Category on the Rise: Non-Alcoholic Wine, Beer, and Spirits
Driven by consumer desire for ‘better-for-you’ beverages and rise in product innovation, non-alcoholic categories continue to grow
Non-alcoholic (NA) wine, beer, and spirits are nothing new; non-alcoholic beer in particular has been produced for over a century. But the category has experienced marked growth in recent years, driven by consumers’ desire for “better-for-you” beverage options and innovation within the non-alcoholic beverage space.
In 2022, NA categories share on Drizly rose 24 percent year-over-year compared to the same period in 2021. Despite the relatively small size of the category, the significant recent growth makes it one to watch.
“Even if you drink alcohol, there’s a time and place for a really good non-alcoholic beer,” says Samantha Itzkovitz of Brooklyn Brewery, which has offered its non-alcoholic line, Special Effects, for several years. “We realized there was so much stigma surrounding non-alcoholic beers and beverages in the United States, especially surrounding taste, which led us to release a craft alcohol-free beer.”
In 2021, the volume of no- or low-alcohol beverages grew by 31 percent year-over-year, according to a 2022 report by IWSR Drinks Market Analysis. Across the United States, the non-alcoholic market accounts for over $414 million in sales, according to data analytics firm Statista, and the market is expected to expand by over five percent per year from 2021 through 2026 as consumers continue to gain interest in functional wellness beverages.
As the share of sales has risen, so has the number of options: There are now more than 100 non-alcoholic brands available across Drizly, which is 70 percent higher than this time last year.
“Five years ago, the vast majority of these products didn’t exist,” says Marcos Salazar, the CEO of the Adult Non-Alcoholic Beverage Association. “But a lot of entrepreneurs saw the gap and in 2018 [and] 2019 more non-alcoholic options started to come out that were just as good, and in some cases better, than their alcoholic counterparts.”
Who is Drinking Non-Alcoholic Wine, Beer, and Spirits, and Where?
Combined with the growth of health and wellness products, Generation Z and millennial consumers are propelling the NA trend forward.
Salazar notes a number of societal changes that have led to increased interest. Gen Z consumers drink less alcohol, for one, and consumers overall have reevaluated their relationships to alcohol during the pandemic. Additionally, people have been more mindful about the food they consume over the past couple of decades, and that’s starting to show with beverages, too.
Whereas alcohol is often reserved for certain social situations and contexts, those limitations don’t exist for non-alcoholic beverages.
“Younger generations are drinking less alcohol in general,” says Itzkovitz. “A lot of that comes from the desire to just get out there and be able to experience things without having the hindrance of alcohol or over-consumption, not to mention the even bigger macro trend of health and wellness. People are way more mindful of what they are putting in their bodies right now.”
Major metropolitan areas lead in NA sales on Drizly. The top markets that over-index on non-alcoholic sales include Boston, Denver, northern New Jersey, Brooklyn, and Washington, D.C.
NA Beer Is King, But NA Wine and Spirits Are Growing
Over the past 12 months, non-alcoholic beer had a 65 percent share of the category, versus non-alcoholic wine with 26 percent share and non-alcoholic spirits with nine percent. Within the beer category, NA beer now accounts for 1.16 percent share of sales compared to 0.84 percent share in 2021 — a 38 percent increase year-over-year.
Craft brands have recently gained ground over the major brands. Athletic Brewing has five of the top 10 beer SKUs on Drizly in 2022 to date, and Lagunitas joins the list alongside Heineken, Budweiser, and O’Doul’s.
Drizly’s Top-Selling Non-Alcoholic Beer SKUs on Drizly, 2022 to Date
- Heineken Non-Alcoholic 0.0
- Athletic Brewing Run Wild IPA
- Athletic Brewing Free Wave Hazy IPA
- Athletic Brewing Upside Dawn
- Budweiser Zero Full-Flavored Zero Alcohol Brew
- Athletic Brewing -–Non-Alcoholic Seasonal Offering
- Lagunitas IPNA
- Clausthaler Original Non-Alcoholic
- O’Doul’s Non-Alcoholic Beer
- Athletic Brewing – Non-Alcoholic Limited Time Offering
“The spirits side is exciting right now because there’s getting to be a lot more and they’re higher and higher quality,” says Salazar. He also notes the potential for growth in the ready-to-drink category.
Though the NA spirits category is growing rapidly, it’s dominated by a few major brands: Seedlip, Ritual Zero Proof, and Lyre’s. Within the overall spirits category, NA spirits account for a 0.06 percent share of sales compared to 0.04 percent in 2021 — a 50 percent increase year-over-year.
Drizly’s Top-Selling Non-Alcoholic Spirits SKUs on Drizly, 2022 to Date
- Seedlip Grove 42
- Seedlip Garden
- Seedlip Spice 94
- Ritual Zero Proof Tequila Alternative
- Ritual Zero Proof Whiskey Alternative
- Ritual Zero Proof Gin Alternative
- Lyre’s Non-Alcoholic Dry London Spirit
- Spiritless Kentucky 74 Non-Alcoholic Bourbon
- Lyre’s Non-Alcoholic Amalfi Spritz
- Dhos Gin Free
Within the wine category, NA wine accounts for a 0.17 percent share of sales compared to 0.12 percent in 2021 — a 42 percent increase year-over-year. Like with beer and spirits, a handful of companies dominate the best sellers across wine styles. In this case, Fre and Ariel top the list.
Drizly’s Top-Selling Non-Alcoholic Wine SKUs on Drizly, 2022 to Date
- Fre Chardonnay
- Ariel Cabernet Sauvignon
- Fre Sparkling Brut
- Ariel Chardonnay
- Fre Rosé
- Freixenet Alcohol Removed Sparkling Wine
- Fre Merlot
- Martinelli’s Sparkling Cider (Non Alcoholic)
- Fre Cabernet Sauvignon
- Fre Red Blend
Seasonality and Add-on Sales Drive NA Market
“In the past year, the most popular month for sales across non-alcoholic categories was January as a result of the dry January movement,” says Liz Paquette, Drizly’s head of consumer insights. “Retailers should consider non-alcoholic categories as a key part of their stocking strategy and keep a close eye on innovation as more and more products hit the market and consumer awareness grows.”
In order to maximize sales for this category, Paquette recommends retailers bring in some of the top new NA offerings onto the shelf. “Retailers should begin with stocking the top-selling brands,” she says. “It’s a good idea to offer products that are growing in consumer awareness nationally, such as Athletic Brewing, Seedlip, or Fre.”