After years of funding and innovation, the low‐ and no‐alcohol sector is gaining recognition in established markets as retailers and bars carve out more room for the sector.
The no‐alcohol ‘spirits’ class rose by 13% in quantity globally final yr, however from a low base, in response to IWSR knowledge. The phase is forecast to extend by 10% in 2025, and by 9% in 2026, outperforming the broader alcohol phase. The US is anticipated to be a key driver of no‐ alcohol, which is predicted to soar by 18% by quantity (CAGR 2024‐2028), primarily based on IWSR’s No‐ and Low‐Alcohol Strategic Research 2024.
“It’s been a powerful, maturing yr for low/no,” says Tim Blake, co‐founding father of Crossip Drinks, who notes that “acceptance has grown, particularly within the on‐commerce,” the place bars have devoted sections for alcohol‐free drinks.
He additionally factors to its potential globally: “Europe, Asia, and rising markets are exhibiting actual curiosity. This has been the yr the place the class lastly felt prefer it belongs within the wider drinks world, somewhat than sitting alongside it.”
Everleaf founder Paul Mathew sees the low‐ and‐no house as one of many healthiest and most resilient areas of the drinks business, even amid financial pressures.
Whereas customers are slicing again on discretionary spending, he says the class continues to indicate yr‐on‐yr development in Everleaf’s markets, although not on the similar tempo as in earlier years, he maintains.
Blake cites a problem for the business by way of the regulatory atmosphere. “Alcohol‐free ‘spirits’ are handled as meals merchandise in most markets, which implies each nation has totally different guidelines about components, processing, pasteurisation, shelf life and labelling. Shifting a product from the UK into a brand new market usually requires a totally totally different strategy.
“I’ve already had conversations with UK authorities our bodies this yr about worldwide rules which can be slowing down British producers. A clearer, extra standardised understanding of what alcohol‐free ‘spirits’ are would make an enormous distinction.”
In a landmark ruling final month, the European Court docket of Justice decided that alcohol‐free drinks can’t be known as ‘gin’, even when labelled as ‘non‐alcoholic’. This might trigger some alcohol‐free manufacturers to rethink their positioning to keep away from infringing on gin within the EU.
One other robust space is the retail channel, which is “dominated by large gamers” with non‐alcohol alternate options of established manufacturers, says Blake.
However it’s an thrilling time for the business. That is evident by the variety of investments within the class. In 2024, Seedlip proprietor Diageo absolutely bought US model Ritual Zero Proof and French agency Rémy Cointreau took a minority stake in alcohol‐free producer JNPR Spirits. This summer season, AG Barr, the mother or father agency of Funkin Cocktails and Irn‐Bru, took full possession of UK‐primarily based zero‐ABV model Strykk. And final month, Banks Botanicals in Australia’s Yarra Valley was bought by native spirits producer Alchemy Distillers.
One latest time period that has been common with many within the business is ‘zebra striping’, which emerged in KAM’s 2024 Low and No: Consuming Otherwise examine. Diageo’s Distilled 2025 report in January additionally known as it out as a development, wherein individuals swap between alcoholic and non‐alcoholic drinks in a single social event.
Lyre’s
Final yr noticed the beginning of recent management for Lyre’s. Calirosa Tequila founder David Gimpelson joined Lyre’s as CEO and is betting on the US for development. To prime it off, the model not too long ago underwent a significant international rebrand that might enhance its shelf visibility.
Feragaia
The Scottish non‐alcoholic model is now a part of R&B Distillers’ portfolio, the spirits and drinks enterprise of Chanrossa, which additionally owns Scotch whisky producer Isle of Raasay Distillery. Chanrossa took a majority stake in Feragaia as a part of its “objective of making Scotland’s main new‐wave spirits and drinks enterprise”.
Mom Root
After its profitable look on Dragons’ Den in October, alcohol‐free apéritif Mom Root noticed its gross sales soar by 2,000%. The model secured a 5% funding from entrepreneur Steven Bartlett on the BBC present, and has already concluded a wider £1.1m funding spherical
Associated information
Low-and-no takes off in APAC bars
Waitrose low-and-no ‘spirits’ gross sales up 85%
‘Spirits’ the UK’s second favorite low-and-no possibility
