Beer Has Never Had Less Alcohol and Water Has Never Been Cooler
Wellness trends have always played a role in supply and demand. From the kale craze to low fat everything and keto diets to plant based protein, give me a fad and I’ll show you how the demand impacted markets. But just about everyone can agree that a meal, be it vegetarian or hard core carnivore, is better when it comes with a tasty beverage. And, the wellness industry is gaining momentum here too. Brands like Liquid Death, Athletic Brewing Company, and Not Beer are shaking up the beverage market with their healthier alternatives.
Has the Beer Industry Taken a Hit?
The non alcoholic (NA) beer business is in a boom and it's actually generating new growth for existing beer companies. The growth is a sign that the consumer demographic is changing. An increasing amount of people want the taste of beer without having to put themselves at a health disadvantage. Sober curious and moderation movements are credited with the trending demand for options that support responsible consumption. And, the beer industry has risen to the occasion with NA options of beloved brands like Heineken, Budweiser, and Guinness. The Beverage Industry report says the non alcoholic industry is worth over $368,000,000 growing by 29% in 2023 alone.
NCSolutions, who collects market data, polled consumers and 41% of people who responded said they planned to drink less alcohol in 2024. The sub-category of beer has given rise to new brands like Athletic Brewing Company, Bravus, and Recess Zero who specialize in delivering better tasting non alcoholic drinks than we’ve had in the past. And, though they make up less than 1% of the beverage industry, all three companies sell their product on Amazon, something alcoholic beverages can’t do.
They might not be edging out alcoholic beer, but you are going to find NA options listed on menus and poured in pubs. Interestingly, beer companies are not marketing to new people. Most of the recent growth experienced by brands that have been around for a long time is coming from existing customers who trust the taste and appreciate the option. They can still enjoy their favorite beer at the bar, without the alcohol content.
The real competition for the beer industry has come from canned cocktails. The perceived healthier option of seltzer water mixed with a distilled liquor, or in many cases distilled malt, made brands like Truly and White Claw rise in popularity. The ready-to-go cocktail in a can industry is worth an estimated $2.8 billion; a dollar amount large enough to make beer companies battle over where it can be sold.
Whether it's non alcoholic beer, or just a less sugary option, the healthy beverage market is expected to grow rapidly in the next five years. Wellness minded consumers are adding to their numbers every day and include both college students staying healthy at the bar and seniors who would rather skip the bar and the hangover, but still enjoy a drink.
Hot Trends in H2O Give Soda Competition
Water has undergone a similar makeover recently. At least a quarter of the water aisle at the grocery store is devoted to seltzers in every flavor imaginable. It's an industry valued at $30 billion and expected to reach a worth of over $90 billion by 2030. Attracting the health conscious crowd again, it packs the same carbonated punch as a soda, but without all the sugar. Mix it with some vitamins, add a caffeine infusion and you are boosting your energy while hydrating; and it all comes in one can.
Diet sodas, once perceived to be the healthier option have had to move aside for sparkling water. Then faced with claims that these so-called healthier, cause headaches, neurological issues, and cancers. While popularity for pop declined, seltzer became the all occasion beverage. Good for a gallon challenge and a great addition to your favorite cocktail or a refreshingly healthy mocktail. Branded and luxurious and healthy, it’s been a hit with the wellness crowd.
60% fewer teenagers are drinking soda these days. Part of the decline has been cost. The price for a case of sodas has risen by 45% in the last 5 years. And every year it seems there is an increasing amount of options available when it comes to quenching your thirst. If prices stay high and health continues to hold a place of value for consumers, the trend towards seltzer water will continue and the soda industry could take a more substantial hit.
According to the USDA, Americans have over 500 options to choose from when it comes to selecting a thirst quenching beverage. So, we can’t ignore the expert marketing tactics going on in the industry either.
The up and comers have eye appeal and killer slogans; literally. Liquid Death, a brand with a rock star vibe that preaches death to single use plastics is all the rage. If you haven’t seen it before you might think it's an energy drink or even a beer, but it's water in a can. Their “Murder Your Thirst” mantra has managed to deliver a healthy beverage option to a typically non targeted market. The newbie to the water scene is estimated at a worth of $700 million and is expected to disrupt the seltzer market.
Another up and comer is Not Beer, a water brand that began with a joke about the blurry line between serving beer and water at the bar with all the NA options on tap these days. They ran with it and developed a canned water brand that is exactly what it says it is, not beer. It’s served up in what looks like a beer can. And the company advertising mimics what we might typically associate with beer branding and wellness marketing; coolers at the beach and athletically built men and women chugging a can of Not Beer. And, like Liquid Death, they are appealing to more than just physical health and luring in those who care about the wellness of the planet too. As the website says, the people who drink no beer hate terrorism, love America and don’t want any part of killing the planet. They’ve deployed every tactic when it comes to hydrating the masses.
We’ve moved far beyond the idea that skinny is healthy. Health and wellness these days is concerned with ingredients, planet impact and value aligning options. So, you may see more water in beer cans, cocktails in seltzer bottles and over the top marketing campaigns vying for your attention amid the 500 plus options out there. Show me your can and I’ll be happy to chat about the market outlook.
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