New York, CNN — The US surgeon general’s warning that alcohol is a “well-established, preventable cause of cancer” may be a wake-up call for millions of Americans, but for big beer and spirits companies, it’s a worst-case scenario they’ve been preparing for over the years.
Major brewers, including Molson Coors and Anheuser-Busch InBev, and spirit giants such as Diageo and Pernod Ricard, have grown their portfolios with new non-alcoholic drinks to attract an increasing number of consumers, particularly younger ones, who are ditching drinking due to health concerns.
A Gallup poll found that almost half of Americans believe that having one or two drinks a day is bad for health, with younger adults being most likely to say that drinking is bad for health. The poll also showed that just 58% of adults drink alcohol, down from 67% in 2022.
However, this trend doesn’t predict a doomsday scenario for Big Alcohol. In fact, it could be good for their bottom lines, as a December report from IWSR, a leading drinks analysis firm, said that the non-alcoholic drinks market is “experiencing a transformative period of growth, driven by evolving consumer behaviors and the momentum of no-alcohol.”
The trend is expected to grow by $4 billion by 2028, with non-alcoholic drinks skewing younger than the core buyer demographic across markets and demonstrating higher frequency and intensity of consumption, signaling a sustained thirst for booze-less beverages.
To capitalize on the trend, Molson Coors has repositioned itself as the Molson Coors Beverage Company, expanding its lineup beyond its flagship Miller Lite and Coors Light beers. The company has seen a nearly 70% increase in sales of non-alcoholic ready-to-drink beverages in the US over the past year.
Anheuser-Busch InBev is focusing on its lineup of non-alcoholic beers, including Budweiser Zero, Stella Artois 0.0, O’Doul’s, and Corona Cero, which have all seen high single-digit revenue growth. Even smaller craft breweries are cashing in on the non-alcoholic craze, with the largest craft brewer, Athletic Brewing Company, now the top-selling beer at Whole Foods.
Spirit and wine companies are also capitalizing on the trend, with Diageo buying Ritual Zero Proof, the top-selling US non-alcoholic spirits brand, and Pernod Ricard launching a non-alcoholic version of gin. Moët Hennessy, a leading wine company, has invested in French Bloom, a non-alcoholic sparkling wine, marking its first-ever entrance into the category.
Despite the growth, not all companies are immune to the trend. Diageo has faced a decline in sales after a pandemic-induced boom, and Pernod’s US sales have slumped 10%. However, the overall trend indicates a growing demand for high-quality non-alcoholic alternatives that don’t compromise on taste or experience.
