Almost a fifth of all no-alcohol consumers in 2023 were new entrants to the category
THE latest data from IWSR shows that no-and low-alcohol consumption across the world grew over 5% in volume in 2023, and that the market is now worth over $13 billion.
The no/low-alcohol category is forecast to grow volume 6% between 2023 and 2027, led by no-alcohol at 7%, with low-alcohol expanding by 3% over the same timescale.
Although this marks a slightly slower growth rate from previous years (no-alcohol grew at a volume compound annual growth rate (CAGR) of 8% between 2019 and 2023), the no-alcohol category is continuing to attract new recruits.
Almost a fifth of all no-alcohol consumers in the past year were new entrants; for low-alcohol, the figure is 16%. This trend is especially evident in emerging no- and low-alcohol markets such as the US and Canada. Younger cohorts of legal drinking age (LDA) are recruited the most across markets, with fewer Boomers entering the category.
“As no- and low-alcohol becomes a more established part of the beverage alcohol landscape, growth is slowing after a peak in 2020 to 2021 – but the category is poised for robust gains in the coming years, spearheaded by no-alcohol and persistently strong recruitment levels,” says Susie Goldspink, head of no- and low-alcohol insights, IWSR.
No-alcohol now accounts for two-thirds of no/low-alcohol category volumes, with 72% of that made up of beer/cider.
No-alcohol continues to take share from traditional alcohol, and IWSR expects no-alcohol to command nearly 4% of TBA volumes across the T10 markets by 2027.
Future growth in no-alcohol will be spearheaded by less developed no-alcohol markets, such as Canada, the US, Australia and Brazil. However, the more mature markets of Germany and Spain are each expected to grow at a CAGR of only +2%, 2023-2027, with Japan forecast to grow at +5%.
Millennials remain the largest age cohort among no/low consumers, but in more developed markets – such as Japan, Spain, Germany and France – no/low consumers skew older.
“This translates into how no/low products are purchased and consumed: consumers in these more mature markets drink no/low beverages predominantly at home and tend to have one or two drinks per occasion,” says Goldspink.
“On the other hand, markets with the highest proportion of Millennial and legal drinking age Gen Z no/low consumers – such as South Africa, the US and Brazil – have more varied consumption settings, from home to wellness occasions, on-trade, and at festivals and sporting events. In these locations, they are more likely to have more drinks per occasion.”
Switching between no/low and full-strength
There are signs that people are increasingly looking to switch between no/low and full-strength alcohol, rather than avoiding the latter altogether.
Substituters – those who drink full-strength or no/low depending on the occasion – accounted for 43% of no/low consumers in 2023, up from 41% in 2022. Meanwhile, Abstainers have declined from 19% to 17%.
“This trend is driven by the US and France, where the proportion of Substituters has reached 45% and 50% respectively,” explains Goldspink.
“Across markets, more Millennials are becoming Substituters, with an increase from 41% to 45% in the proportion of Millennials drinking no/low on some occasions and full-strength on others, at the expense of the Abstainer group.”
