Summer's End Signals Shift: No- and Low-Alcohol Drinks Take Center Stage in 2023

As the summer holiday season in the northern hemisphere draws to a close, many revelers may find themselves surprised by the changing landscape of their favorite beverages. While glasses of rosé may have filled their tables, a significant portion of the drinks market is now dominated by no- and low-alcohol options that cater to a more health-conscious and cost-aware consumer base. According to data from IWSR, a leading drinks research group, while global alcoholic drink sales dipped 1 percent by volume last year, the value of these sales nonetheless rose by 2 percent. Strikingly, the U.S. market witnessed a 2 percent decline in spirits volumes, marking a notable shift in a sector traditionally viewed as resilient. Conversely, the no-alcohol segment has seen explosive growth, with U.S. no-alcohol volumes surging by 29 percent and global no-alcohol beer volumes increasing by 6 percent in 2023. Growth projections for no- and low-alcohol drinks predict an expansion roughly five times greater than that of traditional alcoholic beverages from 2023 to 2028. This trend, often referred to as the "mainstreaming of moderation," reflects not only the tightening of household budgets amid rising living costs but also a generational shift toward health-conscious consumption. Over the years, the drinks industry has aggressively pushed premium brands, but now consumers, particularly millennials and Generation X, are reevaluating their drinking habits. A recent report indicated that nearly a third of British 18- to 24-year-olds are drinking less compared to the previous year, with 13 percent opting for complete abstinence. The "sober curious" movement encapsulates this shift, where young people increasingly view abstaining from alcohol as a form of exploration rather than deprivation. Factors contributing to this trend include a backlash against drunkenness, heightened awareness of health issues, and financial pressures such as student debt and soaring housing costs. Many young individuals, who curate their lives online, are also mindful of avoiding the pitfalls of excessive drinking that could lead to embarrassing moments or impaired judgment. In addition to exploring no- and low-alcohol options, younger generations are gravitating toward cheaper alternatives that promise a more manageable experience. Cannabis use among 18- to 34-year-olds in the U.S. has nearly doubled in the past decade, while "functional" beverages infused with CBD, adaptogens, or nootropics are becoming popular as they offer various purported benefits without the hangover associated with traditional alcoholic drinks. For manufacturers of alcoholic beverages, there is still promise amid these changes. Many are becoming adept at crafting no- and low-alcohol drinks that closely mimic the taste of their alcoholic counterparts, enabling them to market these products as sub-brands of established labels. Notably, IWSR reports that the biggest competition for no-alcohol options isn't traditional alcoholic beverages but other non-alcoholic drinks like water and soft drinks. As this trend continues, some may lament the shift toward alcohol-free alternatives, feeling it represents a broader societal move away from traditional indulgences. Yet, for those who must limit their alcohol intake due to health, lifestyle, or ethical reasons, the availability of satisfying substitutes that replicate the flavor and experience of drinking serves as a positive development. Furthermore, if the rise of these alternatives promotes moderation and mitigates the negative consequences associated with excessive drinking, it may indeed warrant a toast with a glass of alcohol-free prosecco. The drinks industry stands at a crossroads, and how it navigates this changing terrain will define its future.