If consumers are drinking less alcohol, what are they drinking and what should alcohol companies do about it?

For the past few years, we’ve continued to see the trend of consumers’ shifting attitudes toward alcohol, and behaviors related to its consumption. Morning Consult recently reported that 19% of Americans said they were giving up drinking in January 2022, compared to 13% in 2021 and the 11% who said they have done so in previous years. Generational attitudes are changing; it has been widely reported that millennials are the generation driving alcohol-free consumption, with Gen Z following suit. 

The beginning of every new calendar year brings the hope of a fresh start, a new beginning, and the resolution to improve on those behaviors consumers want to evolve. That goes for businesses as much as it does for consumers. On the consumer side, Dry January, a ‘sober-curious’ movement said to have been created in the UK, provides a healthy challenge to those wishing to abstain from alcohol for a month to kickstart the new year. And it’s not just Dry January driving sales of no- and low-alcohol (NoLo) products, or its fall counterpart, Sober October. It’s a broader and increasingly larger segment of “sober-curious” consumers that are bolstering the category growth as well.  

This trend is not slowing down either. A NielsenIQ omnibus survey conducted in 2021 revealed that 22% of consumers reported they were cutting back on alcohol and drinking less. Why? Looking for healthier lifestyles and alternative non-alcoholic beverages.

Most of the major alcohol operators have a growing position in the category, including Heineken, AB InBev, and Molson Coors. The space has also been wide open for startups like RationAle Brewing, which is focused on creating non-alcoholic craft beer, and Surely non-alcoholic wine. The continued growth of health and wellness-minded adults is likely to drive innovation in the low- and non-alcoholic beverage sector. Brands can leverage the shorter-term opportunities like Dry January and Sober October to insert themselves into the cultural conversation to drive brand awareness and conversion, so long as they are bringing products to market that consumers want. Consumers are being more thoughtful and intentional about their beverage choices and allocating that “share of buzz” is the new norm.

Getting Innovation Right

Given that buzz-less beverages will continue to be one of the biggest trends of 2022 and into 2023, brands are looking to innovate to enter this niche. While the size of the market is relatively small today, it is a priority for manufacturers trying to figure out how to successfully play in this space. Companies will need to be mindful of consumer sentiment and competitive differentiation. What is at the core of this new consumer demand remains the stewardship of the brand, to deliver on taste, quality, and experience.  

So what can create that differentiation? The premiumization of adult alternative beverages. This focus on complex and more sophisticated flavors also speaks to consumers’ demand for products and experiences to feel “premium”. An analysis of the alcoholic beverage industry by The IWSR estimates that the global market share by 2024 of premium or “super-premium” alcoholic drinks will be 13%, providing a good indication that customers will continue to choose quality over quantity. Some say the key to a good non-alcoholic beverage is a good alcoholic beverage. In order to build a premium beverage, you need to start with a premium, alcoholic base and then by leveraging dealcoholization solutions it provides a solid foundation.  

With interest in no- and low-alcoholic beverages continuing to grow, there will be plenty of room for everyone. Competition will increase, and beverage companies big and small can push to deliver the best and most innovative offerings to consumers. Offering a path to moderation provides new opportunities for consumers to make safe, smart, and responsible decisions, which is a good thing for all. So as consumers lean into more moderate drinking behaviors and healthier lifestyles, how are you meeting them in the market? Whether you’re a large beverage platform looking for a partner to provide premium dealcoholization services, or an entrepreneur looking to build a brand from idea up, BevZero can help you navigate the rapidly changing landscape of low and no-alcohol adult alternative beverages. Ask us about our white label program and full suite of services.