As no-alcohol products continue to lead growth within the expanding no/low category, a new segment is quietly gaining momentum: alcohol-adjacent beverages.
Positioned between traditional alcohol alternatives and functional drinks, these products are emerging as a compelling opportunity—particularly among younger LDA+ consumers such as Millennials and Gen Z.
According to IWSR’s No/Low-alcohol Strategic Study 2025, no/low alcohol volumes across the world’s top 10 markets grew by 4% in 2024, while value increased by 6%. The outlook for no-alcohol products is even stronger, with IWSR forecasting a 9% volume increase in 2025 and an impressive 36% expansion by 2029. In contrast, low-alcohol products are expected to decline slightly, reinforcing the dominance of fully alcohol-free options.
Within this broader trend, alcohol-adjacent beverages—though still small in absolute volume compared to no-alcohol beer, wine, RTDs, and spirits—are showing notable acceleration. IWSR projections indicate volume growth of 11% in 2025, highlighting their growing relevance in the no/low landscape.
Rising Awareness and Younger Consumers Driving Demand
Consumer research from IWSR shows that consumption incidence of alcohol-adjacent products among no-alcohol drinkers reached 19% in 2025 across the top 10 markets, a sharp increase compared to 2022. The figures are even more striking in the United States, where incidence stands at 33%, and among Gen Z consumers, at 30%.
This growth is closely linked to rising awareness of mental health, stress management, and overall wellbeing. As Susie Goldspink, Head of No/Low Insights at IWSR, explains, today’s consumers are increasingly drawn to functional benefits such as relaxation, mood enhancement, focus, improved sleep, and energy. Many alcohol-adjacent brands respond to this demand by offering product ranges designed around specific effects—“unwind,” “calm,” “uplift,” or “focus”—rather than traditional flavour-led propositions alone.
Alcohol-adjacent beverages encompass a broad spectrum of products, including non-intoxicating hemp drinks (such as CBD beverages), nootropic and adaptogenic drinks targeted at adults, and non-functional alcohol-free products that mimic alcohol cues. These include botanical or bitter drinks, vinegar-based beverages, wine alternatives, sparkling teas, and fermented products.
A Different Purchase Motivation
What truly distinguishes alcohol adjacents from other no-alcohol categories is the motivation behind consumption. Rather than being primarily about reducing alcohol intake, these products are often consumed to replicate certain effects associated with alcohol—such as unwinding after work, achieving a mild “buzz,” or enhancing mood—without intoxication.
This is particularly evident among Gen Z consumers. While 60% of Gen Zs report moderating their alcohol intake, they do not necessarily view alcohol adjacents as a substitute for alcohol reduction. Instead, they consume them for their functional effects, making these products potentially incremental rather than substitutive to both alcohol and no-alcohol analogue occasions.
Market Differences and Functional Preferences
Interest in alcohol-adjacent beverages varies significantly by market. The US and Canada are currently the most developed, with 85% and 78% of no/low consumers respectively open to alcohol adjacents. In contrast, openness is considerably lower in markets such as Japan (33%) and France (43%).
Functional preferences also differ by region. Japanese consumers show a strong preference for sleep-supporting products, while German consumers favour energy-boosting options. In markets such as the UK, US, Canada, and Australia, unwind, energy, and mood enhancement are the leading functional drivers.
Barriers to Further Growth
Despite their strong potential, alcohol-adjacent beverages face clear barriers. Availability remains the most significant challenge: 60% of no-alcohol buyers cite limited availability as a reason for not consuming alcohol adjacents more frequently. Price perception is another hurdle, with many consumers viewing these products as expensive.
Additionally, unclear retail placement creates confusion. Alcohol adjacents can be found across multiple sections—soft drinks, no/low, energy drinks, refrigerated shelves, or on-the-go areas—making them difficult to locate. A clearer, more consistent category management approach by retailers could play a crucial role in normalising and scaling this emerging segment.
A Category with Distinct Potential
While still evolving, alcohol-adjacent beverages represent a unique and promising opportunity within the no/low ecosystem. Driven by younger consumers, functional benefits, and new consumption motivations, they are not merely an alternative to alcohol, but a category with its own identity—and its own growth trajectory.
Source: IWSR
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