*This article was originally released in January 2023 and updated with additional material in January 2025.
The low & no alcohol beverage category has emerged as one of the most dynamic segments in the beverage alcohol industry, with sales of non-alcoholic beer, wine, and spirits experiencing more than 100% growth since 2018. While these products currently represent a modest single-digit share of the total U.S. beverage alcohol market, the category demonstrates substantial potential for increased market penetration in the years ahead.
Given this significant growth trajectory, we are conducting a comprehensive analysis of the category’s current position, examining the key drivers behind its expansion, assessing how industry stakeholders have adapted their strategies, and identifying the demographic profiles most closely associated with purchase behavior in this segment.
Health and Wellness & Moderation Trends Drive Low & No Alcohol Consumption
The significant growth in the low and no-alcohol category is primarily driven by the broader health and wellness movement, as consumers increasingly prioritize mindful consumption habits and demonstrate greater awareness of both product ingredients and drinking frequency.
This shift is evidenced by the marked increase in Dry January participation, with 21% of U.S. adults over age 21 participating in 2024, representing a 6% increase from the previous year. However, the category’s expansion extends beyond those pursuing complete abstinence. The primary growth driver comes from consumers seeking to moderate their alcohol consumption, with many incorporating low and no-alcohol alternatives into traditional drinking occasions. Research from IWSR reveals that 78% of non-alcoholic beverage purchasers maintain a parallel consumption pattern of full-strength alcoholic beer, wine, and spirits.
Market analysis indicates that millennials and “substitutes”—consumers who strategically alternate between full-strength and low/no-alcohol options—constituted the largest consumer segment in the previous year. Generation Z is now emerging as a significant market force, demonstrating consumption patterns approximately 20% lower than their millennial counterparts. This demographic shift, coupled with the growing preference for moderation over complete abstinence, has given rise to trends such as “Damp January,” where consumers opt for reduced rather than eliminated alcohol consumption.
These behavioral patterns reflect a broader cultural transformation in which consumers increasingly view drinking moderation as an integral component of their comprehensive health and wellness strategies.
How The Alcohol Industry is Embracing Low & No Alcohol Category
Despite its current modest market share, the alcohol industry is experiencing significant expansion in non-alcoholic offerings, driven by optimistic category forecasts. Nielsen IQ data shows 72 new non-alcoholic SKU introductions in the U.S. between 2021 and 2022, while global estimates indicate the launch of more than one thousand low and no-alcohol brands since 2020.
Major beverage alcohol suppliers have strategically responded to this trend by extending their established spirits portfolios into the non-alcoholic segment. Pernod Ricard’s January 2024 launch of Beefeater 0.0 represents the latest entry in this category expansion. This follows Bacardi’s 2022 North American introduction of a non-alcoholic Martini variant, while Diageo has broadened its non-alcoholic portfolio to include zero-proof versions of Captain Morgan, Tanqueray, and Gordon’s Gin.
The on-premise sector has also evolved to accommodate this shift in consumer preferences. Beyond traditional non-alcoholic options such as sodas and juices, establishments are increasingly incorporating sophisticated non-alcoholic alternatives into their beverage programs. This evolution is evidenced by dedicated “mocktail” sections on cocktail menus, expanded non-alcoholic beer, wine, and spirits selections behind the bar, and the emergence of designated low and no-alcohol menu sections in progressive establishments.
This market transformation is further validated by strategic acquisition activity within the sector. Diageo, having established its category presence with the 2019 acquisition of Seedlip, reinforced its commitment to the segment in September 2024 through its acquisition of Ritual Zero Proof for an undisclosed amount.
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Buyer Persona for Non-Alcoholic Drinks
While low and no producers have their sites set on mainstream adoption, certain target audiences are leading the way.
Gen-Z
A growing number of young people are seeking to limit their alcohol consumption, with Gen-Z representing the most sober curious generation to date. Over 37% of this age group admitted to being either very curious or somewhat curious about mindful drinking, according to Rekom data. Online communities, driven by Gen-Z, are also seeing high levels of engagement within this segment.
When it comes to this demographic, Spiros Malandrakis, head of alcoholic insights at Euromonitor, points out that “for younger cohorts who would historically be at the forefront of high energy occasions and high-volume alcohol consumption, the theme of moderation is also a key part of the ubiquitous ‘less but better’ premium mantra.”
Young adults 25 and under prioritize living active lifestyles that are based on their wellness goals, but Dan Gasper, CEO and founder of The Ardent Company, explains that people in this age bracket also “want to be on trend. This is a really exciting space and these are exciting drinks.”
Millennials
Millennials are the primary drivers of low and no category. While many Millennials take an active approach to their health, like tracking fitness and counting calories, they still want to imbibe alcohol on the right social occasions. Many of these consumers will practice what Nielsen calls “zebra striping,” or alternating between alcohol and non-alcoholic drinks on nights out.
While studies show that Millennials and Gen-Z are increasingly less likely to drink on weekdays, many are finding that this isn’t due to a lack of social activity but personal choice. The proliferation of low- and no-drinks is enabling these demographics to partake in usual on-premise social occasions while maintaining their healthy lifestyles.
Low & No Alcohol Trends to Watch in 2025
The low-alcohol drinks market is currently experiencing “a transformative period of growth” with the U.S. cited as one of the two biggest growth markets in the world for alcohol-free products, according to IWSR.
As consumers increasingly embrace mindful drinking habits, “zebra striping” is set to take a more central role in drinking occasions this year. In the U.S. and UK markets, six in ten people said they were either definitely or likely to use zebra striping as a way to moderate their alcohol in 2025, according to data from a Diageo survey. In general, the segment is expected to be more seamlessly integrated into mainstream drinking culture this year, with non-alcoholic options featured on occasions like happy hours, dinner parties, and holidays.
Functional drinks are also set to gain more share in 2025. Products designed to offer ‘health benefits’ or to enhance well-being with components like adaptogens are poised to gain more attention. “More than 50% of Americans want to drink less, while 82% actively seek functional ingredients in their beverages,” says Amruta Vyas, director of brand marketing for De Soi.
With consumers looking for low- and-no products that mimic traditional cocktail experiences and provide new experiences altogether, brands will introduce high-quality non-alcohol spirits to bring people closer to these occasions.
More Resources on Category Trends
A Look at the Tequila Market in the U.S.
Park Street’s Roundup of Distribution How-To’s for Suppliers