Low-alcohol Beverages Market

Low-alcohol Beverages Market Outlook (2023-2033)

The global low-alcohol beverages market is set to be valued at US$ 800 million in 2023. Further, worldwide sales of beverages with low alcohol content are estimated to reach a value of US$ 1.2 billion by 2033-end, increasing at a CAGR of 4.5% through 2033.

Rising consumption of alcoholic drinks in the past few years has resulted in numerous health issues. As such, more manufacturers are now producing low-alcoholic beverages. In addition, growing public awareness about the availability of low-alcoholic or non-alcoholic drinks is also driving growth opportunities in the global market.

Market players are concentrating on advanced development techniques, such as packaging styles, to attract more consumers. Furthermore, the development and growth of food-based e-Commerce platforms are also contributing to increased product sales in the market.

Rising population of health-conscious people in developed nations around the world is propelling demand for low-alcohol drinks. Further, the trend to reduce the alcohol content in different beverages along with the reduction of hard liquor in celebrations and social gatherings is predicted to accelerate product demand.

Industry players are focusing on manufacturing a wide variety of alcoholic drinks that come with low-alcohol content that also provides an enhanced feel and taste. In addition, manufacturers are also catering to the inclination of people toward healthy drinks. They are providing healthy drinks while meeting the demands of the public according to moods and occasions.

At present, more youngsters are inclined to consume mocktails. The invasion of no- or low-alcoholic beverages among various age groups is predicted to contribute to their sales. Amidst the COVID pandemic, people started consuming low-alcohol beverages at an increased rate due to rising awareness about the adverse effects of alcohol on health.

• As per the Report on Bacardi Cocktail Trends that was prepared in partnership with The Future Laboratory in January 2022, around 58% of customers around the world are making a shift towards non-alcoholic and low-alcoholic beverages and cocktails.

Since more people are accepting low-alcohol and no-alcohol categories of beverages, manufacturers are innovating according to market demands and taking efforts to enhance their product portfolios. Big brands are jumping into the global market with mass offerings, including flavored mocktails, craft, low-carb drinks, and bottled water options.

Report Attributes	Details
Market Size (2023)	US$ 800 Million
Estimated Market Value (2033)	US$ 1250 Million
Projected Growth Rate of Market (2023-2033)	4.5% CAGR
Canada Market Growth Rate (2023-2033)	2% CAGR
Germany Market Growth Rate (2023-2033)	1.9%
Key Companies Profiled	A. Le Coq New Belgium Brewing Company Bacardi Ltd. Constellation Brands, Inc. Jack’s Hard Cider Red Truck Beer Company Vitis Industries Sierra Nevada Brewing Co.

Why is the Consumption of Low-alcohol Beverages Increasing across the World?

“Growing Awareness about Adverse Effects of Hard Alcohol”

People, in recent years, are gaining awareness about the adverse effects of alcoholic beverages on their health. High blood pressure, cardiovascular ailments, etc. have nudged people to opt for non-alcoholic beverages that are further predicted to contribute to market growth.

The majority of people are attracted to innovative packaging styles. Furthermore, companies from the low-alcohol beverages industry are constantly taking efforts to implement innovative packaging styles. They are also adopting effective marketing strategies for the promotion of their products.

The emergence of numerous e-Commerce platforms that are based on food is likely to serve as one of the key factors contributing to product sales. Furthermore, increasing demand for lighter and low carbohydrate-content beverages is predicted to pose lucrative opportunities in the global market.

“Increasing Investments by Manufacturers for Improvement of Low-alcohol Beverages”

Manufacturers of low-alcohol beverages are investing a handsome amount to improve their quality, taste, and variety which is further estimated to push market growth. There are a lot of product innovations from these manufacturers including fruit-flavored low-alcoholic beverages and low-calorie low-alcohol beverages that are gaining traction in the market.

For instance :

• Molson Coors in September 2019 launched Coors Edge which is a 0.5% ABV beer. It was launched in the U.S. for the expansion of the company’s non-alcoholic beverages portfolio across the country.

Rising interest of people in wellness and health in recent years is also predicted to drive sales of zero & low-alcohol beverages.

Which are the Challenges Faced by Low-alcohol Beverage Manufacturers?

“Limited Availability of Non-alcoholic Beverages in Many Regions”

The availability of alcoholic beverages is comparatively higher than non-alcoholic beverages. This limited product availability is predicted to serve as one of the noticeable factors restraining market growth.

Companies from the market are trying to launch various new products that might ensure the availability of these low-alcohol beverages in the forecasted period.

“Certain Lack of Awareness about Low-alcohol Beverages”

People from developing and under-developed countries are not much aware of low-alcohol beverages. Moreover, there are variations in the definition of low-alcohol beverages in different countries. These factors are expected to limit the adoption and consumption of these low and no-alcohol beverages.

However, the rising count of awareness campaigns about low-calorie low-alcohol beverages is likely to contribute to increased demand in the forecasted period.

What Opportunities Can New Players Explore in the Low-alcohol Beverages Market?

“Adoption of Product Innovation Strategy to Stimulate Sales of Low-alcohol Beverages”

The industry of low-alcohol beverages is highly competitive with the presence of many big and small players. Furthermore, product differentiation is a vital factor in the market that is stimulating activities on research and innovation. Changing technology with growing demand for innovative products results in new product development.

Along with quality products, promotional activities are working as crucial factors to improve brand recognition. Market players are investing heavily in promotional activities to create a unique image of brands.

For instance :

• Katy Perry, in January 2022, launched a brand named De Soi, which is an alcohol-free beverage. This initiative was taken in collaboration with Morgan McLachlan. This newly launched product comes in three non-alcoholic flavors - Purple Lune, Champignon Dreams, and Golden Hour.
• The Coca-Cola Company, in January 2022, announced the launch of Fresca, which is a canned cocktail. This launch was in partnership with the U.S. manufacturers of Corona.

Why is the European Market Likely to Grow the Fastest?

“Increasing Shift of Europeans from Alcoholic Beverages to Non-alcoholic Beverages”

The market in Europe is estimated to hold a dominating position in the global market. This dominance is attributed to the shift of the regional population to consume non-alcoholic beverages instead of alcoholic beverages. The shift in the beverages is attributed to the rising healthcare concerns among people in the region. The presence of key players in the European region is also anticipated to boost growth opportunities in the regional market.

The North American low-alcohol beverages market is also likely to hold a noteworthy share in the global industry owing to rising awareness about different health issues due to excessive intake of alcoholic beverages by people. Moreover, increasing demand for various low-alcohol beverages type by the regional population is also projected to drive market growth.

Country-wise Insights

Which Country Leads the Europe Low-alcohol Beverages Industry?

“Rapid Product Development in Germany to Increase Growth Opportunities”

The European market is likely to grow with rising demand for alternatives to conventional alcoholic beverages. In addition, people are opting for different ways to reduce their alcohol intake which has further propelled the demand for low-alcoholic beverages.

The market in Germany is estimated to expand at a CAGR of 1.9% through 2033 due to a higher number of product developments and the rapid adoption of healthier beverages.

Why is the U.S. Market Leading in North America?

“U.S. - Home to Prominent Low-alcohol Beverage Manufacturers”

North America holds a noticeable share of the global market due to the early adoption of soda products and the presence of developed economies there. The U.S. market is leading in the regional market owing to the presence of various key manufacturers including the Coca-Cola Company and PepsiCo. The rising problem of obesity and taxes on sugar products are likely to drive demand for products that are made with low-calorie sweeteners.

The market in Canada is projected to progress at a sluggish CAGR of 2% through 2033.

Which Factors are Driving Growth Opportunities in Japan?

“Increasing Disposable Income to Increase Expenditure on Non-alcoholic Beverages”

The market in Japan is likely to progress at a CAGR of 1.6% through 2033 owing to the increasing disposable income of people that has increased expenditure on different low-alcohol beverages. Furthermore, the presence of numerous untapped markets is also predicted to push growth opportunities.

Category-wise Insights

Why are Ready-to-Drink Products Gaining Traction in This Space?

“Increased R&D against Sustainability Challenges Driving Sales of Ready-to-Drink Products”

Based on product, the market is divided into beer, wine, RTDs (ready-to-drink), cider, and spirits. Among these, RTDs are likely to grow at a noticeable speed with increased R&D activities by manufacturers against sustainability challenges to broaden market prospects. Furthermore, growing consumer awareness about beverages and the rising inclination of young people toward these drinks is also estimated to contribute to market growth.

Which is the Preferred Distribution Channel for Low-alcohol Beverages?

“Hypermarkets & Supermarkets Thriving Owing to Availability of Various Product Ranges”

Based on distribution channels, the global market is bifurcated into supermarkets & hypermarkets, convenience stores, specialty stores, and online retail. Among these, hypermarkets & supermarkets are estimated to hold the largest share of the global market. This dominance is attributed to the availability of various products and brands under one roof.

There are a lot of supermarkets including Walmart, Aldi, Target, Whole Foods, etc. that are expanding their offerings.

For instance :

• Woolworths in July 2021 expanded alcohol-free spirits, beer, and wine in response to rising demand from people.

Competitive Landscape

Industry players are incorporating different strategies to gain a competitive edge in the market.

For instance :

• In May 2022, Budweiser brewer AB InBev started to take efforts to fulfill its goal to manufacture 20% of its total volume of beer with low alcohol and no alcohol. The company is planning to achieve its goal by 2028-end. In an interview in Davos at the World Economic Forum, the company confirmed that it can reach slightly over 6% of its complete goal.

Through this initiative, the company is supporting the WHO, which is targeting to reduce the consumption of harmful beverages – alcoholic drinks. The excessive consumption of alcoholic beverages is responsible for chronic diseases, car accidents, and congenital disabilities.

Key suppliers of low-alcohol beverages are A. Le Coq, New Belgium Brewing Company, Bacardi Ltd., Constellation Brands, Inc., Jack’s Hard Cider, Red Truck Beer Company, Vitis Industries, and Sierra Nevada Brewing Co.

Segmentation of Low-alcohol Beverages Industry Research

• By Type :

  • Beer
  • Wine
  • RTD
  • Cider
  • Spirits

• By Distribution Channel :

  • Supermarkets & Hypermarkets
  • Convenience Stores
  • Specialty Stores
  • Online Retail

• By Region :

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa