Mocktails Are 100 Proof Millennial Market Gold

(Bloomberg Opinion) -- While omicron stirs up pandemic déjà vu with swamped hospitals, canceled flights and millions of people quarantined — one trend that dominated earlier Covid-19 waves is on the decline: binge boozing.

It’s been widely documented that alcohol consumption surged in the U.S. in 2020 and began to ease up in 2021. Now 2022 has begun with overwhelming participation in Dry January — 19% of American adults are abstaining from alcohol (or trying to) this month, according to one survey. What's surging now is the business of non-alcoholic booze.

Yes, mocktails are having their moment. And while it’s hard to take faux anything seriously, this latest trend isn't as trivial as it may sound. Sales of non-alcoholic beverages spiked 33%, to $331 million in the last year, NielsenIQ reported this fall. Going forward, the growing popularity of near-beers, “clean” wines and zero-proof spirits could follow a trajectory similar to the remarkable boom of faux meats.

Both trends are spearheaded by health-conscious millennials. Both also have important ethical and environmental implications. And just as the fake meat market has been built by brand new startups and old industry giants alike — from Impossible Foods and Beyond Meat to Tyson Inc. and Cargill Inc. — faux alcohol products are now being peddled by both scrappy young beverage companies and legacy booze brands.

You may already recognize new brands like Curious Elixirs, Kin Euphorics and Seedlip — the latter having been purchased Diageo PLC, parent company of Smirnoff, Johnnie Walker, and Guinness. These zero-proof liquors and mixers are being marketed as an extension of the bougie craft cocktail movement — and priced accordingly, with costly additives like “adaptogens” that purportedly offer a holistic, hangover-free high.

Major vintners including Kendall-Jackson, Johannes Leitz and Brancott Estates have rolled out alcohol-free or low-alcohol wines that range from earthy Pinot Noirs to crisp Rieslings. They aren’t cheap — some sell for more than $20 a bottle — but they also don’t taste like the grape-juicy knockoffs of yore. Some have even been well-reviewed by wine snobs.

As for near-beer options, well, they’re not your grandpa’s O’Doul’s. Heineken has debuted its “O.O” product, which according to Food & Wine magazine “certainly isn’t bad,” and to my untrained palate is hard to distinguish from a traditional lager. Other brewers are adding something extra: Brooklyn Brewery uses a new brewing method for it’s non-alcoholic beer, dubbed “Special Effects,” retaining the malty flavor while cutting the alcohol. And for those who'd like to switch up their drug-induced buzz, Two Roots Brewery has introduced a THC-infused tipple they're calling "cannabiers." 

For now, non-alcoholic beers comprise a tiny share of the industry in the U.S., but some brewers expect it to grow by double digits in the next few years, alongside other trends in health and wellness. Industry-wide growth projections tend to lump the emerging nonalcoholic market in with soft drinks and bottled teas and coffees, all of which could reach $1.6 trillion in global sales by 2025.

Much of the boom has taken place online, with a whopping 315% increase in non- and low-alcoholic beverage sales over the past year compared with a 26% rise in online sales of alcoholic options during that period, according to Nielsen. But now there’s a curious parallel phenomenon of boutique shops known as “dry stores” popping up in major cities selling only high-end booze-free drinks.

Neither the stores nor the products are necessarily catering to people struggling with alcoholism. The taste and ceremony of mocktails could serve as a trigger for some in recovery, raising their chance of a relapse.

But for many who can afford these products, the potential benefits of having healthy, tasty and socially acceptable alternatives in an alcohol-saturated society can be a very good thing. It can help create space for the growing populations motivated by blogs like tiredofthinkingaboutdrinking.com and bestsellers like Sober Curious and Quit Like a Woman, which make the case that sobriety can bring about better sleep, less anxiety, more productivity and personal empowerment. Celebrity spokespeople have emerged including Elton John and Chrissy Teigen, and some have debuted their own mocktail lines, including Katy Perry’s De Soi and Blake Lively’s Betty Buzz.

There are also environmental benefits to consider at time when climate pressures are increasingly bearing down on wine and beer producers. Drought, heat and wildfires scorched the Pacific Northwest last year, causing incredibly costly damage to vineyards, devastating yields and pushing up wine prices. Barley harvests have also been hit hard — falling 38 % in Canada last year and 33% in the U.S. because of hotter, dryer growing conditions. Hops is also becoming increasingly difficult to farm. And brewing beer is a process that guzzles seven gallons of water for every gallon of beverage produced, making it more and more difficult and to run profitable breweries in water-strapped regions.

The upshot is this: Alcohol producers will need to develop new growing methods for climate adaptation and consumers will need an increasing range of options — including, perhaps, wine and beer alternatives that don’t require grapes, hops and barley at all. As Millennials and Generation Zers age, and as costs continue to rise for traditional beers and wines, nonalcoholic concoctions deserve to become more popular.

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• New Zealand Is Banning Tobacco. Who Will Follow?: David Fickling
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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Amanda Little is a Bloomberg Opinion columnist. She is a professor of journalism and science writing at Vanderbilt University, and the author of "The Fate of Food: What We'll Eat in a Bigger, Hotter, Smarter World."

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