The global appetite for low and no-alcohol (LoNo) beverages is exploding, and it's not just a fleeting trend. Fueled by a mixture of health awareness, evolving social norms and exciting flavor innovation, this market is poised for significant growth in the coming years. For brands looking to tap into the "better-for-you beverage space", it is important to understand the driving market forces.
The LoNo Market Forecast
The LoNo alcohol retail sector grew rapidly between 2019 and 2024, though still remaining a small part of the retail alcohol market. In the UK alone, the estimated retail value in 2024 was £380m, with retail value sales projected to jump by a staggering 55.7% to £592 million between 2024 and 2029. Volume sales are expected to increase by 41.5% to 149 million litres in the same period.
Health and Wellness Considerations
Consumers are increasingly viewing their food and beverage choices through a health and wellness lens, and the concept of ‘mindful drinking’ is gaining traction. Reducing or eliminating alcohol intake is associated with numerous long-term health benefits, including lower blood pressure, reduced risk of certain cancers and liver disease, and improved heart health. Choosing more LoNo beverage options is more than just avoiding hangovers; it's a holistic approach that encompasses calorie and sugar reduction, improved mental wellbeing, better sleep and support for physical fitness goals. Those prioritizing exercise and physical activity are often more conscious of how alcohol can hinder their progress to a fitness-focused lifestyle as it affects hydration, recovery and overall performance.
There's a growing awareness of the impact of alcohol on mental health, including sleep quality, anxiety and low mood. 52% of LoNo drinkers cite concerns about alcohol affecting their sleep as a key reason for their choices. ‘Permissible indulgence’ - enjoying the ritual and taste of their favorite drink but without the negative health consequences of alcohol – is becoming a more widely used term. Incorporating relaxing ingredients like lavender or chamomile can strengthen the positive association of LoNo drinks with emotional wellbeing. These botanical inclusions support the idea of permissible indulgence while contributing to a calming sensory experience.
Lowering sugar content is the leading factor seen in making alcoholic drinks healthier, cited by 32% of drinkers. Alcoholic beverages can be high in calories and sugar, therefore LoNo alternatives with fewer calories and less sugar appeal to those managing their weight or blood sugar levels. Some low- and no-alcohol beers contain as little as 0.2–1.3g of sugar per 100ml, while many no-alcohol spirit alternatives are formulated with no sugar at all. However, it's worth noting that some alcohol-free beers and wines may have higher levels of residual sugar than their standard counterparts to make up for the loss of flavor and body caused by the dealcoholization process.
The ‘Sober Curious’ Movement
A growing number of consumers are exploring their relationship with alcohol and choosing reduced or zero-alcohol beverages, without necessarily abstaining permanently. Gen Z and Millennials are often at the forefront of this movement, showing a greater tendency to drink less alcohol than previous generations. They often cite greater mindfulness, health benefits and intentionality around alcohol, rather than drinking out of habit or social pressure.
Shifting Societal Norms
In 2024, there was no significant change in the proportion of consumers moderating their alcohol intake compared with 2023, however, more people moderated their alcohol intake in the year to April 2024 than in the year to May 2022. This is likely connected with constraints on household incomes in 2023 as the cost-of-living crisis and saving money became a significant reason to limit or reduce alcohol consumption.
The stigma around not drinking is lessening: mocktails are appearing on menus and alcohol-free social events are gaining popularity. Not drinking in social settings is particularly normalized among younger generations, who may feel more empowered to set their own boundaries around alcohol. 53% of 18-34 year olds in Britain have cut back on alcohol in the last 12 months and 27% of 18-24 year olds identify as teetotal, the highest rate among all age groups.
LoNo Innovation and Premiumization
LoNo innovation and premiumization is trending, with leading alcohol brands investing in sophisticated, flavorful alternatives across beer, wine, spirits and ready-to-drink (RTD) cocktails. Flavor is the key focus, with marketing campaigns highlighting the taste, overall experience and lifestyle advantages for mindful drinkers, as well as well as their dealcoholization methods to ensure taste equivalence. New product launches in 2024 include zero-alcohol versions of well-known beverages and mocktails positioned as better-for-you treats. These innovations often emphasize low-calorie benefits while recreating the familiar flavors of popular cocktails that consumers already enjoy.
The market is seeing entries from specialist brands and other beverage categories, such as juice drinks, further diversifying the options available. Beer is still the leading category for LoNo innovation and consumption, with 45% of German beer drinkers having consumed a low or no-alcohol beer in the three months to July 2024. Some zero-alcohol beers have achieved significant retail sales growth in 2024, supported by robust marketing strategies and growing consumer interest in non-alcoholic options that don’t compromise on taste.
Price as a Barrier
While the LoNo market is growing, price still remains a deterrent for some consumers; 53% of adults cite cost as a reason for not drinking LoNo options more often. Even 45% of consumers in a stronger financial position are put off by price. However, as real income growth strengthens, consumers are expected to trade up to premium LoNo options, driving value sales. This presents an opportunity for brands to offer high-quality, flavorful alternatives that justify a slightly higher price point.
Regulatory Factors and ESG Considerations
Governments and health organizations are increasingly focused on reducing alcohol-related health risks. This has led to stricter regulations on the marketing, labeling and availability of alcoholic beverages. Clear and consistent regulations regarding the definition and labeling of "low alcohol," "non-alcoholic" and "alcohol-free" are crucial, and regulatory bodies are working on establishing clearer guidelines.
The LoNo Market is Here to Stay
As more and more people prioritize their long-term health and moderate their drinking habits for a more balanced lifestyle, the LoNo market will continue to grow globally. The LoNo beverage space in Europe, and to a lesser extent in North America, is experiencing rapid growth, driven by health, moderation and innovation, with a positive outlook for sustained expansion through 2029. However, concerns over price and sugar content still pose barriers.
Consumers still seek the familiar comfort of their alcoholic favorite drink, but with exciting, unexpected flavors and aromas that ignite the senses and do not compromise on the sensory immersion. It's all about discovering beverages that tantalize the taste buds and leave a lasting impression.
Discover how we’re delivering bold flavor through better-for-you innovation.
