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Dry JanuaryLVMHABYour browser does not support the element. is under way. After the excesses of the festive period, nearly one-third of Americans are expected to give up, or at least cut down on, alcohol this month. Many will save money. Some will lose weight. And a growing number will still continue to drink their favourite tipple—or at least something close to it.The teetotal and “sober curious” are no longer restricted to fizzy drinks, fruit juice or water. The market for alcohol-free beverages—including beer, wine and spirits—has been buzzing of late. Global sales came to $20bn in 2023, according to data from Euromonitor, a research firm, double the amount from five years before (see chart). The market grew by roughly 20% in 2023, compared with 8% for alcoholic drinks. How big will it get?Demand for alcohol-free drinks is not limited to Dry January. A growing number of health-conscious youngsters are going sober all year round. The share of Americans aged 18-34 who drink alcohol has dropped to 62%, according to the latest figures from Gallup, a pollster, compared with 72% two decades earlier. Many who do booze are having fewer drinks. “Zebra-striping”, or alternating between alcoholic and alcohol-free drinks, is in vogue. More people may join the sober trend if America’s surgeon-general gets his way. On January 3rd he called for alcoholic drinks to come with a .In response to all this, booze giants have been developing alcohol-free lines. Diageo, one of the biggest, spent two years experimenting with 400 different recipes for an alcohol-free version of its Captain Morgan Spiced Gold rum. It recently bought Ritual, a non-alcoholic drinks brand. , owner of Moët & Chandon champagne, has invested in French Bloom, a brand of alcohol-free sparkling wines.Nadine Sarwat of Bernstein, a broker, reckons that drinks firms are not cannibalising their sales by making alcohol-free products. More than 94% of Americans who buy alcohol-free alternatives still buy alcoholic drinks, too, according to Nielsen, a data company. Some consumers see zero-alcohol alternatives as a substitute for fizzy drinks, rather than booze. The drinks also tend to be more profitable than alcoholic ones, as they are priced only a little lower but are taxed more lightly.Still, making alcohol-free drinks that taste like the original is not easy. The beer industry, which began producing alcohol-free products in the 1970s, is furthest along in this. That is partly why beer makes up 89% of sales of non-alcoholic drinks, with wine and spirits accounting for just 7% and 4%, respectively, according to Bernstein. Rather than heating beer to evaporate the alcohol, which ruins the flavour, producers have come up with various alternative brewing techniques, many of which are closely guarded secrets. Athletic Brewing, a popular brand in America, is trying to patent parts of its production process.The race is now on to develop methods for alcohol-free wine. Although there are ways to remove alcohol from wine, including reverse osmosis, which involves filtration, and spinning-cone technology, which uses centrifugal force, these often ruin the taste, too. Wine relies on alcohol for much of its flavour and mouthfeel. “We are 20 years behind beer,” says Moritz Zyrewitz, founder of The Gentle Wine, a German low- and no-alcohol brand.There are other challenges to further expanding the alcohol-free-drinks business. Some consumers balk at the price of products. Alcohol-free aperitifs, which are mostly a mixture of spices and botanicals, can sell for around $40 a bottle. In a recent survey of Americans by The New Consumer, a website, and Coefficient Capital, an investment firm, 38% of respondents said that non-alcoholic drinks should cost “a lot less” than alcoholic ones.Brands are doing what they can to lift the appeal of alcohol-free alternatives. Corona Cero, produced by InBev, another drinks giant, was an official sponsor of last year’s Olympic Games; Heineken 0.0% sponsors Formula One. Lucky Saint, another alcohol-free beer brand, opened its own pub in central London, which serves both alcoholic and non-alcoholic brews. Celebrity booze startups that offer non-alcoholic alternatives may also help convert drinkers. Blake Lively, an actress, Katy Perry, a singer, and Lewis Hamilton, a Formula One driver, have all launched brands in the past few years that offer alcohol-free drinks.For now, alcohol sales, which reached $1.8trn globally in 2023, are hardly slumping. Spending in many developing economies continues to rise along with incomes. And the overall share of Americans who drink alcohol has remained steady at around 60% over the past two decades, according to Gallup. More intemperate older consumers are making up for the sobriety of youngsters. Retail sales at beer, wine and liquor stores in America continue to climb steadily. Plenty of consumers will celebrate the end of Dry January with a full-strength tipple.
