In recent years, the market for non-alcoholic beverages has exploded. The current value of this segment is estimated at $1.41 trillion, and it is expected to increase to $2.68 trillion worldwide over the next decade (7.41% CAGR).
More than just a simple alternative to alcoholic beverages, products in this space have expanded to tantalize not just the sober-curious but also consumers seeking functional and healthful benefits in their potables.
What product innovations currently dominate the market, and which functional ingredients are trending right now? Here’s what food-service operators, beverage brands, and CPG manufacturers should be aware of.
Key Product Innovations
Whether a beverage is alcoholic or not, the best way to gain consumer esteem is by tasting good. Initially, mocktails were made to mimic the flavors of their alcohol-laden counterparts. As the sober-curious movement grew, however, the demand for innovation followed.
Today, trend leaders are focusing not just on ingredients but on processes that maintain authentic flavors or produce complex profiles. For example, process engineering company Logichem created GoLo technology to reduce alcohol in fermented beverages like wine, beer, and cider, delivering low-alcohol alternatives without loss of flavor.
Alfa Laval’s dealcoholization system uses low-temperature processing to create low- or no-alcohol beer without taste deterioration. It also boasts cost-effective and energy-efficient operation over traditional beer manufacturing.
Advances in technology and equipment designed for alcohol-free distillation are fueling this segment of the beverage market.
Functional Ingredient Trends
Ingredient and flavor trends in beverage markets often parallel food markets, so it’s no surprise that the rapidly evolving non-alcoholic beverage segment would focus on trends like wellness and functional ingredients. Adaptogens, nootropics, and botanicals are all ripe for exploration. Which ingredients are trending now?
In the adaptogen category, ashwagandha tops the list, thanks to promises of relaxation to stand in for the sedative effects of alcohol. Brands like JAS and High Rise Beverage Co. offer alcohol-free, functional cocktails with ashwagandha.
Additionally, De Soi has jumped on the functional fizzes trend with products containing reishi and lion’s mane mushrooms, claiming to offer a “feel-good buzz without the booze.”
Nootropics like caffeine and GABA can take the experience in a different direction, improving alertness and, in some cases, purporting to reduce anxiety to promote alcohol-free social experiences.
The surge in botanical additives, from herbs and spices (basil, cardamom, etc.) to edible flowers to floral infusions (lavender, jasmine, nasturtium, etc.), can enhance flavor complexity and reach consumers looking for the health benefits of these ingredients.
Related: Transforming Functional Nutrition: Symrise x Infusd Nutrition Partnership
Brand Positioning
Non-alcoholic beverages are touted as a healthier way to socialize for the sober and sober-curious. However, the growing market for functional beverages means that mocktails can do double duty, with ingredients that contribute to relaxation, stress relief, and even cognitive support.
The new approach also favors all-day versatility, with drinks not confined to the cocktail hour but extended to breakfast, brunch, and daytime socializing as well.
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Regulatory Challenges
Non-alcoholic beverage manufacturers face many regulatory challenges, including compliance with laws regarding labeling claims. Manufacturers must follow specific parameters for claims like “low alcohol” and “no alcohol” — if a beverage contains 0.5% or more ABV, it is considered alcoholic and subject to excise tax.
In addition to federal laws, some states have their own rules and laws. Manufacturers may also be subject to the National Bioengineered Food Disclosure Standard and regulations related to dietary supplements in beverages, depending on product ingredients.
It can be tricky to navigate these waters while staying ahead of trending consumer expectations.
Non-Alcoholic Beverages Are Worth the Investment
The non-alcoholic beverage market is a rapidly growing segment with high potential for brands willing to explore new trends and innovate. With avenues like healthy socialization, functional ingredients, and novelty flavor profiles attracting consumers, opportunities to gain traction abound.
To learn more about Symrise and more food trend insights, contact the team today!
