Mid-Year Report: No-, Low-, and Functional Beverage Trends Halfway Through 2023

With 2023 halfway behind us and end-of-year and Dry January just six months away, now is the time to evaluate where your business is tapping into key consumer trends – and where there are future opportunities. Drinks delivery company Drizly recently released its 2023 Consumer Trend Report, which offers key insights into what consumers are drinking, what’s trending and what’s next. 

 

Here are a few key takeaways from the report, including HCB insights for how this data impacts the functional and nonalcoholic beverage spaces: 

 

• RTDs are on this rise: From 2019-2021, RTDs experienced a 400% growth in share (sitting at 2% share overall on Drizly in 2021), and rose to 2.7% share in 2022. Drizly reports that consumers are beginning to look at RTDs as a year-round beverage option rather than just a seasonal choice. A contributing factor to this trend may be that consumers are excited by the diversification of the canned-cocktail category, which offers more choices than the simple seltzer category. 

• HCB Insights: From non-alc mojitos to canned cannacocktails, the variety of options and occasions to be met by the RTD category will continue to spark consumer interest. Diversification of product selection is key to engaging and encouraging consumer growth, so building new brands through beverage experiences is essential. 

• Consumers are staying – and drinking – in: With influencing factors such as inflation and rising costs, more consumers than ever are staying in for the at-home drinking experience. Not only does Drizly report that consumers are playing their own mixologist, but consumers who are staying in are consuming more expensive products than when they go out. 

• HCB Insights: Consumer willingness to pay for more expensive products at home, combined with at-home bartending, indicates a growing interest in the overall craft of beverages. These trends indicate that consumers may be interested in learning more about what they’re drinking, and when in the comfort of their own homes, want the best drinking experience they can have. 

• They’re hosting at home, too: Consumers aren’t staying at home drinking all by themselves; they’re increasingly hosting at home too, according to Drizly. The report found that when hosting at home, most people spent about $100 on beverages for parties five and under; $150 for casual get-togethers with five to ten people; and more than $300 for parties of ten or more. 

• HCB Insights: Consumers aren’t afraid to pay a premium for their favorite beverages at their favorite events. Beverages remain a cornerstone of hosting at home, and as consumers explore new categories of beverage, so will their guests, who are already likely to be influenced by the recommendations of friends or family.

• Nonalcoholic sales are soaring: The white-hot nonalcoholic category is listed as a section under Drizly’s “trending” tab on their website, and for good reason: The company found that NA categories on Drizly grew 29% in 2022 compared to 2021, and 23% of Gen Z and 24% of millennial respondents reported drinking non-alcoholic beer, wine or spirits “often.” 

• HCB Insights: This data supports ongoing national trends around alcohol-reduction, specifically that younger generations are drinking less alcohol, but are still looking to enjoy a beverage in their social lives and at-home drinking habits. Beverages remain a key driver of socialization, even for those who aren’t drinking alcohol. 

• Decoding the NA Drinker: Drizly found that more men (14%) than women (9%) said they were drinking NA beverages often, and more men than women (12% vs. 8%) reported being “sober curious.”

• HCB Insights: While many new-to-market products seem to cater to the female consumer, men are looking to get in to the NA game too. Don’t sleep on this audience and its purchasing power. 

• Subcategories of Interest: As consumer interest has grown, so have brand and product choices. Drizly reports that in 2022, consumers were most likely to drink NA beer (30%), followed by RTDs (20%), wines (17%), and spirits (10%). 

• HCB Insights: Perhaps in alignment with trends about men looking to drink less – but still drink a classic “male” category, nonalcoholic beers own a large chunk of the no- and low- category. RTDs continue to be hot, with or without alcohol, again, due to a wide variety of options for flavor and occasion. 

• Nonalcoholic RTDs are on the rise too: Following trends in the overall RTD category, nonalcoholic RTDs are particularly piquing consumer interest. Drizly found that consumers were most curious about trying NA RTDs (17%), followed by nonalcoholic wines (14%). Drizly also notes some key demographic differences in consumer interest, citing Millennials (22%) and Gen Z (21%) were most interested in trying nonalcoholic wines, Gen X (15%) and Boomers (17%) were most interested in the RTD category. 

• HCB Insights: This may indicate that older consumers are less likely to give up the traditional versions of beverages such as wine, and are more likely to explore RTDs that open a world of possibilities with their versatility and occasion-flexibility. 

• Real-life influence matters: Consumers reported to Drizly that they were most likely to try a product based on the recommendation of friends or family (52%) or bartenders (25%) – rather than influencers, social media ads, or celebrity endorsements. Think that the anti-influence trend is just for Boomers? Think again: only 17% of Gen Z and 13% of Millennials cited influencers as a reason to try a new beverage brand. 

• HCB Insights: Bartenders remain key gatekeepers for consumer opinion, so building strong trade marketing programs for both on- and off-premise are essential marketing strategies for brands looking to win new consumers. 

• Pricing and consumer opinion matter: In addition to considering the source of the recommendation, consumers consider pricing and customer reviews as key factors in purchasing decisions. 

• HCB Insights: Building positive consumer feedback is essential, especially in new and burgeoning categories such as nonalcoholic and functional/infused beverages. If consumers are interested in trying new things but faced with many unknown options, they’ll select the best quality at the best price. 

• They’re drinking with their eyes first: More than half of Gen Z cited cool packaging as the primary driver of their purchase, and 34% pointed to sustainable packaging as a key factor. While those factors may influence a choice, there are some turn-offs too: Thirty-one percent of Gen Z cited a lack of transparency in ingredients as something that would stop them from purchasing a product. 

• HCB Insights: Branding and marketing are essential in winning new consumers, and are a worthwhile investment for new entrants to the market. Younger consumers care about the earth and care about the quality and ingredients in what they’re drinking – and choose brands that do too. 

• Brand ethos matters: Millennials are putting their values first, with 40% reporting that they prefer local, family-owned, and small businesses, and 22% saying they would not buy a product from a brand unaligned with their values. 

• HCB Insights: Authenticity matters to consumers who want a product that tastes great, but also tells a story. Telling that story is an important tenet of any brand’s path to shelf and success. 

With ongoing opportunities for consumers and brands alike, Harmony Craft Beverages offers a suite of services to support no-, low-, functional, and infused beverages as they navigate this complicated landscape. Please contact us for more information on how we can support your beverage brand.