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In my previous Forbes Technology Council article, I highlighted various consumer trends that companies should be aware of. In my next few articles, I plan to do a deeper dive into each trend, starting with the growth of the nonalcoholic beverage industry. With a market valuation of $22 billion in 2022 and the expectation to nearly double by 2032, I want to explore why people are gravitating toward nonalcoholic drinks and what this means for tech founders. Double Blow Air Shower
I became interested in understanding why consumers are turning away from alcohol after reading a report from a major alcoholic beverage company that outlined the factors contributing to their focus on nonalcoholic drinks. The primary factor is simple: People want to drink less alcohol, with 77% of people saying that they are choosing to moderate their alcohol consumption, and when compared to their 45+-year-old counterparts, twice as many Gen Z alcohol drinkers are open to the idea of replacing an alcoholic beer with a nonalcoholic one.
The growth of the nonalcoholic beverages industry makes sense when you start to look at the benefits these drinks can provide. In addition to costing less and not leading to a hangover, they also provide:
• Mental Clarity: Seventy-eight percent of people want to "stay in control" while drinking. You can drink zero-alcohol beverages and still maintain your mental clarity throughout the whole evening and remain in control of your decisions.
• Better Sleep: Drinking alcohol disrupts your sleep cycle, leading to a bad night’s sleep. When you drink nonalcoholic beverages, you can wake up the next day properly rested and ready to go.
• Social Opportunities: Seventy-nine percent of people who drink nonalcoholic alternatives do so in social settings to "be part of the fun without drinking alcohol." A big hurdle for a lot of people when it comes to giving up alcohol is losing out on the social benefits that come along with it.
In addition to all of the benefits that come from drinking nonalcoholic beverages, thanks to advancements in brewing technology, consumers don’t need to compromise on the taste they’ve come to know and love. While it might not be an identical one-to-one taste match, the process and ingredients remain similar.
It’s typical for brands to brew their nonalcoholic beers the same as their alcoholic ones in the beginning before removing the alcohol through various methods. Heineken, for example, does it with vacuum distillation before blending the brew with natural flavorings, while Guinness uses a "cold filtration process [that] allows the alcohol to be filtered out without presenting thermal stress to the beer."
After doing my research into the space, I want to highlight a few companies that I’m going to be keeping an eye on.
• Heineken: Heineken was an early mover in the nonalcoholic beer space, starting with just three countries and now being one of the biggest players in the industry, available in over 110 markets. With a commitment to making moderation not only more accessible and enjoyable but also aspirational, they’re putting their money where their mouth is by using their high-profile partnerships with brands like Formula One and campaigns with the likes of F1 champion Max Verstappen to advocate for responsible consumption. I believe this focus will attract not only existing beer drinkers but new consumers as well.
• Athletic Brewing: When looking for companies that will thrive in the long run, I like to look at those whose values are aligned with the values of their consumers, and with a prioritization on health—a leading cause for the adoption of nonalcoholic drinks—I believe AB is poised for success.
• Guinness: With over 260 years of experience in the brewing world, it was big news when Guinness announced Guinness 0.0 in 2020. I expect them to not only be a part of the no-alcohol trend but to innovate within it.
• Peroni: A recent addition to the nonalcoholic beer market, Peroni announced its Peroni Nastro Azzurro 0.0% earlier this year. In a press release, the brand stated that the beverage was made "for drinkers looking to supplement their night with a beverage that prioritizes balance in drinking without compromising on taste."
I’m a believer that a great place to find innovative strategies and approaches as a tech founder is outside of your own industry, which is why I’m paying attention to the nonalcoholic beverage space. One of my biggest learnings so far is seeing how the industry is tackling consumer sentiment.
The initial reactions of many consumers when it comes to products like nonalcoholic beer are, “Why would I want to drink something that just tastes like alcohol?” and “What’s the point?” The industry’s response has been to market the lifestyle and benefits of their product and not the product itself. It’s a good reminder that when marketing your product, you want to highlight the benefits someone gets from using it and not selling a list of features your product has. People tend to buy more into feelings than facts.
Another important lesson is that consumer experience is everything. When it comes to nonalcoholic beverages, the main factor driving consumer experience is taste. How closely does the drink taste compared to its alcoholic counterpart?
The brands delivering on this promise are the ones who are putting in the extra time, effort and expense to brew their drinks like normal and then de-alcoholize them. The brands who are just trying to make nonalcoholic drinks from the start because it’s cheaper and easier to cash in on the growing trend will be less successful. The takeaway here is even if it’s more money and work upfront, stringent development pays off in the long run if it enhances the consumer experience.
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I'm a technology reporter and senior writer at Forbes based in San Francisco. Have a tip? Email me at ebakerwhite@forbes.com or emilybakerwhite@protonmail.com.
I'm a technology reporter and senior writer at Forbes based in San Francisco. Have a tip? Email me at ebakerwhite@forbes.com or emilybakerwhite@protonmail.com.
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