For a long time, “you almost had beer, which was kind of a joke,” said Duane Stanford, editor of Beverage Digest. “People would drink them discreetly. And now that has completely changed.”
Seedlip “started gaining momentum a few years ago and continues to this day,” said Lizzy Freier, director of menu research and insights at foodservice consultancy Technomic.
Seedlip mentions on drinks menus are up 100% year-over-year, Freier said, adding that “we’re now seeing some new non-alcoholic spirits popping up in the market, particularly in independent restaurants.”
Non-alcoholic alcohol alternatives are still a tiny market compared to regular alcoholic beverages. But while alcohol sales are declining, sales of their non-alcoholic counterparts are increasing.
For the year ended May 14, U.S. retail sales of soft liquor grew 116% to $4.5 million, according to NielsenIQ. Alcoholic spirits sales fell about 1% to just under $21 billion.
During the same period, non-alcoholic beer was up 21% to $316 million and non-alcoholic wine was up 20% to $50 million. Traditional beer sales were down 4% to about $46 billion, and alcoholic wine sales were down 6% to nearly $20 billion.
Stanford sees it this way: As interest in non-alcoholic alternatives increases, brands need to deliver better products as more of them come to market.
“There is now a real market power developing these solutions and really working on them,” he said. “There’s money to be made. So people find out.”
But Stanford added, “I wonder what the natural upper limit for these products is because they don’t have the functionality of alcohol.” In other words, how many people really want alcohol without the hype?
Go out but drink less
Demand for non-alcoholic alternatives has been driven largely by younger consumers who want to drink less but aren’t interested in giving up alcohol altogether, Stanford said.
“They’re not necessarily teetotalers. In fact, most of them aren’t,” he said. “They drink alcohol, but they’re just trying to moderate it.”
Of course, these drinkers could always reach for a soda or a lemonade. But soft drink manufacturers are positioning their products as more refined and tastier. And with colorful tins and festive packaging, they’re designed to help non-drinkers blend in.
“The biggest market play we’re seeing is this emphasized idea that customers can still get together, party and enjoy a good drink while still abstaining from alcohol, whether for lifestyle choices or personal reasons,” Freier said.
Erin Flavin ate more than she wanted during the pandemic. So in October 2020, she decided to quit drinking. Fed up with seltzer, she explored other options.
“I started with teas,” she said. She discovered Rishi Tea & Botanicals, which makes a line of drinks with “sparkling botanicals.” They come in flavors like grapefruit-quince, dandelion-ginger, and elderberry maqui, which are made from red wine grape skins.
“I drank that a lot, in a nice glass, and by the end of the night I still had my little ritual,” she said. “That really helped.”
Last year, she started selling some soft drinks at her hair studio Honeycomb Salon in Minneapolis. She plans to open a non-alcoholic liquor store soon.
While some, like Flavin, have been taking stock of their drinking habits during the pandemic, others have been considering alcohol alternatives for years.
Non-alcoholic beers are getting smart
For Ben Jordan about a decade ago, finding something tasty but non-alcoholic to drink when he went to gatherings during his grad school was a challenge.
“I wanted to drink beer at parties and social settings, but I didn’t want the effects of ethanol,” he told CNN Business. Back then, the non-alcoholic beer options were “pretty bad,” he said.
So he went looking for a solution and ended up co-founding ABV Technology, which sells and rents machines that remove alcohol from beer to enable craft breweries to be a part of this trend. ABV Technology also offers its products to distilleries and wineries. The company was founded in 2017 and Jordan is its CEO.
A surprising incentive for craft brewers to invest in non-alcoholic beers? The hard seltzer craze.
Once ABV Technology’s machines have removed alcohol from beer, this liquor can then be used for hard seltzer. For a brewer, this offers the opportunity to make two products out of alcoholic beer: non-alcoholic beer and trendy Hartselzer.
Jordan predicts that alcohol-free beer in the United States could end up accounting for one-fifth of the entire US beer market.
“Things are looking very positive for the non-alcoholic beer industry right now,” he said.
Bottles of non-alcoholic liquor range from $20 to $30 on Amazon. And a can of non-alcoholic beer costs about the same, if not more, than a can of regular beer of the same size, Jordan said.
Some of the population might be willing to pay that amount for that alternative, Stanford said.
“Aspiring, young consumers who want these types of products for certain lifestyle reasons — as long as you’re giving them quality and something they actually want to hold and be seen, they’re going to pay those prices,” he said.
But bring money-conscious skeptics on board? “The challenge is convincing them that the quality is there,” Stanford said, “that they’re going to look cool when they drink it, and they’re going to want to be seen with it.”