Dry January: Will Alcohol Beverage Retailers Pivot To Match New Consumer Tastes?
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As "Dry January" continues in earnest, with the trend gaining more traction every year amid a growing taste for teetotalling, will retailers need to pivot to match the changing tastes of the American consumer?
The answer appears to be a firm yes, at least for some established players on the supply side of things.
According to CSP, Molson Coors is betting big on the growth of the non-alcoholic (NA) beer and beverages market. Over the course of the past 12 weeks, Coors' non-alcoholic beers have ticked upward by 89%, gaining a 2.1 share of the total market segment.
And while dry or damp January may be the impetus behind some of these figures, an overall attraction to the notion of alcohol-free beer, wine, spirits, and seltzers seems to be persistent year-round, according to Molson Coors exec Tracey Bien Schenck.
"Dry January is still very much a thing for people,” Schenck said, per CSP. “But we’re also seeing that mindful drinking is becoming a year-long behavior for some consumers, which means more demand for options like Peroni 0.0% and Blue Moon Non-Alcoholic and the rest of our non-alc options, like the upcoming Naked Life.”
Naked Life nonalcoholic cocktails are set to be launched by the company in March of 2025.
Non-Alcoholic (NA) Beverages Represent a Growth Segment
As Modern Retail reported, there is a growing consumer interest in non-alcoholic beverages writ large among the U.S. population.
Citing Jan. 3 survey data from Disqo, the outlet indicated that the percentage of respondents planning to reduce or eliminate their alcohol consumption in January rested at 45%, or nearly half of those polled. Further, the number of respondents suggesting they were interested in trying a new NA beverage doubled from previous results acquired in June of 2023, resting at 16%.
Competition is fierce to gain the attention of these new customers, however. While Molson Coors launches NA beers, others are also pushing new wines, spirits, and seltzers in the same health-oriented category. Per CSP, one upstart competitor — Vivazen Alcohol Alternative Seltzers — heavily leans on its zero alcohol, carbs, calories, caffeine and sugar formulation to attract eyeballs, also aiming to emphasize the "fun" nature of sociable partygoing with a blend of five mood-boosting botanicals in the product. Famed seltzer brand White Claw also recently announced a 0% alcohol entry into its lineup.
Stephen Jepson, EVP of advertising effectiveness at Disqo, described January as “the NA industry’s Super Bowl,” as quoted by Modern Retail.
“Beverage brands looking to win consumers have an opportunity to gain lasting impact,” Jepson said. “But it will be important to break through the clutter and ensure their advertising messages reach interested consumers and resonate with their motivations.”
Surgeon General's Warning Makes Headlines, Alcohol Sales Volume Endures Recent 'Reset Year' Before Normalization Expected
Even as the U.S. Surgeon General, Dr. Vivek Murthy, reiterated the dangers of alcohol consumption, the industry itself continues to successfully weather various headwinds.
According to the IWSR (formerly known as the International Wine and Spirits Record), total beverage volumes fell by 3% in 2023, with value itself ticking upward by just 1%. Described as a bit of a "reset year" by the publication, the United States is nonetheless projected to be the world's leader in mature alcohol markets as normalization occurs.
“High inventory levels are expected to persist into 2024 and potentially beyond, with normalisation now not expected until 2025 or early 2026,” says Marten Lodewijks, president of the U.S. Division at IWSR. “Consumer demand will have to increase in order to facilitate the movement of stock through the distribution chain.”
Given a recent Gallup poll result which indicated that younger Americans were choosing to drink less than their older counterparts, particularly when compared to survey results from years or decades previous, it seems that two distinct markets may be emerging: one mature market with room for growth in less expensive malt beverage and private label categories -- as CNN Business suggested -- and a nascent, high-growth space for NA beverages.