Alcohol Adjacent Drinks Create New Momentum in the No/Low Market

According to IWSR, alcohol adjacent drinks are carving out a distinct growth path within the no/low landscape, especially among younger LDA+ consumers. Rather than positioning themselves as health tools or alcohol-reduction substitutes, these products appeal through functional benefits such as relaxation, focus, mood enhancement, and energy.

While no-alcohol products continue to dominate volume growth, alcohol adjacent drinks are emerging as a compelling complementary category with strong long-term potential.

No/Low Growth Sets the Stage for Alcohol Adjacent Drinks

IWSR’s No/Low-Alcohol Strategic Study 2025 reports that no/low-alcohol volumes across the world’s top 10 markets grew by 4% in 2024, while value increased by 6%. Looking ahead, IWSR forecasts a 9% volume increase for no-alcohol products in 2025, even as low-alcohol declines by 2% versus 2024. By 2029, no-alcohol volumes are projected to grow by 36%.

Against this backdrop, alcohol adjacent drinks—though smaller than traditional no-alcohol beer, wine, RTDs, and spirits—are gaining traction. IWSR projects their volumes to rise by 11% in 2025, signaling accelerating interest.

Younger Consumers Drive Adoption of Alcohol Adjacent Drinks

IWSR consumer research shows that consumption incidence of alcohol adjacent drinks among no-alcohol drinkers reached 19% in 2025 across the top 10 markets, a sharp increase from 2022. The US leads this trend, with incidence at 33%, followed closely by Gen Z consumers at 30%.

These products resonate strongly with Millennials and Gen Z, who together account for more than three-quarters of alcohol adjacent consumers across leading no/low markets.

Functional Benefits, Not Abstinence, Shape Demand

Unlike other no-alcohol products, alcohol adjacent drinks attract consumers for reasons beyond moderation. Many drinkers seek effects similar to alcohol—such as unwinding or a mild “buzz”—without intoxication.

“No-alcohol analogue TBA categories lead the no/low market in volume terms, but strong growth and innovation continue in the alcohol adjacent space,” said Susie Goldspink, Head of No/Low Insights at IWSR. She noted that celebrity-backed brands and innovation are accelerating visibility.

Goldspink also emphasized shifting consumer priorities: “Consumer awareness of mental health, anxiety disorders and stress management is at an all-time high. Functional products that target any of these issues, or improve sleep quality or energy levels, are on the rise.”

What Falls Under Alcohol Adjacent Drinks

Alcohol adjacent drinks span multiple subcategories, including non-intoxicating hemp-based beverages such as CBD drinks; functional beverages containing nootropics or adaptogens; and no-alcohol products that use alcohol cues without functional claims. This latter group includes botanical and bitter drinks, vinegar-based products, sparkling teas, wine alternatives, and fermented beverages.

Together, these formats expand choice beyond traditional alcohol substitutes.

Market Differences Reveal Untapped Potential

Interest in alcohol adjacent drinks varies significantly by region. According to IWSR, 60% of no/low consumers across the top 10 markets are open to these products. That figure rises to 85% in the US and 78% in Canada, but drops to 33% in Japan and 43% in France.

Functional preferences also diverge. Japanese consumers prioritize sleep-supporting benefits, while German consumers favor energy-focused products. Meanwhile, unwind, mood enhancement, and energy lead preferences in markets such as the US, UK, Canada, and Australia.

Availability Remains the Biggest Barrier

Despite strong demand signals, alcohol adjacent drinks still face structural challenges. IWSR consumer research shows that 60% of no-alcohol buyers cite limited availability as the main reason they do not purchase these products more often—a higher figure than for no-alcohol spirits, RTDs, wine, or beer.

“Availability is a more significant barrier for alcohol adjacents as this emerging category develops and fights for shelf space,” Goldspink explained. She also pointed to pricing perceptions and consumer confusion over where to find the products in-store as ongoing obstacles.

According to IWSR, clearer retail placement and consistent category management could accelerate normalization and growth.

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Source of Information

This article is based on a report published by IWSR: Alcohol adjacents offer ‘unique opportunity’ in no/low space

The image of the article is courtesy of © claudio.arnese via Canva.com