US non-alcoholic beverage brands join together to spur industry forward: 'We're going to see a continual and accelerated evolution of products'

The basic remit of the organisation is to create a central entity for brands and other stakeholders. Formed by entrepreneurs and more than 40 brands across the spectrum of alcohol alternatives, the association has already spotted areas of opportunity for the sector in the US - ranging from differentiated products to the potential of DTC sales.

One of its aims is to provide support and resources for members; as well as creating a single, unifying voice for the industry. This could be all the more important as brands face an absence of universal regulations or industry standards, while often lacking guidelines for international trade.

From a wider perspective, its role will be to help carve out the category and drive awareness and understanding among stakeholders such as retailers, suppliers and complementary industries - and of course, among consumers themselves.

In the US, a non-alcoholic alternative is one with 0.5% ABV or below. The ANBA uses the word ‘adult’ in its name deliberately, because such products are marketed towards adults of legal drinking age - in contrast to other beverages such as soda, juice or water.

And this is one of the first missions of the association: to carve out the non-alcoholic category as a clear proposition.

“There needs to be an increased understanding of the definition of “non-alcoholic,” and that’s part of ANBA’s education mission,” Marcos Salazar, the association's president, told BeverageDaily.

“We’re aiming to define a new category and promote clarity of understanding around that – not just among consumers, but across the beverage industry."

A current lack of awareness is perhaps the biggest challenge for the industry, says Salazar: but he views this in a positive light.

"Because we’re such a young, rapidly growing industry, we see it more as an opportunity than a challenge, but we’re very focused on general awareness. Only a small part of the population knows beverage options like these are available, so part of our job as an association is to build out that awareness.

“ANBA wants to take that burden – of spreading the word – off of our members. We’ll be able to drive awareness across the entire ecosystem: consumers, retailers, restaurants and bars, hospitality, wholesalers, distributors. Part of our advantage is that our members are quality-focused at a time when consumers are as well, and when people are increasingly open to and eager for non-alcoholic beverage options.”

Low and no alcohol products often rely on tastings to introduce people to the category. With a lack of social occasions and educational opportunities, the pandemic has therefore presented a considerable challenge. However, once those hurdle has been overcome, the reaction from consumers is extremely positive, says Salazar.

“What we’ve heard is consumers across the board, from all walks of life, say that once they’ve had one of our members’ products, their mind is blown,” said Salazar.

“We now are producing brands that taste even better than their alcoholic alternatives. For instance, Athletic Brewing Company won Brewbound’s “Craft Brewery of the Year” – and that includes both non-alchoholic and alcoholic beers.

“One of the unique dynamics within the NA industry is that we can ship direct-to-consumer, rather than selling through partners like retailers or restaurants. And that’s where our awareness efforts play a big role.

"Once consumers learn there are new, delicious options, they can purchase them and get delivered at the door that will shift the industry to be even more consumer driven. That level of engagement with consumers – allowing us to foster a sense of community – has already started to take off with simply word-of-mouth marketing.

“That creates an atmosphere of relationships, of community, and really positions the NA industry well for the long term.”

Now is the time

The global market for non-alcoholic drinks is expected to grow to $30 billion by 2025, according to Global Market Insights. In the U.S., NA spirits grew 113.4% in the last year, when compared to the year before. NA beer is the fastest-growing segment in the industry and drove 31.7% of growth and NA wines grew 39.4%, according to NielsenIQ.

“We’ve seen a confluence of forces, both internal and external, that have contributed to the momentum that’s been building behind non-alcoholic beverages," notes Salazar.

"Over the past several years, a lot of innovative entrepreneurs have, for the first time, created high-quality, and delicious NA beverages. We have an amazing group of entrepreneurs and these forward-thinking business people are really redefining what the concept of drinking is.

“There’s also been a sea change in how much people want to be more mindful from a lifestyle standpoint, healthier and happier. That’s been one of the big drivers, an entire cultural shift in how people view alcohol and how it fits in their life.

“Finally, the pandemic has really forced people to pause and look at how they want to live their life, people taking more time to think about their decisions and the long-term impacts.

“All of these trends have converged, driven by exciting innovation and societal factors, to create an environment where the NA category is truly poised to continue and sharpen our rate of ascent."

So where’s it all going next?

“One of the biggest things that’s going to evolve in the next couple years is sheer presence: You’re going to see NA offerings in so many more stores, and more strategically positioned on the shelf and within the overall footprint of stores, so that NA beverages won’t be as hard to find from a purely practical standpoint," said Salazar.

"Additionally, NA beverages will be in infinitely more restaurants and bars and in every social situation that you’re in.

“We’re also going to see a continual and even accelerated evolution in the types of products out there. In the beer space, we’re already seeing much more variety as breweries begin to expand their flavor profiles, similar to the way the craft beer movement has grown.

"We’re going to see a lot more spirits, both alternatives to alcohol as well as those that aren’t really alternatives, but instead carving out their own space. One of our members, Wilderton, brews a zero-proof botanical distillate. Another, For Bitter For Worse, grew out of a couple frustrated by the lack of non-alcoholic ingredients to put into a cocktail, so they launched an online store. That’s redefining what a cocktail is, creating a whole new category.

"And in the ready-to-drink cocktail space, there are completely new flavor profiles that don’t shadow what alcoholic cocktails have done, but are pioneering a new way of drinking. The Mocktail Club offers ready-to-drink cocktails that are low-calorie and without refined sugar.

“From a cultural standpoint, we’re at the beginning stages of what it means to “have a drink” or “go out for a drink.” It no longer needs to involve the assumption that you’re going to have an alcoholic beverage.”