The Thirst for Alcohol-Free Beer Continues to Grow Globally as Health Consciousness Rises Among Consumers

Over the past decade, adverse health effects of alcohol consumption have swayed many consumers away from traditional beer towards a more sober lifestyle. This shift paved the way for rising demand for alcohol-free beer, which resembles its traditional counterpart in appearance and taste but has more nutritional benefits. Initially, this category attracted older consumers, 55 years and above; however, in recent years, the 25 to 34 age group, comprising 41% of all beer consumers, has begun to switch to low or alcohol-free beer brands, according to Informa. Growing awareness of the benefits of alcohol-free beer has significantly increased the sector's growth. As a result, global non-alcoholic beer sales are expected to reach USD 20.16 billion in 2023, rising by 9.3% compared to USD 18.44 billion in 2022, according to Global News Wire.

North America remains the largest market for alcohol-free beer, with increasing demand for premium quality healthy drinks influencing consumer choices. Thus, alcohol brands have launched healthier alcohol-free options to tap into this market. For example, US-based alcohol-free beer manufacturer UNLTD IPA launched a vegan and gluten-free beer with only 13 calories per bottle in 2023.

Source: UNLTD IPA

Continuously growing demand has supported alcohol-free beer sales in convenience stores in the US, which rose to USD 7.7 million for the quarter ending Feb 26, 26.4% more than the previous quarter, and for the year ending February 2023, sales were up 13.4% to USD 35 million compared to the previous year. During the same period, retail sales in the US were up 20.50% YoY in February, reaching USD 255 million.

In Europe, taste reigns supreme when it comes to beverages. As a result, recent technical brewing techniques have improved the quality of alcohol-free beer compared to traditional dealcoholization processes that resulted in flavor loss. These technological advancements led to increased sales growth, with non-alcoholic beer sales in Europe expected to rise by 6.5% in 2023 to USD 9.32 billion compared to USD 8.75 billion the previous year. According to the Brewers of Europe association, alcohol-free beer now makes up 6% of the European beer market, compared to just over 3% a decade ago. Essentially, one in every 15 beers sold in the bloc is non-alcoholic, and this growth is forecast to continue.

In Asia and the Oceania regions, the trend is similar. China remains one of the largest markets for alcohol-free beer, with sales expected to reach USD 6.9 billion in 2023. Japanese company Kirin launched the Kirin Ichiban Zero Sugar​ beer in 2020, selling more than 100 million cans to date, the fastest sales of a new beer product in over a decade. Over the past five years, low-alcohol beer sales in Australia have grown at a rate of 30% yearly and are forecast to grow at a CAGR of 14% over the next three years, reaching USD 2 billion in 2026, according to Wine Australia.

The biggest growth challenge in the sector is visibility as consumers are not fully aware of the different alcohol-free options and where to purchase them. Quick to catch on, major brands have realized this and have made improvements in mainstream advertising and increased the number of outlets serving alcohol-free beers and menus. Consequently, many sober bars and non-alcoholic bottle shops have spread in most regions globally over the past year. For example, Boisson, a chain of non-alcoholic bottle shops, opened over ten locations in the US. In 2021, Nix and Nix opened the first non-alcoholic bottle store in Europe. The trend is growing even more, with several similar establishments recently opening in the UK, such as Torstigbar in Brighton and Club Soda in London.

Source: Boisson

Tridge expects the current marketing year to continue the positive growth trend of preceding years as companies in this space are implementing several strategies to ensure continued sales growth. These include creating unique flavors from high-quality ingredients and designing premium "adult-friendly" packaging, such as the dark-colored packaging used by UNLTD IPA on its vegan beer and the boxing-themed packaging used by Corona on its Corona Extra line. For example, in 2023, Athletic Brewing created a new type of sports- and activity-centric branding for the category and formulated craft-inspired flavours such as Trailblazer Hoppy Helles and extra dark stouts. Consequently, alcohol-free beer sales are expected to grow at a CAGR of 9% between 2023 and 2027, compared with only 2% for the low alcohol category, pushing sales up to USD 28.79 billion by 2027, according to the International Wine and Spirits Record.

Source: Tridge, International Wine and Spirits Record

For further reading, follow the links below:

1. US Demand for Alcohol-Free Beverages Grows as The Holiday Season Draws Near

2. W17: Wine Update