The non-alcoholic beer market is tapping into a growing demographic seeking a social lubricant without the hangover and health concerns. This surge in popularity is starting to reshape the beverage landscape, proving that you don’t need alcohol to enjoy a cold one.
We just reported that Athletic Brewing Co. announced a $50M investment and a third brewery. Athletic only makes non-alcoholic beer, and it ranked as the 10th biggest craft brewer in America in 2023 by sales volume, according to the Brewers Association definition of craft. Last year, Athletic produced 258,000 barrels of NA beer. That’s an amazing feat, representing the potential for the NA craft beer movement.
For the 52 weeks ending Jan. 28 in total U.S. multi-outlets, Chicago-based Circana data shows dollar sales for non-alcohol beer were nearly $368.7 million, a 29.2% increase, while case sales were up 20.3%.
That’s not just off the shelf. There’s also growth for non-alcoholic beer and drinks at bars and restaurants. CGA by NIQ provides consumer intelligence and data for food and drink businesses with a focus on on-premise sales and trends. According to its recent report, non-alcohol beer sales are outpacing total beer in the United States:
CGA’s OPM service, which tracks the latest trends in US bars and restaurants to help suppliers and brand owners maximize trading, shows total beer sales by value in the 12 months to mid-May were 2.9% down year-on-year. In sharp contrast, the no-alcohol beer segment achieved growth of 33.7%. While beer’s rate of sale dropped 9.4%, rate of sale (RoS) in the non-alcohol segment rose 13.6%.
Of course, we must keep this in perspective. Also according to the report: “The sub-category is projected to hold ~1% total beer On Premise $ value share in western US by 2026.” Andrew-Hummel, CGA by NIQ’s Client Solutions Director:
“While no-alcohol beer remains a relatively small element of US On Premise drinks sales, it’s one of the most explosive categories for growth.”
We keep hearing that folks are drinking less alcohol
NCSolutions is a company that supplies shopping marketing data to help brands better brand and advertise. It also does cool reports. NCSolutions recently surveyed more than 1,000 Americans 21 or older to get their perspectives on drinking and alcohol trends in 2024. That data said 41% are planning to drink less alcohol in 2024. According to the survey:
More Americans are cutting back on drinking in 2024. Over two in five (41%) are trying to drink less, an increase of 7 percentage points from 2023. Younger generations, especially Gen Z, are adopting this approach. Sixty-one percent of Gen Z plan to drink less in 2024, up 53% from 2023 when just 40% felt this way. Nearly 1 in 2 (49%) millennials are also following suit, an increase of 26% from those surveyed a year before.
The rising tide of health consciousness and shifting social norms in the United States is leading more Americans to reevaluate their drinking habits. This shift is reflected in the growing numbers who are embracing non-alcoholic options, and NA beer is a popular option. According to a poll conducted by Morning Consult and commissioned by the Beer Institute in January, more than 58 percent of Americans that participated in Dry January choose low- and no-alcohol beer to help them achieve their goals. Significant investment by brewers across the country has led to new innovations in low- and no-alcohol beer, providing beer lovers with exciting new choices. Of course, events like Dry January and Dry July help. From that same Beer Institute report:
“As many Americans increase their focus on moderate consumption, a growing majority of them are using low- and no-alcohol beer to help them hit their goals,” said Brian Crawford, president and CEO of the Beer Institute. “Brewers are committed to meeting this demand, and as the beverage of moderation, beer’s dominance in the low- and no-alcohol space reflects decades of investment by brewers and an industry commitment to encourage responsible consumption. The beer industry is enabling consumers to enjoy their favorite beers without sacrificing quality.”
Popular styles
There’s definitely more growth to come in NA beer but also in an increasingly competitive landscape, which means beer makers and suppliers will have to work harder and smarter when it comes to styles, techniques and visibility. According to the CGA by NIQ report (remember this in on-premise data):
Pale lager remains the most popular type with a 55% share of the market, and its sales by value have risen by 8.0% year-on-year, but as the segment matures non-alcoholic IPA’s, stouts and blonde ales are gaining share. The most eye-catching growth has come from Indian Pale Ale and blonde or golden ale, where sales have rocketed by 170.9% and 165.5% respectively. Stout has grown 133.9%, though from a smaller base.
Opportunities with innovation
Deschutes Brewery just took home three medals, including two golds, for its non-alcoholic beer brands at the U.S. Open Beer Championship. With over three decades of experience brewing delicious craft beers and delivering award-winning innovations, Deschutes Brewery NA options are crafted entirely in-house through a partnership with Sustainable Beverage Technologies (SBT), utilizing the company’s patented BrewVo technology in combination with Deschutes’ proprietary brewing methods. This is a great example of the opportunities for innovation in the NA segment.
BrewVo enables the production and distribution of beer at 1/6th the traditional weight and volume of normal craft beer. Integrating easily with standard brewing equipment, the BrewVo process produces “Multi-Brewed” beer that has up to six times the ingredient and flavor density of traditionally-produced beer, and it’s made using BrewVo equipment. When blended with water and alcohol later on, this Multi-Brewed beer yields identical flavor and aroma profiles as traditionally-produced beer. Or, brewers can easily create non-alcoholic beer by not adding the alcohol back. According to this article by Trevor Griner via FSR:
SBT creates the condensed beer using a process it refers to as nested fermentation. After brewing a portion of beer, the BrewVo machine removes alcohol and adds a new batch of wort, allowing for additional fermentation. After repeating the process a handful of times, what’s left is a concentrated nonalcoholic beer base, which can then be packaged alongside the removed alcohol.
The condensed beer is packaged in a disposable bag and shipped in a box, making for an exponentially easier transport than kegs. The process is also more environmentally friendly because once used, the boxes and bags don’t have to be shipped back to the point of origin.
It’s an awesome technology innovation that’s working. Deschutes just recently emailed us, noting its non-alcoholic dollar sales are up +434.7 percent in the Total US vs Year Ago and Fresh Squeezed Non-Alcoholic IPA (it’s newest product) is delivering the No. 1 most dollar growth to the non-alcoholic category in Oregon, Washington and Idaho.
It’s still early in the NA game
The landscape for non-alcoholic beer continues to evolve, driven by both consumer demand and innovative brewing technologies. With the market for NA beer still in its nascent stages, there’s enormous potential for growth and innovation, making it a thrilling time for both brewers and beer lovers looking for new, healthier options. As this segment expands, it will undoubtedly continue to reshape the beverage industry, offering exciting opportunities for new flavors, technologies and experiences. We’ll keep you updated.
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