The zero percent alcohol market expands before Christmas

November 23, 2022 — As the holiday season approaches, the beverage industry expects increased sales as consumers stock up on alcohol. However, producers are increasingly responding to consumer demands for zero-percent alcohol options, as Generation Z leads the ‘moderate drinking’ space. Younger generations still demand full flavors but with less alcohol, as health priorities exceed alcohol consumption levels often associated with older generations.

As the desire for low-alcohol and non-alcoholic drinks spreads, the industry is taking notice and investing in products aimed at consumers eager to celebrate on their own terms.

Exhausted
Some of the biggest players in the industry are moving into the zero percent market.

Earlier this month, Keurig Dr Pepper, the beverage conglomerate that owns 7UP, Snapple and mocktail makers Atypique, made a minority equity investment in non-alcoholic brewer Athletic Brewing.

This purchase marks an expansion of Keurig Dr Pepper and the growing interest of the beverage industry in general for low and no alcohol strengths.

Growing consumer demand for zero percent alcohol options continues to expand within the beverage market. speaking to FoodIngredientsFirstChris Furnari, communications manager for Athletic Brewing, points out the impacts of the current low-alcohol trend.

“A growing number of drinkers are cutting back on alcohol, in large part because they are discovering the harmful side effects of consuming alcohol too often. A recent Gallup poll found that 71% of Americans believe that alcohol negatively affects them,” she says.

“We have also seen recent data suggesting that nearly half (46%) of American drinkers are actively trying to cut back. Yet 80% of our consumers still drink alcohol. They’re just being more aware of when they decide to drink.”

This reduction in alcohol consumption is contextual but also generational.

“In particular, younger consumers, especially Gen Z, are choosing to reserve their drinking occasions for special events and weekends,” concludes Furnari.

Christmas remains a lucrative period for beverage manufacturers, though demand has shifted from traditional seasonal drinks to tasty non-alcoholic offerings. NPD aimed at developing this market is proving to be effective.

growing demand
Keurig Dr Pepper wants to tap into this consumer market. It presents solid data to support this direction.

“Non-alcoholic beer in the US grew nearly 20% in retail dollars over the past year, with the craft segment, where Athletic Brewing has a 55% market share, far outpacing total category growth “, He says.

Keurig Dr Pepper is backing its direction into the zero percent market with the understanding that consumers still want to drink, just in moderation.

“Non-alcoholic beer accounts for more than 85% of total sales in the fast-growing category of non-alcoholic beer, wine and spirits, as an increasing number of consumers moderate their alcohol consumption,” the company notes. Fueled in large part by Gen Z’s moderation, consumers are showing they’re happy to buy non-alcoholic options.

Keurig Dr Pepper CEO Bob Gamgor confirmed the company’s direction. “Our investment reflects our interest in and ability to navigate exciting white spaces, even in the confusion of the alcoholic and nonalcoholic categories,” he says. “We look forward to partnering with the Athletic Brewing team to help them scale the business.”

Generation 0%
Recent data and research from Innova Market Insights supports the Keurig Dr Pepper analysis. The numbers show underlined how Gen Z is driving growing sales of zero percent beverages.

The market researcher highlighted the potential of this space, highlighting the especially high number of consumers demanding non-alcoholic options. He also points out how this growing market still presents significant opportunities as consumers demand full flavor beverages without the booze.

There has been an increase in NPD within the low-alcohol and no-alcohol sphere, including

Kerry Launches Line of Premium Zero Percent Botanicals for the exclusive market of the teetotaler crowd, hoping to claim their own share within the sprawling zero percent space.

At the beginning of this year, FoodIngredientsFirst spoke with Vicky Berry, Synergy Flavors’ senior manager of European business development, during International Beer Day. At the time, she was interested in noticing the increase in 0% pitches.

“2022 has seen some big launches in this spacesuch as Guinness 0:0 and Peroni Nastro Azzuro 0:0%, the non-alcoholic counterpart of Peroni Nastro Azzuro, which the Asahi Group has reportedly invested €20 million (US$20.4 million) in developing,” said.

by James Davis

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