- Major alcohol companies have been bracing for a culture shift favoring nonalcoholic options.
- Consumers under 30 tend to buy less alcohol and drink less often.
- Brands like Heineken and AB InBev have rolled out alcohol-free offerings, bolstering sales.
Even before the US surgeon general on Friday warned that alcohol could cause cancer and said it should come with a warning label, big companies like Heineken and AB InBev — the parent company of brands like Budweiser and Michelob Ultra — were preparing for a culture shift toward nonalcoholic options.
Spending on most kinds of alcohol in the US has declined in recent years, especially among young adults.
Consumers under 30 have become less likely over the past two decades to drink alcohol at all. A Gallup analysis found that in the period from 2021 to 2023, 62% of adults under 35 said they drank, down from 72% two decades ago.
Big brands have launched nonalcoholic options to cater to people who don't want a boozy drink but may still want something to indulge in on a special occasion.
Heineken released its nonalcoholic beer, Heineken 0.0, in 2017 in the Netherlands and Germany, expanding to the United States in 2019.
In 2022, Constellation Brands, which produces beer, wine, and spirits from brands like Modelo and Corona Extra, debuted Corona Sunbrew 0.0%. AB InBev, which produces drinks for 500 global brands including Budweiser and Michelob Ultra, launched Corona Cero the same year. Constellation Brands owns the US brand licenses for Corona beer in the US, while AB InBev owns the beer in the rest of the global market.
Executives have said in recent earning calls that their zero-proof bets are paying off.
Harold van den Broek, Heineken's chief financial officer, said in October that the company was seeing an acceleration in nonalcoholic sales across many markets, including the US, adding that the brand's nonalcoholic options had grown to more than 4% of its total portfolio.
"We do believe that this category, which has been growing about 6% on average since 2018, will continue this growth trajectory," van den Broek said, adding, "We have high hopes for the nonalcohol portfolio."
William Newlands, Constellation Brands' president and CEO, similarly expressed optimism. In an earnings call last April, he said Corona Non-Alcoholic was "the No. 1 share gainer in the nonalcoholic segment."
"I think that does reflect some change in consumer behavior or people that are concerned about being the designated driver but still want to enjoy an outstanding-tasting beer," Newlands said. "We're going to continue to emphasize the betterment trends as we go forward with a number of our product offerings and certainly expect Corona Non-Alcoholic to continue to grow here in this coming fiscal year as well."
Michel Doukeris, AB InBev's CEO, likewise told investors during an earnings call in October that the company viewed the nonalcoholic beer segment as "a key opportunity to develop new beer consumption occasions" and that the company would continue to focus on developing the market.
"We gained market share of nonalcohol beer in over 60% of our key markets in the third quarter, with Corona Cero more than doubling both volumes and revenues," Doukeris said. "While no-alcohol beer is currently a small portion of our global volume, we believe there is a significant opportunity for incremental growth."
Industry representatives have long warned of a "war on alcohol," a warning that increased in fervor after a World Health Organization report in 2023 indicated that even low levels of alcohol increased the risk of cancer and said that "no safe amount of alcohol consumption for cancers can be established."
Amid concerns that alcohol sales will dwindle, brands have begun to capitalize on shifting consumer behaviors to buoy their revenue. A 2023 analysis cited by Boston Consulting Group valued the global market share of no- or low-alcohol beers, wines, and spirits at more than $13 billion and said sales were expected to grow at an annual rate of more than 7% from 2023 to 2027, settling at about 4% of the overall alcohol market.
Eliott Edge, the bar manager at Hekate, a sober bar in New York City, told Business Insider that there was "a whole ecosystem" of new nonalcoholic offerings that customers were clamoring for, having witnessed increasing demand for the alcohol-free options firsthand.
"I get the sober, the sober-curious, and folks who still drink but want to take a break for one reason or another," Edge said. "Locals, tourists — everyone wants to see what it's like. So the nonalcoholic options don't cater specifically to any particular group."
Edge predicted that more and more bars and brands would offer nonalcoholic options. "They're going to realize that it's like vegetarians or vegans or gluten-free or dairy-free — it's just another type of customer profile to cater to," Edge said, "and the ones that don't cater to that are going to go the way of the dinosaur."
Correction: January 5, 2025 — An earlier version of this story inaccurately described Hekate. It is one of several sober bars in New York, not the only one. While Hekate advertises itself as such, other bars offering exclusively nonalcoholic drinks have opened in the city since Hekate opened.