The Rise of Functional Drinks in the Non-Alcoholic Market

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Since the onset of the pandemic, there has been a noticeable surge in non-alcoholic options at bars and supermarkets worldwide, coinciding with a decrease in alcohol consumption among younger demographics. The market now offers a wide array of choices, from zero-proof spirits in mocktails to alcohol-free beers that closely mimic their alcoholic counterparts. This trend has been further fueled by the introduction of entirely new non-alcoholic beverages claiming to offer health-enhancing properties.

The Rise of Functional Drinks in the Non-Alcoholic Market

The Thriving Non-Alcoholic Market

The Thriving Non-Alcoholic Market

The low- and no-alcohol market, valued at over $13 billion (€12 billion) globally according to IWSR Drinks Market Analysis, has experienced significant growth, with a $5 billion (€4.7 billion) increase in value since 2018. Legacy alcohol companies are expanding their non-alcoholic offerings to attract new consumers and compensate for declining alcohol sales. Anheuser-Busch InBev, for instance, reported higher-than-expected sales of non-alcoholic beers while experiencing a drop in beer sales in North America.

The Rise of Functional Drinks in the Non-Alcoholic Market

The Emergence of ‘Functional’ Drinks

The Emergence of 'Functional' Drinks

Functional drinks, a rapidly growing segment of the non-alcoholic beverage market, are beverages that offer specific benefits beyond basic hydration. These drinks often contain herbal and plant-based ingredients believed to provide health advantages and increased energy. Functional beverages, which now constitute about 10% of the total US non-alcoholic beverage market, are marketed as products that can enhance well-being and performance.

The Rise of Functional Drinks in the Non-Alcoholic Market

Functional drinks go beyond traditional offerings like tea and coffee, now encompassing a variety of innovative ingredients and wellness-focused marketing strategies. Companies such as Three Spirit and Collider are incorporating exotic ingredients like guayusa and Lion’s Mane mushrooms to create non-alcoholic beverages that promise to replicate the social and relaxation effects typically associated with alcoholic drinks.

While the functional drinks market continues to expand, health experts caution that consumers should prioritize whole foods over specialized beverages to ensure optimal health outcomes.

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