Growth Potential Of N/A Beer Slowly Coming Into Focus
With CAGR expected to grown by more than 5.5% through 2032, non-alcoholic beer is finally getting the spotlight like never before.
Whether you’re talking to global executives at the largest macro beer makers or your local, neighborhood beer store owner, the message is virtually the same: non-alcoholic beer is getting big. REAL big. But exactly how large of an opportunity is N/A, and what should the measuring stick be on how to get to non-alcoholic nirvana? At the Innovation in Non-Alcoholic Beverages Conference in London last week, Heineiken’s global innovation manager Karlijn van Ruiten attempted to put a stake in the ground. With her employer estimating non-alcoholic makes up about 2% of the global beer market, van Ruiten suggested that 10% is the number to hit for the category to be considered mainstream. Pointing to numbers indicating alcohol consumption has dropped 25% for Generation Z over a four-year period, she was even more blunt, saying: “We need to face the fact that alcohol consumption is dropping.”
Across the pond in the U.S., similar sentiments have been echoed in terms of growth. Leading the way here has certainly been Athletic Brewing Company, now believed to have upwards of 50% of the craft non-alcoholic beer market. As CEO Bill Shufeldt put it in a December interview with CNBC, the category has gone from an “afterthought and penalty-box beverage,” to one he suggests is as large as an 8% category share for national grocery retailers who have bought in on the idea of a significant non-alcoholic beer market. A $50M investment from Keurig Dr. Pepper into the Connecticut-based N/A beer maker late last year would seem to be validation of that premise.
So what does a category once mostly associated with a single brand, O’Doul’s, need to do next? In a nutshell, continue to serve its various market segments with attractive and inspiring offerings on both a national and regional level. The craft beer boom at the beginning of this century proved that beer is not a one-size-fits all category, and consumers want options. As successful as Athletic has been, that means going beyond just aspirational and wellness-conscious messaging and reaching those who may not associate themselves with an active lifestyle, but still want to drink N/A beer. That includes the sober community, who have been among the most vocal supporters and promoters of the N/A beer movement on social media, even while the numbers suggest much of the category growth is being driven by those who still drink alcohol. It also needs to include local breweries and brewpubs, who for various reasons may only be offering limited non alcoholic options, and are likely missing opportunities to further serve patrons already sitting in their taprooms.
The future of N/A is bright, and getting brighter as it attracts a host of new players. How the industry can grow from nascent to mature will determine just how successfully the market can leverage generational trends that continue to move in their favor.