Something is brewing – and this time, it’s not beer.
LikeFolio consumer trend data shows demand for alcohol-free beverages is ticking higher, with buzz around non-alcoholic drinks up 18% just from last quarter:
In Derby City Daily, we’ve been keeping you in the know about a powerful Main Street shift toward health and wellness.
Consumers switching to non-alcoholic “bevvies” is one more piece of that puzzle – and yet another way we can play this macro trend as investors.
Increased awareness around the risks of alcohol use has younger generations drinking less booze than their predecessors.
In fact, a study by Berenberg Research found that Gen Z drinks 20% less than millennials per capita – and that’s particularly significant when you consider millennials already indulge less than Gen X and Boomers did at their age.
As investors, there’s an opportunity here if we can answer the question: What are they turning to instead?
And for that answer, there’s no better place to turn to than our very own consumer insights database.
Here’s what consumers are trading in booze for – and at least one way you can play this trend for profits…
Consumers Are Trading in Booze for…
As it turns out, consumers are swapping booze for beverages that contain functional health ingredients.
Functional health ingredients are exactly what they sound like: ingredients that provide some sort of health benefit to the consumer. Most alcoholic products provide a buzz… with no health benefits attached.
The top two ingredients gaining traction in this category, according to our social media machine, are adaptogens and nootropics – known to provide tangible, feel-good effects like reduced stress, anxiety, and increased energy.
Compared to last year, nootropics is trending 85% higher with consumers while adaptogens buzz has risen 70%:
A deeper dive into the data shows one particular adaptogen gaining leaps and bounds: ashwagandha, most commonly known for its stress-relieving properties.
Consumer chatter around ashwagandha has more than doubled since last quarter alone (149%) for a 249% surge higher year-over-year (YoY):
With this kind of demand up for grabs, you can bet savvy non-alcoholic beverage producers have taken note – and adapted their offerings accordingly.
Products featuring the sought-after nootropics and adaptogens are surging in popularity, with brands like HOP WTR and hiyo gaining traction with consumers – despite their relatively hefty price tag. (A 12-pack will set you back between $36.99 and $44.99.)
These brands aren’t currently investable opportunities… But there is one more player in this space I want to bring to your attention.
No Booze? No Problem – This Brewer Has Just the Thing
The culture around alcohol use might be shifting but booze companies are nothing if not adaptable – and Budweiser, aka AB InBev (BUD), is leading the charge.
Budweiser has proven its ability to lean into growing consumer trends with new products to meet just about any need – booze-free options included.
Its product portfolio includes a non-alcoholic version of its classic brand, Budweiser Zero – which became a staple at last year’s World Cup in Qatar:
Plus, plenty of other offerings like Hoegaarden Rose 0.0%, Jupiler 0.0%, and more…
All of which is having a real impact on BUD’s Consumer Happiness levels, which are currently 77% positive:
And with double-digit revenue growth in 2022, AB InBev’s results speak for themselves.
Bottom line: The companies that get ahead of key consumer macro behaviors are best positioned to thrive.
We’ll continue to monitor the non-alcoholic drinks sector for under-the-radar opportunities – so stay tuned to Derby City Daily.
In the meantime, check out our coverage on another beverage player reaping the benefits of this health and wellness trend right here for more investable ideas.
Until next time,
Andy Swan
Co-Founder