Category Archives: Alcohol Trends

Alcohol Trends, Health, Low Alcohol Beer, Non-Alcoholic Beer

Craft Beer and the Anxiety Economy

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On a recent trip to my local grocery store I picked up a 6-pack of Run Wild IPA. I drink a lot of IPAs, so this was not a particularly unusual choice. Except that it was – this particular IPA was non-alcoholic. It was brewed by Athletic Brewing Co. If you are unfamiliar with Athletic Brewing Co., they started out in Stratford, CT in 2017. They grew quickly and today are the 13th largest craft brewery in the country – quite impressive for a brewery whose beer is all non-alcoholic. Such has been their success that they closed down their Stratford brewery and opened new ones in Milford, CT and San Diego, CA. Their success is indicative of the growing popularity of non- and low-alcohol beer in the United States. In 2021, sales of non-alcoholic beer increased by nearly 32%, while sales of low-alcohol beer grew by 4.5%. The Alcohol and Tobacco Tax and Trade Bureau defines a non-alcoholic beer as one that contains less than 0,5% of alcohol by volume. So, what was I doing, purchasing a non-alcoholic beer? Well, recently, I have been consuming quite a few of the IPAs from New Belgium’s Voodoo Ranger series. Those I have been drinking have generally come in at around 9% ABV. Personally, a couple of these are sufficient for me in one sitting, so I thought that having a non-alcoholic option for my third and fourth beer might not be a bad idea. An added bonus, if you are trying to watch your calorie count, is that Run Wild IPA only has 65 calories.

Enjoying a Run Wild IPA from Athletic Brewing Co.

After I purchased my Athletic 6-pack I was surfing the internet when I came across an NPR article on the increased popularity of non-alcoholic beers. As I was scrolling through it, a term that I had never heard before – the “anxiety economy” – caught my attention. According to NPR, the anxiety economy is a catch-all label for “for a set of products — like meditation apps, squishy stress balls, self-help books and online psychiatry services — that are benefiting from increasing numbers of folks striving for lower levels of anxiety and better physical and mental health.” Apparently, anxiety, or at least awareness of it, is on the rise and a whole industry has evolved to meet the needs of those suffering from it. A 2018 study by the American Psychiatric Association found that the national anxiety score (which ranges from 0-100) stood at 51, a five-point increase over the previous year. In particular, Americans were anxious about their health, safety and finances. And this was before the onset of COVID-19. Not surprisingly, the COVID-19 pandemic pushed anxiety levels to new heights. Of course, it’s not just Americans who suffer from anxiety. In Great Britain, around 30% of the population experience an anxiety disorder at some point during their lifetime. Certain groups of people are more likely to experience anxiety than others. For example, people of color tend to be more anxious than Caucasians, people on Medicaid are more anxious than people with private insurance, and Millennials are more anxious than Baby Boomer or Gen-Xers.

The above referenced survey by the American Psychiatric Association found that personal health was a common source of anxiety. In recent years, health consciousness has been a key driver of the growing popularity of non- and low-alcohol beer. A new survey by Nielsen found that close to a third of consumers seek out healthier options – including beer – when they go grocery shopping.  Worldwide, the market for non-alcoholic beer which stood at $22 billion in 2022, is expected to rise to $40 billion in 2032. Folks seeking out non-alcoholic beer are part of what some have termed the “Sober Curious Movement“, while Mark Meek, CEO of IWSR Drinks Market Analysis refers to it as a “moderation trend“. Beer dominates the non/low alcohol segment, accounting for over 90% of sales. An indicator that non-alcoholic beer is becoming increasingly mainstream was the recent announcement that JetBlue would become the first major US airline to offer its passengers non-alcoholic beer. Starting this month (May 2023) JetBlue passengers will be able to enjoy an Upside Dawn Golden Ale while enjoying the view at 30,000 feet. The beer is brewed by (you’ve guessed it) Athletic Brewing Co.

Every year, after the excesses of the holiday season, we have “Dry January”, a month when consumers of alcohol are encouraged to abstain. Dry January has its origins in the United Kingdom and is the brainchild of Alcohol Health Alliance UK, who actually trademarked the term in 2014. Interestingly, Finland introduced the idea of “Sober January” in 1942 as part of its war effort against the Soviet Union.

Not everyone is necessarily onboard with low- and non-alcoholic beer. In a very thoughtful essay for Slate.com, Ian Lecklitner confesses to having a growing vendetta against non-alcoholic beverages. He cites several issues around non-alcoholic drinks, suggesting that they may not be the panacea that they appear. For former alcoholics, the smell (of hops for example) can have a triggering effect. Yet, according to one observer, “those recovering from alcohol addiction are clearly in the target market for non-alcoholic beverages.” Lecklitner makes clear his disdain for an industry that he accuses of “profiting off of addiction’.

While I prefer to not enter into the ethics of non-alcoholic beer, I will say that the latter have improved considerably in recent years. I can recall drinking the occasional O’Doul’s in years past and being singularly unimpressed. As one writer observed, “brewers are now making non-alcoholic beers that are packed with flavor, thanks to new technology and techniques that are reinventing a category that once felt like purgatory.” Apparently, this is due to a raft of innovations such as vacuum evaporation, filtration etc., which allow brewers to extract alcohol from the beer while retaining much of the beer’s intended flavor. It is certainly nice to have a tasty option when, for whatever reason, more alcohol (or any alcohol) is not desired.

Alcohol Trends, Millennials, Spirits

Millennials Driving Sales of Distilled Spirits to Surpass Beer for First Time

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Last month, The Distilled Spirits Council of the United States issued its annual economic briefing. The briefing contained a wealth of data on the status of the country’s distilled spirits industry. One of the most interesting data points was the fact that, for the first time, the market share enjoyed by distilled spirits (42.1%) exceeded that of beer (41.9%). Ascending to the peak of the alcohol sales mountain has been a long slog for producers of distilled spirits. In 2000, distilled spirits share of the market was 28.7%. Beer’s lead, at 55.7%, must have seemed unsurmountable. So what happened? Why have sales of spirits surpass sales of beer?

The shift from beer to spirits did not occur overnight. It was slow and gradual, which suggests that the 20-plus year time-span over which these changes occurred represents a generational shift in tastes and preferences. So which generation was responsible for these shifts? Credited with being responsible for the craft beer revolution, millennials have also had a starring role in the growing popularity of spirits.

The first two decades of the twenty-first century can be characterized as the age of the millennial. A millennial is someone born between the years 1981 and 1996.

In 2002, the first members of the millennial generation were reaching the age of 21, that magic milestone where they could legally purchase alcohol. Recently, those first millennials entered their 40s, while the youngest members of the cohort reached their mid-20s. Today, there are an estimated 79 million millennials.

Thankfully, there has been a plethora of market research that provides insights into the values and tastes of millennials. When it comes to food and drink, millennials appreciate convenience, variety, freshness, and healthy. They also value quality over quantity. So how do these preferences influence their alcohol purchasing decisions?

As with craft beer, spirits offer consumers variety; When combined either with other spirits and/or with other ingredients such as bitters and fruit juices, the consumer has a dizzying array of choices. Take Ready-to-Drink cocktails (RTDs) for example. In 2021, Drizly, North America’s largest online alcohol retailer, offered its customers over 450 brands of RTDs, a 170% increase over 2019.

While the more creative among us may take satisfaction from mixing our own cocktails at home, the impressive growth of Ready-to-Drink cocktails (RTDs) offers the ultimate in convenience. No mixing of ingredients necessary – just pop open the can and they are ready to drink. Millennials appear to have embraced them. In 2022, sales of RTDs grew 35.8%. Between 2017 and 2022, spirits enjoyed their fastest growth in decades. RTDs were a primary driver of this growth.

However, it is more than convenience and variety that is attracting millennial drinkers. Once saddled with a reputation for being overly sweet and made with cheap ingredients, the makers of RTDs have upped their game in recent years, using high quality spirits and other ingredients that are often organic and gluten-free. In other words, they have underwent a process known as premiumization. Moreover, millennials, more than any other demographic cohort, are purchasing these higher quality RTDs. According to Drizly, 62% of RTD purchasers are millennials.

While beer is traditionally a male drink, RTDs have a broader appeal. Sixty percent of Drizly’s RTD customers are female. Appealing to both males and females undoubtedly gives RTDs an advantage over beer.

In addition to RTDs, millennials are also driving sales of tequila/mescal and American whiskey, the second and third fastest growth segments in 2022 respectively. Premiumization is also apparent in both segments, as consumers trade-up to higher price products, some of which are made by the 2,000+ craft distillers in the United States.

How can millennials afford to trade up to higher-price spirits? Quite simply, they are making a classic quality vs. quantity trade-off. They are consuming less alcohol, but that they are consuming is of higher quality. The same trade-offs are made by millennials choosing pricier craft over cheaper mass produced beer.

While spirits have slowly eaten away at beer’s market share, it should be noted that the craft beer segment is still performing well. In 2021, while overall beer sales grew by just 1%, sales of craft beer increased by 7.9%. For many millennials, it is not a question of spirits or beer. Many consume both; those consuming RTDs and premium spirits are also drinking craft beer.