Why non-alcoholic beverages can be a growth category for brands

Have you had a drink yet this year? For a growing number of Americans, the answer to that question is no—and they’re not going to drink again until February. They’re embracing the Dry January movement, which along with Sober October makes up the detoxing bookends of the often-indulgent holiday season. Such planned sobriety periods—along with health concerns—are helping drive the recent explosion in the low- and no-alcohol beverage market, which includes near beer, mocktails, kombucha and CBD-infused drinks. Sales of alcohol alternatives shot up 30% in 2023, surpassing $500 million. Analysts project that the zero-alcohol alternative drinks market will grow by more than 25% through 2026 with low-alcohol beverages growing at a smaller but still healthy 5.9%. Read more: How brands are cashing in on non-alcoholic products To be clear, the U.S. still loves to drink. More than 7 in 10 Americans over the age of 21— including strong majorities across generations, genders and ethnicities—consume alcoholic beverages, according to a recent Harris Poll survey. Only 28% of respondents drink a mock alcoholic alternative at least occasionally—more than twice as many say they have never tried one (70%). Ad Age Best Places to Work 2024 50 companies doing a standout job See the full list here Taste is the main reason people turn to alternative beverages, according to our poll: 33% of Americans cited it as the main reason for doing so. But a desire to limit alcohol consumption was the second most prevalent reason, at 30%, with nutrition conditions tied for third (along with cost) at 25%. One other factor is causing mocktail growth: A majority (51%) of people who participate in dry spells such as Dry January feel uncomfortable abstaining when others around them are drinking. Having something alcohol-like, if not actually alcoholic, may mitigate that discomfort. All of this raises the question about this growing industry: How can it break out of the sober months and increase its presence year-round? We spotted three more trends in our survey to help answer that question: Mocktails can be a healthy compromise Americans love drinks but are aware of their negative health effects. The International Agency for Research on Cancer has long since classified alcohol as a Group 1 carcinogen; other substances in that cohort include asbestos, radiation and tobacco. Americans, especially emerging from COVID, have a renewed understanding of the importance of good health choices. And, perhaps not surprisingly given the pandemic-era boozing uptick, a majority of Americans (54%) said that they have decreased their drinking in the last year. Related: 11 Dry January marketing campaigns and products That explains the growing popularity of detox months such as Dry January—whose current incarnation is only a decade old). Those who participate in sober periods report more frequently that they have tried alcohol replacement drinks (52% reported doing so, as compared to 28% of the general population). The decision to drink mock alcohol drinks is also fueled by wellness concerns: 25% of mocktail drinkers cite nutritional considerations in their decisions to consume, compared to 21% who reference existing health conditions and 20% who dislike the side effects of alcohol consumption. Super Bowl commercials Tracking the latest brand and agency plans Enter here Either way, it illuminates an opportunity to frame mocktails and their brethren as paths to a healthier lifestyle without having to entirely embrace teetotaling. Millennials and Gen Z mix it up The mocktail market has a definite generational flavor. Nearly half of millennials and drinking-age Gen Zers (47%) have tried an alcohol replacement, which is twice that of Gen Xers (24%) and nearly four times the number of boomers (12%). At three in five (59%), the youngest generations also over-index compared to Gen X (51%) and Boomers (50%) in decreasing alcohol consumption over the past year, participating in designated sober periods (41% vs. 29% and 13%, respectively) and feeling uncomfortable not drinking when others are (46% vs. 34% and 23%, respectively). On the whole, millennials and Gen Zers seem to be more concerned about their relationship with alcohol than their older counterparts. Mock alcoholic beverages allow younger adults to participate in the social ritual of drinking, reduce anxieties related to not drinking when others are—and still be mindful of their health. If they retain these habits throughout their lives, it will signal a sea change in American consumption habits. Parents lead the way Alcohol alternatives are especially popular among parents of children younger than 18. More than half of all parents (58%) report having reduced their alcohol consumption in the last year, and 45% say they drink mock alcoholic drinks, compared to just 22% of those without children under 18. Why do parents seek such alternatives? Parents drinking zero-proof more often do so because they enjoy the taste (40% vs 27% of non-parents of kids under 18), the cost implications (30% vs. 20%) and because they dislike alcohol’s side effects (23% vs. 17%). Parents might be more receptive to marketing from mock alcoholic beverage brands as these drinks allow them to more easily and safely balance their desire to have fun with their significant financial and familial responsibilities. The bottom line: Americans are tweaking their social mix—and that’s creating a new opportunity for companies and brands. Cheers!

Why non-alcoholic beverages can be a growth category for brands

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