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by Natalia Olynec Published 3 February 2025 in Sustainability • 8 min read
For social drinkers who have been patiently counting the days until the end of Dry January, a recent news announcement by the US Surgeon General may have cast a pall over plans to celebrate the end of an abstemious month. In a January 2025 report, Vivek Murthy identified alcohol as the third leading cause of preventable cancers after tobacco and obesity, responsible for 100,000 cases of cancer and 20,000 deaths annually in the US. He called for changes to warning labels on drinks packaging to reflect current data about risks. Global spirits giant Diageo was among other alcoholic beverage companies whose US share prices dropped by up to 4% following the announcement.
Murthy’s equivocal statement echoed a January 2023 WHO statement that no level of alcohol consumption is safe when it comes to human health, and that light to moderate drinking (1–2 drinks per day) accounted for half of all alcohol-attributable cancers in the WHO European region.
Safe drinking limits are constantly under review by governments seeking to reduce avoidable health harms from alcohol. Some US states are considering introducing new taxes on alcohol. New Mexico, which has the country’s highest alcohol-related mortality rates, proposed taking a two-pronged approach by introducing a uniform 3% tax rate and adding a 20-cent “public health investment fee” per drink.
Official drinking guidelines vary widely across countries, and in the same countries over time. In 2023, Canada updated its guidelines for alcohol consumption, advising a significantly reduced maximum of two drinks per week to avoid alcohol-related harm, and some countries recommend lower consumption for women based on size and hormonal differences from men.
Recent data in the US shows Gen Z drinking 20% less than millennials did at their age, with 23% claiming to prefer non-alcoholic beer, wine, or spirits. In addition, there are signs that older and wealthier demographics tend to drink less as a focus on health and sustainable consumption rises among these groups. Meanwhile, the pub and bar sectors are struggling in many countries as venues face the double whammy of rising costs and lower numbers of customers returning to venues following the COVID-19 pandemic.
The development of GLP-1 drugs used for type 2 diabetes and weight loss – such as Ozempic, Wegovy, Mounjaro, and Zepbound – is also having an unexpected impact on alcohol consumption. The active ingredients – semaglutide and tirzepatide – affect the reward center of the brain, with many patients reporting a sharp decline in interest in alcohol while on these drugs.
The rise of alcohol-free and low-alcohol beverages – collectively known as NoLo products – reflects the evolving “sober-curious” movement.
As global consumer behavior shifts towards health-conscious and sustainable choices, alternative products are breaking into the mainstream. This transformation, driven by younger generations’ evolving consumption habits, is reshaping industries from beverages to tobacco and proteins. These trends are not just changing lifestyles but also influencing mergers and acquisitions (M&A) activities and boosting the share prices of innovative companies.
The rise of alcohol-free and low-alcohol beverages – collectively known as NoLo products – reflects the evolving “sober-curious” movement. A growing segment of consumers is prioritizing health and mindfulness over habitual or socially motivated drinking. According to the Waitrose Food & Drink Report 2023-24, sales of no- or low-alcohol beer, cider, wine, and spirits were up by 23% in the period covered by the report. Supporting this growth, the global non-alcoholic beverages market was valued at $1,223.93bn in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 7.4% through 2030.
Notable examples include Bacardi’s 2024 prediction that 0.0% alcohol beverages will dominate trends and The New Bar’s partnership with Coachella, showcasing non-alcoholic alternatives on a mainstream stage. M&A activity is thriving in this sector, with Diageo acquiring Ritual Zero Proof, America’s largest non-alcoholic spirit brand, in 2024. This trend extends beyond consumer preferences, with societal benefits like fewer drunk driving incidents enhancing its sustainability credentials.
While vegetarians comprise 7% of the population but can find a vegetarian option on 100% of menus, people seeking non-alcoholic drinks comprise 16% of the population but could find suitable options on only 70% of menus featured in the report.
As the alcoholic beverage sector looks to profit from shifting trends, most of the big producers have set about developing niche ranges of non-alcoholic equivalents to their traditional tipples, hoping to attract customers who no longer see the appeal of alcohol-fueled nights out. Heineken, for example, the largest brewer in Europe and second largest globally, sees as much as 20% of its marketing budget going into non-alcoholic beverages by 2030, representing a jump from 5% of Heineken’s sales currently.
“There is increased pressure in the more developed markets about the health implications of alcohol, as there should be,” Dolf Van Den Brink, Chairman of the Executive Board at Heineken, told IMD Professor of Leadership and Organizational Development Jean Francois Manzoni in a CEO Dialogue interview last year. “The harmful use of alcohol is something that we very proactively need to fight. In that context, we are experimenting by bringing new options to our consumers.
“In 2016, we had a technological breakthrough which allowed us to make Heineken 0.0, which tastes almost the same as a regular beer. We sold it as premium in 100+ countries and we put 25% of our marketing budget behind it.” As a result of this investment, he said, while Heineken holds second place in overall beer, “We’re by far the number one market leader in the world on 0.0, and Heineken 0.0 is the largest.”
Small and independent producers are also embracing high-quality LoNo options. While initially, alcohol-free offerings simply tried to mimic existing drinks like beer and cider, newer entrants to the market are raising the bar on flavors and the ‘wow’ factor. Some use so-called ‘functional’ ingredients to produce non-alcoholic drinks which contain everything from B vitamins to chili and natural stimulants like ashwagandha. Three Spirit Botanical Elixirs, a B-Corp that makes products for UK company Beyond Alcohol Ltd, creates award-winning vegan, non-GMO, and gluten-free drinks that it bills as “Hedonism without the hangover.” Ingredients in its beverages, which are sold in more than 1,200 venues across two continents, include adaptogens, nootropics, herbs, distillates, and ferments.
Meanwhile, the widening availability of cannabidiol (CBD), a chemical compound found in the cannabis plant that doesn’t cause a high but is widely used to boost well-being, has seen cannabis-based drinks like Trip take off with cross-over appeal, dominating the CBD drinks market on supermarket shelves but also available in bars and restaurants. Launched in 2019, in March 2023, Trip became the fastest-growing soft drinks brand in the UK, with 522% growth over 12 months.
Yet despite the growing availability of innovative products, venues have some catching up to do if they are to effectively woo the sober market, however. Everleaf, a maker of non-alcoholic cocktails founded by a conservation biologist and bar owner, joined forces in November 2024 with the hospitality industry research agency KAM to produce a report on the challenges faced by consumers seeking non-alcoholic options.
Based on an in-depth audit across 131 venues in London and Manchester, the report found that UK venues are currently failing to appeal to the growing appetite for alcohol-free drinks. A lack of variety is also an issue; while 98% of venues offered a non-alcoholic option, only 16% offered non-alcoholic beer. The market opportunities for non-alcoholic drinks are underscored by a comparison with how venues cater for vegetarians. While vegetarians comprise 7% of the population but can find a vegetarian option on 100% of menus, people seeking non-alcoholic drinks comprise 16% of the population but could find suitable options on only 70% of menus featured in the report.
So, what does the future hold for the market in alcohol-free alternatives? Are the moves into alcohol-free products like the strategic diversification into renewables by some fossil fuel companies: a way to maintain the license to operate without truly disrupting the status quo? Or will a currently niche group of consumers continue to grow and confirm that they can do without the hangover of the old ways of drinking?
Global trends are looking positive for non-alcoholic drinks, with a report finding that in 2025, revenue generated in supermarkets and convenience stores will reach $220.2bn, while revenue generated in restaurants and bars is set to be even larger, at $317.1bn – a combined total of $537.4bn.
Heineken’s Van Den Brink is upbeat about the future of its 0.0 beers, stating: “I really believe this will become a bigger and bigger part of our portfolio going forward.” His growth prediction for the market leader’s non-alcoholic product is echoed by Japanese brand Asahi, which has said it hopes to increase the percentage of revenues coming from zero and low alcohol beverages from around 10% today to 20% by 2030, and 40-50% in 2040.
Non-alcoholic spirits are also on a major growth trajectory. According to a UK report, the country’s non-alcoholic spirits market generated a revenue of $24.9m in 2024 and is expected to reach $40.9m by 2030, with a CAGR of 8.9% from 2025 to 2030.
The signs are clear: the alcohol-free beverages market is ripe for exploitation by those with the vision to seize the opportunity. In this context, it may not be too much of a stretch to suggest that last orders may soon be called on nights out dominated by the buzz of alcohol, as consumers wake up to the benefits of a wider selection of enjoyable booze-free alternatives.
Chief Sustainability Officer at IMD
Natalia is the Chief Sustainability Officer at IMD. She designs and implements sustainability strategy, develops executive education programs and advisory, publishes research, builds cross-sector partnerships, and communicates IMD’s ambitions and progress. The Center for Sustainable and Inclusive Business, co-led by Olynec, aims to support leaders and companies to take steps towards a more sustainable and inclusive business world by harnessing IMD’s knowledge and expertise in this field and offering tools to help them deliver systemic, innovative, and impactful responses.
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