• This year, Dry January coincided with the US Surgeon General's call for cancer warnings on alcohol.
• The CEOs of Heineken USA and Athletic Brewing told BI that drinking trends are moving toward moderation.
• While the space is becoming more popular, widespread availability can pose friction in adoption.

Dry January participants were given extra incentive to stay sober this month as the US Surgeon General said alcohol is a leading cause of preventable cancer and called for a warning label on alcoholic products.

US Surgeon General Vivek Murthy's advisory, announced on January 3, comes as a number of non-alcoholic drinking brands and sobriety-related trends, like sober curiosity or intermittent sobriety, have gained traction in the US.

However, CEOs of companies selling non-alcoholic beverages say the evolving attitudes toward drinking don't mean alcohol is on its way out.

"It's not that there is, like, a big prohibitionist movement or a sober movement, necessarily," Bill Shufelt, the CEO of non-alcoholic beer brand Athletic Brewing said in an interview with Business Insider.

Today, there are more options on store shelves to moderate alcohol intake while providing a similar taste experience. "Even two years ago," Shufelt said that there was "very little availability and awareness." Now the category is on the cusp of a "big societal breakthrough," the CEO said.

The increasing availability of non-alcoholic beer and spirits comes as studies suggest drinking rates have decreased among young Americans. Gallup data published in August also indicates a shift in perception of alcohol. The report said 45% of Americans view alcohol as bad for health, which is a 6% increase from the year before and 17% increase since 2018.

Dozens of celebrities have spoken out about their sobriety in recent years, with some even establishing their own non-alcoholic drink brands, including Katy Perry's De Soi, Blake Lively's Betty Buzz, and Tom Holland's Bero.

Shufelt said the availability of quality alternatives has given consumers the ability to drink non-alcoholic beer without changing their lifestyles.

Leaning into moderation

Both Athletic Brewing's CEO and Heineken USA's chief executive, Maggie Timoney, told BI that as more options are sold in bars and stores, buying behavior is leaning toward moderation over strict sobriety.

Shufelt said 80% of Athletic Brewing customers still drink alcohol, suggesting that most of its customer base isn't traditionally sober.

Heineken's Timoney pointed to NielsenIQ data from 2023 that indicated over 93% of non-alcoholic consumers also purchased alcohol, a 13% jump from the year prior.

The shifting mindset toward drinking can be seen in trends like Dry January, which has evolved for some into the more flexible approach of "Damp January," in which participants cut down on their alcohol intake for the month without fully eliminating it. Some have credited the less drastic approach for helping them moderate their alcohol consumption after the monthlong challenge ends.

Timoney said evolving attitudes toward non-alcoholic beverages stems in part from a desire to participate in occasions where others are drinking.

"It's linked to the health and wellness macro trend," the Heineken executive said, as well as occasions, "because people still want to have a sense of belonging."

Both companies have been making non-alcoholic beer for more than half a decade. Athletic Brewing was launched in 2018. In 2019, Heineken, which has experimented with non-alcoholic beer in the past, launched the non-alcoholic Heineken 0.0 in the US.

Over the last few years, other non-alcoholic drink companies like Free Spirits and Spiritless joined the space. Now, there are a number of non-alcoholic brands making the option to enjoy a mocktail or beer-like drink more widespread.

Athletic Brewing's Shufelt said that the proliferation of non-alcoholic options has expanded "menus and occasions" and has created excitement in the adult beverage industry.

Milan Martin, the CEO of Free Spirits, told BI the rise of participants in Dry January and the decline in some alcoholic drink sales isn't a sign that the alcohol industry "is in trouble" or that it's "going away."

"It's just that people are now just drinking more mindfully and more with an eye to moderation because they have the data," Martin said.

'Bars and restaurants are leaving a lot of money on the table'

While the sale of non-alcoholic beer and spirits has grown in recent years, the segment is still a fraction of overall alcohol sales.

Shufelt said the relative availability of non-alcoholic options is "probably the biggest friction" in people regularly buying the products. He said that Athletic Brewing products are on less than 10% of restaurant menus in the US and as he sees it, "bars and restaurants are leaving a lot of money on the table."

Martin said that for those looking to drink moderately, it can be challenging "if they have to go out of their way to try your product or keep drinking your product."

In an effort to reach more consumers, Heineken plans to expand its 0.0 brand across two major US convenience retailer chains and launch a 12-pack of the non-alcoholic beer bottles for the first time this year.

Timoney told BI that while stigmas around non-alcoholic beer are "easing, they still remain a hurdle."

A Heineken study released on January 2, conducted in collaboration with a professor at the University of Oxford, surveyed 2,413 Americans. The study found that 16% of those in the US said they felt the need to justify their choice of low- or no-alcohol drinks at social gatherings, and 13% said they concealed those choices due to social pressures over the past year.

"Often, the hesitation comes from outdated perceptions— people assume it won't taste like beer," the CEO said. "But the reality is, once they try it, they're amazed."

• Major alcohol companies have been bracing for a culture shift favoring nonalcoholic options.
• Younger consumers under the age of 30 buy less alcohol and drink less often.
• Brands like Heineken and AB InBev have rolled out their own alcohol-free offerings, bolstering sales.

Even before the Surgeon General on Friday warned that alcohol can cause cancer and should come with a warning label, big companies like Heineken and AB InBev — the parent of brands like Budweiser and Michelob Ultra — were preparing for a culture shift favoring nonalcoholic options.

Nationwide, spending on most kinds of alcohol has declined in recent years — especially among young adults, Business Insider previously reported.

Younger consumers under the age of 30 have become progressively less likely over the last two decades to drink alcohol at all, with 62% of adults under age 35 saying they drink, down from 72% two decades ago, according to data from Gallup published in 2023.

Big brands have launched non-alcoholic options to cater to a market that, while they don't want a boozy drink, may still want something new to indulge in on a special occasion.

Heineken first released its non-alcoholic beer, Heineken 0.0, in March 2017 in the Netherlands and Germany, expanding its release to the United States in January 2019.

Corona Sunbrew 0.0% debuted in 2022, a product from Constellation Brands — a beverage company that produces beer, wine, and spirits from brands like Modelo and Corona Extra. AB InBev, which produces drinks for 500 global brands including Budweiser and Michelob Ultra, launched Corona Cero the same year. Constellation Brands owns the US brand licenses for Corona beer in the US, while AB InBev owns the beer in the rest of the global market.

And their zero-proof bets are paying off, executives have said in recent earning calls.

Harold van den Broek, Heineken's Chief Financial Officer, said during an October 2024 earnings call that the company is seeing an acceleration in non-alcoholic sales across many markets, including the US, adding that the brand's non-alcoholic options have grown to over 4% of their total portfolio since launching.

"We do believe that this category, which has been growing about 6% on average since 2018, will continue this growth trajectory," van den Broek said. "We have high hopes for the non-alcohol portfolio."

Constellation Brands' president and CEO, William Newlands, shared a similar optimism. During an April 24, 2024 earnings call, he said Corona Non-Alcoholic was "the number one share gainer in the non-alcoholic segment."

"I think that does reflect some change in consumer behavior or people that are concerned about being the designated driver but still want to enjoy an outstanding-tasting beer," Newlands said. "We're going to continue to emphasize the betterment trends as we go forward with a number of our product offerings and certainly expect Corona Non-Alcoholic to continue to grow here in this coming fiscal year as well."

Michel Doukeris, AB InBev's CEO, likewise told investors during an October 21, 2024, earnings call that the company views the non-alcohol beer segment as "a key opportunity to develop new beer consumption occasions" and that development in this market will continue to be a focus of the company's strategy going forward.

"We gained market share of non-alcohol beer in over 60% of our key markets in the third quarter, with Corona Cero more than doubling both volumes and revenues," Doukeris said. "While no-alcohol beer is currently a small portion of our global volume, we believe there is a significant opportunity for incremental growth."

Industry representatives have long warned of a "war on alcohol," a warning which increased in fervor after the late 2023 World Health Organization (WHO) report which indicated even low levels of alcohol increase the risk of cancer and that "no safe amount of alcohol consumption for cancers and health can be established."

However, amid the concern that alcohol sales might dwindle, brands have begun to capitalize on shifting consumer behaviors and buoy their overall revenue. Boston Consulting Group values the global market share of no-or-low-alcoholic beers, wines, and spirits at more than $13 billion, with sales expected to grow at an annual growth rate of over 7% between 2023 and 2027, settling at about 4% of the overall alcohol market.

Eliott Edge, the bar manager at Hekate, New York City's only sober bar, told Business Insider there is "a whole ecosystem" of new non-alcoholic offerings that customers are clamoring for, having witnessed increasing demand for the alcohol-free options firsthand.

"I get the sober, the sober-curious, and folks who still drink but want to take a break for one reason or another," Edge said. "Locals, tourists — everyone wants to see what it's like. So the non-alcoholic options don't cater specifically to any particular group."

As a result, more and more bars and brands are going to offer non-alcoholic options going forward, Edge predicted, "because they're going to realize that it's like vegetarians or vegans or gluten-free or dairy-free. It's just another type of customer profile to cater to — and the ones that don't cater to that are going to go the way of the dinosaur."