Throughout 2021, sales of low-alcohol and non-alcoholic (NA) beverages were achieved out of the home $3.1 billion compared to just $291 million last year. Last year, the industry made nearly $10 billion across 10 global markets including the US, UK, Japan and Brazil. While the market for these beverages remains small, it’s clear that alcohol-free sipping is growing at an inordinate rate — and showing no signs of slowing down. Does this mean that sober drinking is evolving from an annual January trend into a legitimate industry shift?
Hundreds of new alcohol-free brands have been launched over the past year, including beer, wine, spirits, seltzer, adaptogenic elixirs and the like. While most can be sold online –– with the exception of those containing THC — brick-and-mortar locations have popped up across the United States, and not just in big markets like New York and Los Angeles.
Unlike their full-fledged counterparts, many of these establishments focus on multiple income streams and are transforming the way the American consumer engages with their local bottle shop. Because of the intricacies of the three-tier system, post-ban regulations, and changing laws from state to state, liquor stores are more constrained by such creative freedoms.
Don’t miss one fall!
Get the latest beer, wine and cocktail culture straight to your inbox.
Mel Babbitz opened her new non-alcoholic bottle shop in Pittsburgh, The open road, to not only cater to the growing market, but also to become a watering hole and a welcoming place for everyone – regardless of their attitude towards sobriety. She believes that even a city like Pittsburgh, so steeped in beer culture, has the curiosity and need for alcohol-free spaces.
“[The customer response] was a mixed bag. On a year-to-year basis, at least half of my clients are people who have reevaluated their relationship with alcohol during the pandemic,” says Babbitz. “A lot of people in Pittsburgh are interested in non-alcoholic options; They just hadn’t been asked beforehand.”
When Babbitz started her business two years ago, it was supposed to be a bar, but there wasn’t an ounce of the amount of NA advertising or products out there today. While Babbitz is packing up a pop-up boutique and looking for a permanent space, her store currently stocks 300 individual non-alcoholic products — 90 percent of which she is the sole retailer. Her hope is to move into a space that can be both a boutique and a bar so she can keep her inventory but achieve what she set out to do.
“With our permanent space, I want to evoke the brewery vibes and laid-back pub energy that so many of my customers know and love,” says Babitz. “But I really want to keep the shop aspect. Not selling alcohol really opens up opportunities for what I can do.”
Sam Box, owner of umbrella dry drinks in Alexandria, Virginia, also sees the on-premises-off-premises structure as part of the future of their company. Kasten, who is three years sober, avoided non-alcoholic products in her first year of sobriety because they were so triggering. Eventually, she and her fiancé started seeing more and more new products and ads on social media, and she decided to dip her toes. Kasten began speaking more publicly with her followers about her journey to sobriety and sharing the new elixirs she was trying out — and she was starting to get a response.
“People just started asking, ‘What is this? Where did you get it?’ That was a great sign,” says Kasten. “There was so much new product and there was definitely interest, but people could only get them online.”
Kasten not only has experience in hospitality and retail, but also as an educator. Recognizing this gap in her local market, Kasten signed up for a workshop hosted by the owners of Sans bar, a non-alcoholic bar in Austin, Texas. From October to December 2021, Kasten developed the branding, marketing and business plan for Umbrella Dry Drinks and used it to build a community of emerging non-alcoholic startups like hers.
“It wasn’t just people developing retail models there. A woman in Washington starts a coaching program. A guy in Rochester [N.Y.] founds an alcohol-free bar and organizes events,” says Kasten. “The sober community is fantastic – especially on Instagram.”
Many of the models for these new retail locations include some elements of education and community building and bring others to the table. For Jonny Cummings, owner and purveyor of BrightLife Beverage Co. in Laguna Beach, California, this means making artisanal alcohol-free products from around the world more widely available to the American market. While the three-tier system prohibits individual alcohol retailers from importing their own goods by acting as both a retailer and a distributor, Cummings’ business is able to circumvent this regulation.
“Although we have a bottle shop aspect to our business, we have focused on sourcing and distribution in California since opening in 2020,” says Cummings. “Some liquor stores in the area carry these products, but that’s more of a consideration for the future.”
For Cummings, who began exploring NA products while his wife was pregnant, it’s not just about developing a beautiful retail location. It’s also about being an advocate for those who feel underrepresented by drinking culture overall.
“What makes this business so valuable is all the people who come in and thank me for being here; Thank you for being inclusive,” Cummings says. “It feels good to know that we’re offering something that helps people feel good.”
For many of these retailers, the final piece of the puzzle is getting restaurants on board. Many, like Cummings and Babbitz, have personally asked local restaurants to list their products, or at least consider them.
“There was a beer garden that put up their menu this winter, and I reached out to them to bring some of my non-alcoholic beers,” says Babbitz. “Their response was, ‘We have water and hot chocolate. Thanks anyway.’ makes me angry to this day.”
For many of these new institutions, advocacy is at the heart of their business models. They strive to ensure their customer base feels recognized and celebrated.
“More companies need to emphasize advocacy to break down the stigma surrounding alcohol. Talking to restaurants is a great way to start conversations and make sure they’re making more money, too,” Cummings says. “We need to help each other spread the word.”