IWSR reports strong growth in no-alcohol and functional drinks as consumer motivations diverge 

UK – A new report from IWSR has shown that no-alcohol alternatives and alcohol-adjacent functional drinks are both experiencing rapid global growth, but for very different reasons.  

According to the market research firm, global volumes of no-alcohol products, including zero-ABV spirits and ready-to-drink beverages, are forecast to rise by 36% between 2024 and 2029. 

IWSR said this expansion will take the category to an estimated 18 billion servings, which it described as the equivalent of “two servings per person on the planet.” Meanwhile, alcohol-adjacent beverages, which include functional and non-intoxicating products, are expected to grow by 11% in volume in 2025, although from a smaller base. 

The company stressed that the two segments are being driven by different consumer motivations and are not in direct competition. IWSR found that no-alcohol alternatives are mainly chosen for health and moderation, while alcohol-adjacent drinks are purchased for curiosity or for effects similar to alcohol. 

Alcohol-adjacent beverages include non-intoxicating hemp drinks, nootropic and adaptogenic functional beverages, and products with “alcohol cues” such as botanicals, sparkling teas and fermented drinks. 

IWSR based its findings on a survey conducted in August 2025 across 10 key markets, including Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the US and the UK. A total of 7,973 legal drinking age respondents took part. The research showed that 40% of consumers who buy no-alcohol spirits do so to make a “healthy lifestyle choice”. 

By contrast, only 26% of alcohol-adjacent buyers said health was their main motivation. Instead, 17% said they wanted to “experience similar effects to alcohol through functional ingredients,” while 20% said they were “curious to try it”. 

Susie Goldspink, IWSR’s head of no- and low-alcohol, said the industry needs to adapt to these shifting trends. “The beverage alcohol sector must prepare for diverging consumer preferences to fully capitalise on the two growing trends,” she said. 

Goldspink added: “No-alcohol analogues like no-alcohol beer and wine are an increasingly popular way for drinkers to moderate their alcohol intake. By mimicking the taste and appearance of alcoholic beverages, drinkers who want to moderate can participate fully in occasions without feeling left out.” 

She continued: “Alcohol-adjacent drinks are also growing in popularity, but consumers are using them in a different context, choosing them more for their functional benefits rather than as a mechanism for moderation. Both categories are poised for continued strong growth, but most likely as distinct products, not competitors.” 

IWSR also noted that its Bevtrac survey in December found that interest in month-long abstinence trends such as Dry January and Sober October has declined among Gen Z legal-age drinkers. 

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