Young Consumers Drive The Development of Non-alcoholic Beverages

Non-alcoholic beverages are booming and it will become more important in the future. According to the IWSR, total sales volumes in the low and no-alcohol categories are expected to grow at a compound annual growth rate of 6% between 2023 and 2027.

Non-alcoholic beverages led the way with a 7% growth rate, while low-alcohol beverages grew at 3%. Currently worth more than $13 billion globally, this category is expected to account for nearly 4% of total alcoholic beverages.

2023 saw impressive growth across all no/low alcohol categories, with global non-alcoholic beer sales up 6% and non-alcoholic spirits continuing to see double-digit growth at 15%.

In 2023, more than 100 hectares of vineyards have been dedicated to the production of alcohol-free wine worldwide, and the alcohol-free wine market is expected to continue its strong growth momentum in the next five years. It is estimated that the global alcohol-free wine market size is expected to reach USD 4.5 billion by 2027.

Young consumers dominate

Non-alcoholic beverages are becoming increasingly important for a number of reasons: health trends, and the growing social acceptance and desire for non-alcoholic beverages. This shift is particularly pronounced among younger generations, who prioritize health when making lifestyle choices. In the Japanese market, according to a survey by Asahi Beer Co., LTD., about 40 million of the 80 million people aged 20 to 60 do not drink alcohol, and more than half of them are young people aged 20 to 30. As the sales of alcoholic drinks in Japan have declined over the past decade, the younger generation has shown a trend of "staying away from alcohol".

The US, as one of the most potential no/low alcohol consumption markets, is mainly consumed by younger age groups, who tend to have a wider range of no/low alcohol drinking habits, which greatly drives the growth of this market. According to IWSR survey data,

 the US no/low alcohol beverage market is in its infancy, accounting for only 1% of the market share by volume, but it is growing at a respectable rate of 31.4% between 2021 and 2022.

In the French market, the consumption group of no/low alcohol drinks is even larger, accounting for 29% of the total, and young people aged 18-25 account for 45% of them. Germany and Spain already have a market share of more than 10% for non-alcoholic beers.

The no/low alcohol consumption market in the UK is also maturing. Millennials, as a key consumer group, consume non-alcoholic and low-alcohol beverages more frequently than other groups, which is expected to drive a robust 8% CAGR in this category from 2023 to 2027.

Whether in mature markets such as France and Japan, or in more diverse consumption environments such as the United States, millennials and Generation Z are the main consumer groups with no/low alcohol consumption. Some millennials' consumption categories span full alcohol, low alcohol and no alcohol, becoming the main force of alcohol consumption.