Boom in Non-Alcoholic Beverage Market: $4 Billion Growth Projected by 2028

The non-alcoholic beverage market is experiencing significant growth driven by changing consumer behavior and a preference for alcohol-free options. According to a recent IWSR study released on Wednesday, December 18, this segment is projected to generate an additional $4 billion in revenue by 2028, with a compound annual growth rate (CAGR) of 7% in volume. This trend is particularly notable in key markets such as the United States and Brazil, which are leading international figures.

The report highlights that the non-alcoholic segment is attracting more new consumers than low-alcohol options. Between 2022 and 2024, the number of buyers in the non-alcoholic category increased by 61 million compared to 38 million in the low-alcohol category. This trend is especially prominent among younger demographics, such as Generation Z and millennials, who consume these beverages more frequently and in larger quantities than older groups.

In the United States, the projected 18% CAGR through 2028 is attributed to diversification within non-alcoholic subcategories. In Brazil, where a 10% increase is expected, the segment remains almost entirely dominated by non-alcoholic beer. Markets such as Canada and Australia, while starting from smaller bases, are also forecast to see appealing growth rates of 7.5% and 5%, respectively. Conversely, countries like Spain, Germany, and South Africa show more gradual growth patterns.

A reduction in alcohol consumption among buyers of non-alcoholic and low-alcohol categories is reshaping the industry landscape. Since 2000, per capita consumption of pure alcohol in liters has decreased by 20% across the ten markets analyzed. This shift is driven by broader motivations beyond simply moderating alcohol intake, with factors such as flavor, availability, and branding playing increasingly important roles.

Innovation is a key factor in the segment's evolution. Brands like Free AF are incorporating functional ingredients that replicate the sensations of alcohol, while others such as Parch Spirits and Cocktails include adaptogens and botanical extracts. Products beyond traditional categories, such as sparkling teas and hop-infused waters, are also gaining traction.

Brand loyalty varies widely depending on the market and the age of consumers. In countries like Spain and Japan, buyers often explore multiple brands within the same category. In contrast, in Brazil and the United States, consumers tend to exhibit stronger brand loyalty. Younger consumers, who are more active in these categories, show a stronger preference for specific brands and sensory features compared to older adults, whose consumption is more occasional.

In emerging markets such as Brazil, South Africa, and the United States, limited availability remains the main obstacle to growth. Meanwhile, in established markets like Spain, France, and Japan, this barrier is less significant. Expanding offerings in channels such as e-commerce and hospitality is helping to address this challenge.

Although price is not a major deterrent for most consumers, adjusting the cost of non-alcoholic beverages in well-established markets like the United Kingdom and Spain could encourage further growth. This trend is reflected in the gradual convergence of prices between non-alcoholic and alcoholic options as the category matures.

These shifts in consumer behavior and brand strategies suggest that non-alcoholic beverages are evolving from a mere alternative into a dynamic category with its own identity. The future of this segment depends on continuous innovation, expanded availability, and stronger connections with younger generations seeking more complex and satisfying experiences with every sip.