Generational tailwinds are behind the double-digit growth of non-alcohol beers (NAB) last year and so far this year, according to Bill Shufelt, co-founder of Athletic Brewing Co., the Connecticut-based craft brewer that only produces beers containing less than 0.5% abv. “Millennial and Gen Z consumers are big advocates of healthy, better-for-you, organic, mindful products,” he explains. Indeed, these consumers account for 79% of Athletic Brewing’s customer base, a statistic Shufelt finds promising, as his fledgling company expands distribution in key markets around the country.
Dollar sales of NABs in Nielsen’s total U.S. off-premise channels surged 31% for the 52 weeks ending May 16 to $175.9 million. The strong growth puts category share at 1.3% of the total beer market, Shufelt says, up from 0.5% just a few years ago.
Savvy beer marketers both large and small are seeing opportunity in the still tiny NAB space as numerous brands have launched in the last couple of years. Most notable is Heineken 0.0, an alcohol-free malt beverage introduced last year which, according to IRI, surged into the No.-2 spot among NABs for the 52 weeks ended April 19, 2020, in multi-outlet retail stores, including c-stores, behind O’Doul’s from Anheuser-Busch InBev (A-B InBev). Heineken 0.0, supported by its “Now You Can” ad campaign, is exceeding sales projections, says Heineken USA senior brand manager Meredith Kiss. Like Shufelt, she identifies consumers as “male and female millennials, aged 21-35, who want to enjoy a beer, but on certain occasions, don’t want the alcohol.”
Molson Coors Beverage Co. is another major marketer making a commitment to NABs; it rolled out Coors Edge nationally earlier this year as a replacement for Coors NA. “We’re happy with the early response,” says Coors family of brands marketing director Chris Steele. “We’re seeing a lift in all channels.” Rival A-B InBev, meanwhile, recently introduced Budweiser Zero; in addition to O’Doul’s, other NABs in its portfolio include Golden Road Mango Cart Wheat NA from craft brewery subsidiary Golden Road Brewing. Beyond Golden Road and Athletic Brewing, other craft breweries now marketing NABs include New York’s Brooklyn Brewery, Missouri’s Wellbeing Brewing, and Colorado’s Ceria Brewing.
Consumer attention to health and wellness is certainly contributing to the NAB surge. “People are more mindful of how they drink today,” says Jeff Stevens, founder of Wellbeing Brewing Co., which produces a line of five non-alcoholic brews. “These products are occasion-based beverages—they’re lunch beers, they’re Tuesday night beers.” Liz Fowler, senior brand manager at Los Angeles-based Golden Road, agrees. “As more consumers lean into personal wellness and move away from high-alcohol and high-calorie drinks, they’re beginning to swap their usual drinks for options that have fewer carbs and are gluten-free and light,” she says. “Sober-curious culture will play a role in the continued growth of the non-alcohol sector for the foreseeable future.”
Some retailers have spotted the NAB trend and are now working to capitalize on it. Steve Hurst, beer manager at Gary’s Wine & Marketplace in Bernardsville, New Jersey, says sales of the products are up 62% year to date. The store stocks 15 NAB SKUs, with an average price of $7 a 6-pack. “To ensure the products stand out, we’ve assigned a shelf in the cooler for non-alcoholic beers,” Hurst notes. The products are also featured in sections devoted to healthy living at each of Gary’s five locations, he says. At Mendez Fuel, a chain of four convenience stores in Miami, vice president of operations Andrew Mendez notes that the NAB customer isn’t a weekly shopper. “It’s someone who may come in every once in a while, and load up with two to three 6-packs,” he says. Brooklyn’s Special Effects ($12 a 6-pack of 12-ounce cans) is a top-selling NAB at the chain, Mendez says.
Marketers and retailers alike expect non-alcoholic brews to continue to advance. “There’s huge potential for non-alcoholic beers as there are so many occasions for a healthy, sessionable drink,” says Athletic’s Shufelt. “I believe we’re on the verge of multi-decade growth.” Hurst from Gary’s also points to the untapped potential. “There are still many guests who haven’t yet discovered non-alcoholic beer,” he says. “We anticipate continuous growth of this category over the next several years and believe more producers will introduce non-alcoholic beers to meet this demand.”