today are brewing better-tasting non-alcoholic beers using their most prestigious brands, and are marketing them behind properties once reserved for full-strength beers, such as sports.

The non-alcoholic beer category’s biggest U.S. brands—Heineken 0.0 and Athletic Brewing, respectively—are credited with helping to ignite the new era of non-alcoholic beers. Heineken has been conspicuous for its heavy marketing of Heineken 0.0, including the non-alcoholic adult beverage category’s first Super Bowl ad earlier this year. The spot, starring Paul Rudd, was part of a larger partnership with Marvel’s Ant-Man movie franchise.

Athletic has opened eyes with its range of non-alcoholic styles and flavors, which it promotes through active lifestyles.

More: Athletic Brewing beats beer giants in the nonalcoholic game

“Heineken 0.0 and Athletic have really changed what non-alc is, and changed things for a lot of other brands,” said Jenn Litz-Kirk, director of content for Beer Business Daily, an industry newsletter. Hundreds of non-alcoholic beers have since arrived in the U.S. and continue to roll in: Molson Coors’ craft brand Blue Moon will introduce an alcohol-free version in December, as will the craft giant Sierra Nevada, which will have two non-alcoholic styles.

Heineken execs said as much as 50% of the volume of its Heineken 0.0 brand is sourced from outside beer. Heineken launched 0.0 in 2017 in Europe and brought it to the U.S. in 2019. Today it is the best-selling non-alcoholic beer in the U.S., according to the brand.

“0.0 beer has always been there, but it was stagnant, it was low quality, it was bad taste, and it was not growing,” Dolf van den Brink, Heineken’s CEO, said during the brewer’s Capital Markets Day event in December. “And basically, almost every single market where we have launched Heineken 0.0, we have premiumized … and we have ignited growth.”

Also read: Heineken’s $100 million low-calorie beer launch

Companies guard their brewing secrets carefully but collectively appear to have turned a corner on non-alcoholic quality and taste in the last five years, leaving behind the reputations of yesteryear’s brands such as Anheuser Busch-InBev’s O’Doul’s and Molson Coors’ Sharp’s. The beer rating site Beer Advocate shows O’Doul’s with a score of 51 and Sharp’s with a 46—both “awful” ratings, according to the site. But reviewers are kinder to their newer styles: AB InBev’s 2020 release Budweiser Zero gets a 72 or an “okay” rating; Coors Edge, released in 2019, also gets a 72. Athletic Brewing’s Run Wild IPA gets a “very good” rating of 85 and Diageo’s Guinness 0 scores a “very good” 86.

The real change has been consumer attitudes about non-alcoholic beer, said Litz-Kirk. “It’s not like O’Douls’s that you drink that because you can’t drink alcoholic beer, and is a bit of a compromise,” she said. “It’s like, this is actually a cool brand, and I drink it because I want to drink it.”

Diageo is also investing heavily in non-alcoholic liquor and beer, including Guinness 0— a sober version of its iconic Irish stout. The brand’s “Holding Out for a Zero” commercial, which rolled out in Europe earlier this year (where the beer is known as Guinness 0.0), went live in the U.S. via paid and organic media this month and will run nationally through February. 

Wearables tell the story

Consumers—particularly younger ones—increasingly believe even moderate amounts of alcohol are detrimental to their health. According to a Gallup survey this summer, 39% of Americans said that consuming two drinks a day is bad for one’s health—that belief has increased by 11 points since 2018, Gallup said, and by 18 points among those aged 18-34.

Approximately 30% of legal drinking-age consumers don’t drink alcohol at all, Michelle St. Jacques, chief commercial officer of Molson Coors, said in a recent investor presentation. Gen Z, St. Jacques added, is drinking 20% less than their millennial forebears at the same age.

Canadian authorities this year introduced new guidelines recommending no more than two drinks a week to reduce the risk of cancer, heart disease and stroke. The U.S. currently recommends a limit of one drink a day for women and two for men.

These kinds of stats are what give Athletic Brewing the confidence that non-alcoholic beers in the U.S. could one day approach the 10% to 20% penetration levels of countries such as Spain and Germany. 

“The consumer today really has so much more information on what alcohol does to their body, and how it affects their sleep and how it affects their diet and all these things,” Andrew Katz, chief marketing officer of Athletic Brewing, said in an interview. “So in the past, you kind of knew, but now with wearables, you know what happens definitively. If I have three drinks, and then I look at my sleep score, and my sleep was terrible. So you know these things now. So a lot of younger consumers are just much more attuned to what alcohol does to their bodies.”

Athletic ads, from agency Fair Folk, focus on the moments customers are introduced to the beer.

Attack and defend

The trend of consumers dialing back their alcohol intake is behind the new strategies taken by alcohol marketers such as Molson Coors that have embraced a “total beverage” vision, or expanding their offerings beyond alcohol. The change in drinking preferences is forcing the company to “defend” traditional beer occasions through non-alcoholic brands such as Coors Edge, Peroni 0.0. and the forthcoming Blue Moon Non-Alcoholic, said St. Jacques. But the trend also gives the company the opportunity to “attack” by expanding nascent beverage brands outside the alcohol world such as Zoa energy drink. Zoa was co-founded by Dwayne “The Rock” Johnson. Molson helped launch it in 2021 and recently expanded its investment in the brand, which reported  $100 million in sales in 2022.

In an interview, Courtney Benedict, VP of marketing for above-premium beer at Molson Coors, said consumers are looking for “flexibility and options” when they drink today. “The vast majority of consumers aren’t swearing off alcoholic beverages when it comes to social situations and drinking occasions, but they are looking for more flexibility in those moments,” Benedict said. “So, with non-alc beer, we’re focusing on meeting consumers where they are, even during occasions that typically include alcohol.”

Blue Moon Non-Alcoholic Belgian White—which will hit store shelves in time for Dry January—is part of a revamp of the Blue Moon brand. The revamp includes a rebranding of lower alcohol and lower calorie Blue Moon Light Sky, now called Blue Moon Light, and packaging that will help the brand better stand out in displays, Molson Coors execs said. Blue Moon was chosen for a non-alcoholic version because of consumer trust in the brand and its distinct flavor profile, Benedict said. The above-premium positioning also makes sense to meet the “premiumization” trend.

“We felt like there was an opportunity—a white space in the non-alc category—for some more premium brands to show up … to bring that trusted brand, plus authentic flavor that drinkers already know and love to that space as well,” Benedict said.

Though details are still to be announced, Benedict said a big launch campaign is in the works.

“You can expect TV, online video, retail programming, out-of-home,” said Benedict. “We really want to make sure that consumers are clear that from their No. 1 craft beer brand Blue Moon, which is a trusted brand for them, they can get both options [alcohol and non-alcohol].”

AB InBev in 2020 introduced Budweiser Zero, co-founding the brand with NBA legend Dwyane Wade, who was said to influence its look and appeal to athletes (the company declined to say whether Wade is still involved with the brand). Budweiser Zero was the first non-alcoholic selection under the Budweiser brand; AB InBev also markets Busch NA, O’Doul’s, Stella Artois Liberte and craft brands Golden Road Mango Cart NA and Karbach Free & Easy in the alcohol-free space. In a statement to Ad Age, the company said consumers are looking for non-alcoholic options from brands they can trust.

Sports focus

Many non-alcoholic brands are putting their media behind sports. Formula 1 has been a hotbed of alcohol-free activity, with Heineken 0.0 sponsoring top driver Max Verstappen and Peroni 0.0 sponsoring the Aston Martin team. Most recently, F1 driver Lewis Hamilton introduced Almave, a non-alcoholic blue agave drink that is meant to be like tequila, only without the booze. (Tequilla is a protected denomination in Mexico). Almave is owned by Casa Lumbre Group, a Mexico-based spirits company.

Guinness 0, meantime, is relying on football firepower. It teamed with NFL legend Joe Montana and current star Joe Burrow in a preseason ad.

And when alcoholic beer was abruptly banned from eight stadiums hosting World Cup games in Qatar last year, scuttling Budweiser’s marketing plans, Budweiser Zero was there to pick up at least some of the slack.

The number of non-alcoholic brands actively sponsoring sports has doubled, according to sponsorship consultancy SponsorUnited. As a result, two brands that once dominated such sponsorships, Heineken 0.0 and Budweiser Zero, are seeing more competition. 

Alcohol-free beer is also becoming a bigger player at sports facilities. SponsorUnited found 212 sports venues that served non-alcoholic beer in 2022, up from 122 places the year before.

“[Non-alcoholic beer] is almost like a new category coming out that [sports teams and organizations] weren’t getting a lot of money out of,” said Bob Lynch, CEO of SponsorUnited. “Teams are really excited to do things in this space because they know they have fans who want to have a good time and don’t want to drink. ... That’s the big challenge of going to a sports stadium—how do you feel like you’re a part of the action if you don’t want to drink.” 

Athletic Brewing, which grew behind a strategy of advertising at road races, triathlons and other participatory sports events, has also moved toward team sports properties. It sponsors the Premier Lacrosse League and AVP volleyball and has crafted NIL deals with college athletes from the University of Southern California, the University of Texas and the University of Florida.

“We feel if we’re able to destigmatize the beer with cool kids—a lot of the big men and big women on campus—that it legitimizes that it’s cool for me to drink,” Katz said of the NIL program. “And that helps us get over a lot of barriers and a lot of the baggage that comes along with this category.”

At the same time, Athletic is trying to broaden its reach beyond athletes, to “active improvers,” or people making small lifestyle changes that don’t involve competing in endurance sports. For that, the brand intends to explore properties including music and food, Katz said.

Recent news: Coors Light seeks to win with more music fans

Katz suggested that Athletic’s business model, which involves making only non-alcoholic beer, separates it from the competition. "This is all we do every day, and for everybody else, it’s basically a hobby,” Katz said. “Ninety-nine percent of what they’re selling has alcohol in it; 100% of what we’re selling has no alcohol in it. … One of the hallmarks of our brand is getting out in front of the consumer. Sampling is still very much at the core of what we do. We will have done about a million samples this year.”

A whole new way of drinking

Diageo’s growing non-alcoholic portfolio includes alcohol-free Gordon’s and Tanqueray gin— and in late August it unveiled a booze-free version of Captain Morgan rum, which for now will be sold in Europe. A new ad stars content creator Nicholas Fraser, who challenges people to stop and think before they ask a friend why they’re not drinking.

Diageo also markets the upscale Seedlip, a distilled non-alcoholic spirits brand that this month launched a campaign designed to educate consumers about its offering.

“A non-alc Guinness is an intuitively easier to understand proposition perhaps, than a non-alc spirit,” said Nick Rowland, senior marketing manager for Seedlip. “I think our job at Seedlip is just kind of getting the message out there, driving education that this product can really play a role in your life, and you can make some great tasting non-alcoholic cocktails.”

Seedlip’s new marketing campaign, called “Choose Different,” stars actor Regé-Jean Page.

“We’re quite proud about the fact that we aren’t a non-alc gin, we aren’t a non-alc vodka, we aren’t a non-alc rum,” Rowland said. “We actually are a whole new way of drinking. And I think the campaign really capitalizes on that.”

Mark Anthony Brands, whose White Claw brand is a leader in the hard seltzer category, is planning to enter the non-alc space behind White Claw next year, according to reports from the brand’s distributor meeting this month. CEO Anthony von Mandl touted White Claw 0% as the “symbol of a smart, healthy decision that makes you even more interesting and possibly even more attractive,” according to an account in Beer Marketer’s Insights. “The potential for such a drink is staggering.”

While the health and wellness trends driving the move to moderation show no signs of letting up, other forces—including variety—may also be at work.

“You go to any bodega in New York and the variation of products that are on offer, is pretty amazing,” said Rowland. “I think we’re generally in a period where people are really interested in trying new, different things and having a new and different experience with what they drink.”