Recent data shows the billion-dollar potential of the low- and no-alcohol sector. But what can brands do to ensure forecasts come true?

Like it or not, the global spirits industry would be remiss to ignore the development – and demand –for low- and no-alcohol ‘spirits’. According to recent data from GlobalData, health-conscious consumers in Japan have been turning to low-alcoholic beverages as they opt for more mindful drinking choices. The demand was primarily observed among Millennial and Gen Z drinkers.

Meanwhile, in the US, interest in non-alcoholic ‘spirits’ soared during the first seven months of 2024 from 2023 levels, bucking the downward trend for alcoholic spirits. Spirits volumes in the US fell by 3% during this period, compared with a 29% leap for non-alcoholic ‘spirits’. While the sectors are playing from vastly different base levels, it marks a significant and hugely positive uptick for a relatively young category.

It has certainly caught the attention of the big spirits players. There have been some interesting moves in low and no throughout 2024. In September Diageo added Ritual Zero Proof to its portfolio, and at the start of 2024, Pernod Ricard released a 0% ABV version of its Beefeater gin.

Established brands are doing well to drive awareness about the category. Data from analytics company Commetric found most low-and-no products mentioned on Reddit are from established alcohol brands. Low-and-no ‘spirits’ accounted for 13% of the almost 10,000 posts that were analysed, but low-and-no beer was way out in front at 52%. Taste and aftertaste were the subjects that were talked about most (accounting for 65% of conversations).

It shows the importance of maintaining high standards, despite the category’s quick growth. Ben Branson, founder of Seedlip, stressed this point during the Club Soda Low, Light and Alcohol-Free Summit in London in September. Another challenge for the sector, he noted, was to avoid being seen as “less than” alcoholic options.

“There’s the most incredible freedom with non-alcoholic, and I would love for us over the next 10 years to take ownership of our category,” Branson said. “The appetite is incredible, and growing globally. But people have had bad first experiences of this category and all it does is erode trust; they feel cheated, and the tendency then is to reject the category.”

While the stats look positive – IWSR Drinks Market Analysis forecasts no/low volumes will rise at a CAGR of 6% between 2023 and 2027 – leaders of the sector feel strongly that a unified language to describe the varying ABVs are important for further growth. This will likely be at the forefront of discussions and lobbying efforts in the year ahead.

Brands to watch in 2025

Sylva

In September 2024, Ben Branson, the man credited for kicking off the non-alcoholic ‘spirits’ category with Seedlip, opened a non-alcoholic distillery and maturation laboratory. Located in Essex in the UK, Sylva is part of Pollen Projects, a venture studio the entrepreneur launched in 2023. Sylva’s aim is to create luxury dark ‘spirits’ that sit at 0.5% ABV and under. It has been a trickier part of the low-and-no category to crack – but if anyone can do it well, surely it will be Sylva.

Ritual Zero Proof

Diageo already had a busy stable of non-alcoholic brands, and added Ritual Zero Proof to its portfolio in September. Diageo has owned a minority stake in the brand since 2020, but now boasts full ownership of the range, which includes non-alcoholic alternatives to whisky, Tequila, gin, rum and apéritifs. With Seedlip also under Diageo’s umbrella, it will be interesting to see how Ritual Zero Proof is positioned and promoted in 2025.

CleanCo

With a new recipe, a new packaging design and a new ABV – 0.0% – it’s all change at CleanCo. Founded by former Made in Chelsea personality Spencer Matthews, CleanCo was the top independent non-alcoholic ‘spirit’ brand in the US off-trade in the year ending 20 July 2024, Nielsen data showed. It was also the second fastest-growing brand in the non-alcoholic ‘spirits’ category in the US.