IWSR, a beverage alcohol research company, released an analysis of the alcohol-adjacent category, and found that the market is continuing to rise in popularity and market share. Alcohol-adjacent products include non-alcoholic and functional beverages. Read the full report here.
Functional products, or mood-enhancing beverages, often contain CBD, nootropics and adaptogens. IWSR does not include THC products within this category. Functional products, according to their research, “focus on how their ingredients will make consumers feel, and are seen as an alternative way to enjoy traditional alcohol occasions – thereby appealing to health-conscious (and stressed-out) consumers.”
Several products have already come to market, included Recess, water infused with hemp and adaptogens, Kin Euphorics which has adaptogens, nootropics and botanicals (and was co-founded by supermodel Bella Hadid) and HOP WTR, a hop-filled, non-alcoholic sparkling water brewed with adaptogens. The reported effects of these products vary, but are often associated with relaxation and an enhanced mood.
What They Found
The entire no/low alcohol segment of the US is valued at roughly $2.2 billion dollars, and is expected to continue growing. The report found that no-alcohol products have taken a greater share of the no/low segment across each market, including beer, cider, wine, spirits, RTDs and alcohol adjacencies. Within that segment, IWSR found that the alcohol adjacent market is valued at around $98 million. Their forecasting indicates a +12% volume compound annual growth rate (CAGR) by 2025 in the US. They also noted that 33% of the US adult population identify as no/low alcohol buyers.
While federal and state laws still make things difficult, the CBD segment remains a leader within the alcohol-adjacent market in the US. It’s expected to continue growing. This makes sense, as 2022 was declared ‘The Year of Cannabis’ just a few months ago.
What it Means for You
If you haven’t done so already, it’s time to diversify your non-alcoholic beverage program. There are so many offerings on the market now, there’s really no excuse. If you’re only serving sodas and juices, you’re missing out on top-tier revenue. As discussed at last year’s Vibe Conference, guests are happy to pay cocktail prices for creative non-alcoholic offerings. IWSR found that the average consumer doesn’t fully understand alcohol adjacencies, but they’re interested in learning more, and that’s going to lead to major growth in the category. And if you’re feeling really bold, you can even hire a cannabis sommelier…
Interested in hearing more? IWSR will be presenting at this year’s Vibe Conference. Operator registration is open now.
We look forward to welcoming you to Vibe Conference 2022 this April 25-27 at Omni La Costa Resort and Spa in Carlsbad, California. Registration is open now, reserve your space here.
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