Non-alcoholic Beverages Market Size, Share & Trends Analysis Report By Product (Carbonated Soft Drinks, Bottled Water), By Distribution Channel (Food Service, Retail), By Region And Segment Forecasts, 2022 - 2030

Report Overview

The global non-alcoholic beverages market size was valued at USD 833.1 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 5.6% from 2022 to 2030. According to the Bacardi Cocktail Trends Report, in January 2022, in partnership with The Future Laboratory, approximately 58% of consumers globally are shifting to non‐alcoholic and low‐ABV cocktails and beverages. With the expanding acceptance of the no-alcohol and low alcohol category by consumers, manufacturers in the market are catering to the new trends and have been innovating the current product portfolio, which is likely to bode well for future growth. The COVID-19 pandemic restrictions prompted the incubation of new non-alcohol beverage trends in the market. With rising health concerns due to the virus, consumers are shifting to healthy drinks for usual days and even on occasions. The big brands are jumping in with mass offerings in categories, such as bottled water, low-carb drinks, craft, and flavored mocktails options. Such factors are likely to support the growth of the market.

The ripple effect of consumers opting for non-alcohol drinks and beverages has led to innovation for a whole new segment of premium, complex-tasting soft drinks aimed at adult palates. According to a Waitrose Food and Drink Report, October 2021 stated that searches for alcohol-free drinks continue to increase by 22% every year. Brands have been keeping up the pace of new trends by launching or expanding existing product lines. For instance, in May 2020, Good Earth-U.S.-based tea brand expanded its product offering in the U.K. The portfolio includes a range of fruit & herbal, green and black teas, and original and flavored kombucha, each blended with natural ingredients. 

Additionally, growing concern about the COVID-19 pandemic and increased awareness of health issues are shifting consumer preferences toward healthier beverages and non-alcoholic beverages. Consumers aim to improve physical health by opting out of beverages that contain no alcoholic content. Zero-proof spirits, alcohol-free cocktails, low calories, and low carb drinks are lately preferred by the consumers in countries such as the U.S. and U.K., according to the Beverage Trends Report of 2021 by Goliath Consulting Group. Such trends have opened door to new opportunities for beverage manufacturers. For instance, in October 2021, Ritual Zero Proof announced the launch of its liquor replacement by rolling out its Gin, Whiskey, and Tequila Spirit Alternatives at Whole Foods Market stores in the U.S. and also available on Amazon.

Major retailers in the market for alcoholic and non-alcoholic drinks have been experiencing a surge in demand for such palettes with new flavors and premium ingredients. According to Instacart (American retail/grocery company) trends expert and Well+Good Wellness Trends advisors, non-alcoholic drinks such as carbonated drinks and alcohol-free cocktail sales on Instacart are up 37% in 2021 as compared to 2020. Similarly, Whole Foods has also witnessed a surge in such demands in 2020. Supermarkets are likely to expand the existing section for these beverages, expanding the brand portfolio. For instance, in May 2020, Aldi forays into alcohol-free spirits, which are vegan & sugar-free, priced at USD 11.12 per bottle. Along with product portfolio expansion, many key players are acquiring non-alcoholic brands to expand their brand portfolio. For instance, in January 2020, Diageo acquired a minority stake in Ritual Zero Proof, a non-alcoholic spirits brand. The acquisition would help the company expand its brand portfolio and launch new products in the future. Such growth trends are likely to bode well for future market growth.

Product Insights

The bottled water segment held the largest market share in 2021 and is expected to maintain its dominance during the forecast period. Rising consumer consciousness toward the health benefits of consuming bottled water is projected to drive segment growth during the forecast period. An inclination towards bottled water rather than ordinary water, particularly among younger consumers, drives product sales. Observing this trend, several restaurants are providing various types of bottled water to meet consumer demand. Water seems to have hit a sweet spot with health-conscious buyers. The rapid expansion of restaurants in the U.S. is also predicted to create a significant demand for bottled water in the upcoming years.

However, the juices segment is projected to register the second-fastest growth from 2022 to 2030. The rising importance of leading a healthy lifestyle is expected to boost the product demand. Furthermore, new product launches by key manufacturers, such as Tropicana and The Coca-Cola Company, are projected to drive the market growth. For instance, in September 2020, PepsiCo’s brand Tropicana re-launched its juice range by adding Tropicana Lean in three flavors such as Citrus Fruit, Mixed Berries, and Tropical Fruit, each containing 40% less sugar and 40% fewer calories. In addition, rising concerns regarding various health issues, including obesity and nutritional deficiencies, are anticipated to boost the demand for these products, thereby supporting segment growth.

Distribution Channel Insights

The retail distribution channel made a larger contribution to the global market in 2021. The retail channel includes hypermarkets & supermarkets, online, and other channels. Supermarkets & hypermarkets in the sub-category hold the maximum share due to the availability of a wide range of brands and products under one roof. Many supermarkets, such as Whole Foods, Target, Aldi, and Walmart, are expanding their offerings in the alcohol-free segment. For instance, in July 2021, Woolworths expanded alcohol-free wine, beer, and spirits in response to a surge in demand from consumers. The retailer increased its product, offering more than 30 different products containing low or zero alcohol content. Such initiatives are likely to propel segment growth.

In the retail channel, the online distribution channel is anticipated to grow at a higher CAGR during the forecast period. New entrants in the market are launching products through e-commerce platforms such as Amazon, Walmart, and more due to ease in entry barriers on this platform. For instance, in April 2021, Figlia, a modern non-alcoholic Aperitivo company, announced the launch of its product offering through the online website at DrinkFiglia.com. Apart from new entrants, premium brands are also foraying through online platforms. For instance, in January 2022, SOLÉ launched expensive bottled water on Amazon through an exclusive online partnership with Beverage Universe.

Regional Insights                                                                                                  

The Asia Pacific emerged as the fastest-growing region in the market, owing to the presence of various untapped markets, huge population, and increasing disposable income. The region led by emerging economies, such as China, India, Thailand, and Malaysia, has a competitive advantage over other areas due to the availability of low-cost labor and raw materials. Increasing demand for various alcohol-free beverages from these regions is expected to drive the market. Make in India, 100% FDI in food, and the One Belt One Road (OBOR) Initiative are attracting new entrants to establish their production & distribution facilities in the Asia Pacific. For instance, in October 2021 Anheuser Busch InBev India (AB InBev) launched Budweiser Beats-a debut in the non-alcoholic energy drink category available in the size of a 250ml can.

North America accounted for the second-largest market for this industry in 2021, owing to the presence of developed economies and the early adoption of soda products. The region, led by the U.S., is home to many globally renowned beverage manufacturers such as PepsiCo and the Coca-Cola Company. The growing obesity problem in the U.S. and Mexico and taxes on sugar products imposed by the government are acting as restraints for CSDs and as drivers for products made by low-calorie non-nutritive sweeteners.

Key Companies & Market Share Insights

The industry is highly competitive, owing to many small and big players. Product differentiation is a crucial factor in this industry, which is driving research and innovation activities. Rapidly changing technology coupled with demanding customers results in pressure for product augmentation and new product development. Companies are spending heavily on research for developing new products to meet standards and regulations imposed across the regions. Product line stretching and extension has been a significant factor in achieving success in this industry.

In the case of consumer goods, switching cost for the customers is meager, which means companies need to engage their customers through valued offerings with efforts to develop customer experience by creating more customer-centric organizational culture. Apart from a quality product, promotion is one of the crucial processes in improving brand recognition. Companies operating in this market are heavily spending on promotional activities, trying to create a unique brand image that provides a competitive edge over others.

• In January 2022, Katy Perry launched the alcohol-free beverage brand De Soi with her business partner, Morgan McLachlan. The product line of three sparkling non-alcoholic aperitifs in three flavors, such as Golden Hour, Champignon Dreams, and Purple Lune.

• In January 2022, The Coca-Cola Company announced the launching of Fresca canned cocktails in partnership with Corona's U.S. manufacturer.

• In October 2021, DrinksDeli launched a zero alcohol beverage online platform in India. The company plans to sell cocktail mixers and packaged coffee.

Some of the key players operating in the global non-alcoholic beverages market are:

• Nestlé

• PepsiCo

• Unilever

• Keurig Dr Pepper Inc.

• The Coca-Cola Company

• Cott Corporation

• Danone S.A.

• SUNTORY BEVERAGE & FOOD LIMITED

• Asahi Group Holdings, Ltd.

• Red Bull

Non-alcoholic Beverages Market Report Scope

Segments Covered in the Report                

This report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global non-alcoholic beverages market based on product, distribution channel, and region:

• Product Outlook (Revenue, USD Billion, 2017 - 2030)

  • Carbonated Soft Drinks

  • Bottled Water

  • Tea & Coffee

  • Juices

  • Others

• Distribution Channel Outlook (Revenue, USD Billion, 2017 - 2030)

  • Food Service

  • Retail

    • Hypermarkets & Supermarkets

    • Online

    • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • Japan

    •  India

  • Central & South America

    • Brazil

  • Middle East & Africa

    • South Africa