The alcohol-free beverage market is rapidly transforming, entering what industry experts describe as a 'transformative period of growth.' According to data from IWSR, the low and no-alcohol sector is projected to expand by 4% in annual average growth rate through to 2028, outpacing traditional alcoholic beverages, which are expected to see only a modest 1% growth during the same period.

The rising popularity of alcohol-free drinks reflects a significant shift in consumer preferences, as increasing numbers of individuals are seeking products that provide the social and relaxation benefits commonly associated with alcohol, yet without the potential adverse health effects and next-day hangovers.

“Functionality is the new frontier of non-alc,” stated Susie Goldspink, head of low and no alcohol at IWSR. She further elaborated on the evolving landscape, noting that while functional products have existed for some time, the innovative trend is now seeing a merging of categories, such as beers and cocktails infused with functional ingredients.

Prominent brands are responding to consumer demands by integrating various functional ingredients intended to recreate the enjoyable sensations associated with alcohol consumption, such as relaxation and sociability. BeverageDaily is hosting a free online event dedicated to the low and no-alcohol category to further explore these trends.

Among the innovative brands leading this charge is Kin Euphorics, launched in 2018 by Jen Batchelor and supermodel Bella Hadid. Kin distinguishes itself through the incorporation of nootropics, adaptogens, and functional mushrooms designed to enhance mood states. Batchelor, reflecting on her inspiration from integrated medicine and Eastern practices, stated, “How we land on what ingredients to use is based strictly on what feeling we are trying to elicit and what mechanisms (mental, hormonal, digestive) are at play when working with the system to support a specific mood.”

Defining the potential of adaptogens, Batchelor noted, “We use adaptogens like ashwagandha, reishi, saffron, Schisandra, and Rhodiola rosea. Adaptogens are nature’s antidote to stress and each of them plays a unique role whether it’s helping combat oxidative stress, environmental, or emotional, they are miracle workers.” In contrast, nootropics such as GABA and 5-HTP aim to offer clarity and elevate mood, promoting an appealing option for consumers.

Another participant in the functional alcohol-free space is Katy Perry's De Soi, which aims to replicate the calming effects of wine using a proprietary blend of adaptogens including reishi mushroom, lion's mane, and L-theanine. CEO Scout Brisson noted, “While I wouldn’t say De Soi replicates alcohol, it does help promote a sense of calmness and ease,” indicating its design as a relaxing alternative.

UK-based brand Smiling Wolf, founded by former Diageo executives, is also focused on leveraging functional ingredients such as beta-alanine and caffeine to promote mood enhancement similar to the effects associated with alcohol. The brand’s objective is to foster a sense of contentment and uplift through its formulations.

The introduction of cannabis-infused options further diversifies the alcohol-free landscape. Pamos Beverage Co. from Los Angeles offers beverages infused with varying dosages of THC, targeting a buzz akin to that achieved with alcohol. CEO David Mukpo explained, “Pamos is formulated to mimic the experience of alcohol in many ways – from the flavour profiles and ingredients to the fast-acting THC infusion.”

Curaleaf is another brand making strides in this area, with its Zero Proof Hemp Seltzers designed to provide a ‘bubbly wave of social euphoria’ through THC, which is targeted at social events. On the CBD front, the UK brand Goodrays is responding to the demand for calm with drinks formulated to assist in stress management, featuring a dose designed to help consumers unwind without the negative effects of alcohol.

As the market continues to evolve, industry experts acknowledge the possible intimidation consumers may feel towards the complex range of new ingredients. Batchelor suggested that effective communication about these products and their benefits is essential. The emphasis on collaboration with credible experts also aims to demystify these offerings, enhancing consumer confidence in exploring the alcohol-free category.

With the rapid expansion of this market, brands are positioning themselves to foster a culture of enjoyment, connection, and relaxation without the complications traditionally associated with alcohol consumption.