Alcohol-free cocktails. Booze-free spirits. Bars and distillers are cashing in on Americans’ efforts to drink less.
By ALEXIA ELEJALDE-RUIZ
OCT 03, 2019
Sarah Jankowski has nothing against booze. But after a wine-filled Italian dinner with friends on a recent rainy Sunday, she wanted a festive beverage that would allow her to keep the night going without feeling lousy the next day.
Perched at the bar at Young American in Logan Square, Jankowski sipped, from a coupe cocktail glass, a pretty pink drink containing, according to the menu, “golden oat milk, strawberry, lemon, mint (swizzled)” – not for a moment missing the alcohol that wasn’t in the $7 libation.
“Sometimes you just don’t need to get tipsy,” said Jankowski, 24, who lives in Lincoln Park.
As U.S. consumers, and particularly millennials, try to pare back their alcohol consumption, they are reaching for adult beverages without the very ingredient that made them “adult” in the first place.
In response, bar menus are featuring long sections of spirit-free cocktails. Liquor stores are carrying alcohol-free spirits. Brewers are launching IPAs boasting 0.0% ABV.
For drinkers who look forward to the buzz, such products can seem to miss the point. But as more consumers try to lay off the sauce, often for health reasons, startups and the world’s largest booze makers alike see an opportunity to capture a growing market that has historically been underserved.
“This category is not a fad – the desire for a more conscious lifestyle, for more choice, it’s shaping every business,” said Marcus Sakey, part of a trio of Chicago friends who recently launched Ritual, a brand of zero-proof spirits they bill as whiskey and gin alternatives. “We have no doubt whatsoever that it is not only here to stay but will become an accepted part of the experience.”
Nearly half of U.S. consumers over 21, and two-thirds of millennials, say they’re making efforts this year to reduce their alcohol consumption, according to a Nielsen survey. The primary motivator across the board is health, though millennials are more likely than other age groups to cite price, previous bad experience and reputation as reasons for abstaining, the survey found.
It isn’t clear how those intentions translate to purchasing behavior, but volume sales of alcohol dipped slightly in the U.S. over the year that ended in February, according to Nielsen. Dollar sales were up, suggesting people are drinking less but opting for higher-end beverages – raising expectations for taste and quality that the makers of nonalcoholic drinks are also striving to meet.
Sharelle Klaus, founder of Dry, was on the early end of the movement when she launched her botanical bubbly sodas 14 years ago, when she was nursing her fourth child and missed having something special to pair with food.
“When you aren’t drinking you feel so left out,” said Klaus, who is based in Seattle. “It’s really all around the ritual of pouring yourself something.” Her company last year added a 750-milliliter “celebration” bottle that can be popped for special occasions or given as a host gift.
Low- and no-alcohol products account for only 0.5% of the total U.S. beverage alcohol market, according to IWSR Drinks Market Analysis, but they are growing rapidly as interest extends well beyond pregnant women. Ready-to-drink products in the category are forecast to grow 39% per year through 2022, IWSR said.
Distill Ventures, a drinks accelerator funded by alcohol giant Diageo, in a white paper published this year cited wellness trends, thirst for new experiences and a desire for greater choice as the principle reasons behind the rise of booze-free nights on the town.
Social media may also be driving some of the reluctance to overimbibe, as young people who document their lives on Instagram “don’t want to show up on their feeds hammered,” said Heidi Dillon Otto, who leads the U.S. nonalcoholic practice at Distill Ventures. Meanwhile, the rise of CBD and legalization of recreational marijuana in some states may be offering buzz-seekers alternatives to getting drunk.
Big Booze is taking the trend seriously.
A quarter of the 15 brands in Distill Ventures’ portfolio are nonalcoholic, including U.K.-based Seedlip, a distilled spirit made with herbs and spices that can be paired with tonic or take the place of liquor in cocktails. Diageo in August took a majority stake in 4-year-old Seedlip, calling it a “gamechanger.” It already is served in more than 7,500 restaurants worldwide, including Chicago cocktail meccas The Aviary, Kumiko and Lost Lake.
Pernod Ricard, the French company famous for its anis-flavored pastis aperitifs, this summer launched an alcohol-free dark spirit called Celtic Soul in the U.K., describing it as having flavors of sweet vanilla, spices and oak cask wood.
Heineken brought 0.0, its first nonalcoholic malt beverage, to the U.S. this year, two years after launching it in Europe.
Coors on Nov. 1 plans to debut Coors Edge, replacing its current nonalcoholic offering, Coors NA, with a more flavorful, less caloric version targeted at health-conscious 25- to 35-year-olds.
“We really wanted to double down in this area,” said Chris Steele, marketing director at Coors, which is majority owned by Chicago-based MillerCoors. The company expects Coors Edge, which is double-brewed and has 41 calories and 8 carbs per serving, to hit $10 million in sales next year, he said.
While nonalcoholic beers have been around for decades, largely as afterthoughts, they are starting to take center stage as their sales growth far outpaces beer overall. Some craft beer startups make only booze-free brews, such as Hairless Dog Brewing, which sells alcohol-free IPAs and black ales under the taglines “Party Like There’s A Tomorrow” and “0.0% Regrets.” Wellbeing Brewing’s offerings include an Intrepid Traveler Coffee Cream Stout and a Victory Wheat that contains electrolytes and polyphenols.
Going booze-free is part of a broader trend toward “healthier” drinking. Even cocktails with alcohol increasingly are boasting ingredients such as kombucha for digestive health, collagen for skin benefits and turmeric for its detoxifying properties, making people feel less guilty when they do imbibe, according to a report this year from Chicago market research firm Datassential. This year saw the U.S. launch of alcohol-free “wine water,” which infuses water with discarded wine grape skins and claims to have antioxidants.
Nondrinkers tired of feeling like party-poopers when they order soda water or iced tea in social situations are one ripe audience for the infusion of sophisticated booze-free options. But many of the launches are targeting drinkers opting to moderate their alcohol consumption, not eliminate it entirely, so they can stay clear-headed as the night wears on or not be useless at work the next day.
“We are looking at those people who are complementing their regular beer consumption,” Coors’ Steele said. “There are plenty of times we can replace another drinking choice like soda or tea.”
The Chicago friends behind Ritual say they “love alcohol” but wanted to add a nonalcoholic option to their liquor cabinet for those moments when having another isn’t the best idea.
“Our company is by drinkers, for drinkers, who want choice,” said Sakey, 45, who founded the company with his wife GG Sakey, 44, and their friend David Crooch, 41. “We are very much aimed at people like us – who cook, wrestle with kids, have things to do tomorrow, throw dinner parties and want to remember it the next morning.”
Concocting a satisfying nonalcoholic spirit for drinkers accustomed to the real thing was no easy feat, Crooch said. Working with distillers in Kentucky, the team tried 500 iterations over a year and a half before landing on final recipes they felt could serve as stand-ins for gin or whiskey in cocktails.
The hardest part was replicating the burn of alcohol, which they believe they achieved with a mix of botanicals. The flavors listed on its zero-calorie “gin alternative” include juniper berries, English cucumber, angelica root and coriander berries, while its 10-calorie “whiskey alternative” lists American oak, Madagascar vanilla, sugar floss and mesquite smoke. The products, which list water and sugar as the first two ingredients, are not distilled.
“We are what veggie burgers are to beef, what almond milk is to dairy,” Sakey said.
Ritual, available in several Binny’s stores and some Chicago bars and restaurants, recently received “a major strategic investment” that will fund its national expansion, he said, but declined to disclose the funding source.
The booze-free booze market seems to be further along in Europe than the U.S. The number of nonalcoholic spirits in the U.K. market surged from four to 42 from April to October 2018, according to Distill Ventures’ white paper. Many were featured at the Mindful Drinking Festival in London in July, which is hosted by the pro-sober group Club Soda.
In the U.S., meanwhile, more than 70 percent of people say they have never considered drinking low- or no-alcoholic drinks, according to surveys commissioned by Distill Ventures.
Interest seems to be stronger on the West Coast. More than 80% of Los Angeles bar managers said they think nonalcoholic cocktails are part of a wider trend, compared with 71% who said so in New York. Forty percent of L.A. restaurants have nonalcoholic drink menus compared to a third in New York. Chicago wasn’t included in the surveys.
Rest assured, Chicago is not on its way to becoming a teetotaling town.
“People are still drinking,” said Melissa Romanos, bar manager at The Publican in Fulton Market. “They’re drinking a lot.”
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But Publican added several nonalcoholic cocktails to its menu last year to “make sure we were offering the best we had for guests who choose not to drink,” she said.
The spirit-free cocktails are the best-selling beverages at lunch, driving revenue because lunch diners might otherwise have settled for water, Romanos said. Made with teas, herbs, roots, fresh-pressed juices, house-made syrups and nonalcoholic bitters, among other ingredients, they present creative challenges for bartenders.
“We’re not making mocktails,” Romanos said. “We are making nonalcoholic beverages that are flavorful, well thought out, and that offer our guests the opportunity to enjoy something that’s not too syrupy or citrusy.”
The three spirit-free cocktails offered at Young American, making up a quarter of the drinks menu, are the most challenging to make, said co-owner Wade McElroy. But including nonalcoholic and other easy-drinking options was a priority for the bar when it opened in February.
“People are wary of hangovers,” he said. “They want to have fun and go out but they don’t want to ruin their next day by having too much to drink and suffering from a gnarly hangover.”
Customers find them intriguing, he said, and even people at the bar for the purpose of boozing try them, sometimes with a shot of sherry or mezcal on the side.
One big draw is the option to add a dose of CBD, and 50% of people who order spirit-free cocktails do so, McElroy said. CBD, a cannabis compound that is not psychoactive but produces a warm, relaxing feeling, is not available for alcoholic drinks because it would be overwhelmed by the effects of booze, he said.
To Young American bartender John Brown, the popularity of low- and no-alcoholic beverages has less to do with concern for wellness and more to do with trendiness, particularly among an upper-middle class set of twentysomethings in hipster enclaves like Logan Square. He doubts it would go over so well where he lives in the Hyde Park/Woodlawn neighborhood.
“If I told my friends, here’s a $7 drink without alcohol, they’d be like, ‘What are you selling me?'” Brown said.