The trend: Nonalcoholic (NA) beer, wine, and spirits are having a moment. Sales in the category grew 28% between June 2023 and May 2024, per 84.51°, a retail data company under The Kroger Co.

Serving a need: Nonalcoholic beverages have carved out a niche by serving a need that, until recently, wasn’t met with high-quality options. That’s why 86% of NA drinkers are drinking at least as much NA beverages as they did a year ago, including 32% who have increased their consumption.

• When 84.51° asked NA drinkers what’s spurring their consumption, three responses each attracted 55% of respondents: NA beverages help me reduce my alcohol intake; NA beverages are a healthy alternative to alcohol; and I consume NA beverages when I am a designated driver.
• Offering craft beer-like quality beverages across a range of styles has helped NA-only producer Athletic Brewing become the top-selling beer brand overall at Whole Food Market, per The Wall Street Journal.

Our take: Alcohol companies are slowly recognizing that US consumers’ preferences have changed dramatically in recent years, particularly among younger generations.

• Just 62% of US adults under 35 drink, per Gallup Poll—down from 72% two decades ago.
• That share is likely to keep falling given that Gen Z consumers drink less than older generations.

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