The alcohol industry faced a reckoning in 2024, as sales and consumption trends highlighted a shift among younger consumers. Millennials and Gen Z, who form a sizable population of the alcohol consumer base, are moving away from the "work hard, party harder" ethos. They are not necessarily abstaining from alcohol but are reimagining how they socialize and celebrate. While traditional wine and spirits remain part of the conversation, they no longer dominate it.

In this shift, the low and no alcohol category has emerged as a beacon of opportunity. For Millennials and Gen Z, picking a zero-proof beer, wine, or spirit is not just acceptable but increasingly preferred. Though older generations, like Gen X and Boomers, are less enthusiastic about this category, younger consumers are driving its growth.

The question for producers is no longer whether the low and no category is viable—it clearly is—but how to innovate, scale, and maintain quality in a market that is both promising and complex.

Sparkling Potential: A Niche with Room to Grow

Christian Deakin, Product Development Manager at BevZero, points to sparkling wines as a promising avenue in the low and no alcohol space. “Right off the bat, sparkling is a great avenue for the no and low market because there aren’t too many of them compared to still wine options,” he explains.

One of the unique advantages of sparkling wines in this category is their mouthfeel. “The act of sparkling does wonders for the mouthfeel, especially for not fully non-alcoholic products. CO2 bubbles can replicate some of the velvety balance and weight you lose when alcohol is removed,” Deakin adds.

Unlike traditional sparkling wine methods such as Méthode Champenoise or Charmat, dealcoholized sparkling wines allow for innovative approaches like inline carbonation after alcohol removal. This flexibility, coupled with the relative scarcity of options in the sparkling subcategory, makes it a fertile ground for growth.

Premiumization and Quality: A Balancing Act

As the low and no alcohol wine category grows, it is also aligning with the broader trend of premiumization in the industry. However, producing high-quality non-alcoholic wine requires a radical departure from traditional winemaking methods.

Adam Lazarre, Director of Winemaking at Wine Hooligans, describes the learning curve: “This is nothing like you’ve ever dealt with before as a winemaker. We’ve been making wine the same way for 5,000 years—ferment grapes, and you’ve got a finished product with alcohol in it. But with non-alcoholic wine, you’re dealing with an entirely different set of rules, physics, and chemistry.”

The starting point for any great non-alcoholic wine is high-quality fruit. “You have to make a great wine to begin with,” Lazarre emphasizes. “It’s got to have all the flavors and balance. But once you remove the alcohol, you’re back to square one, relearning everything for the non-alcohol world.”

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Challenges in the Marketplace

While demand for low and no alcohol products is growing, Lazarre warns that the category’s rapid expansion may soon lead to saturation. “The floodgates are going to open in the next year or two. Companies that aren’t investing in quality—both in the fruit and the production process—will fall by the wayside,” he predicts.

The costs of entering this space are prohibitive for smaller producers. Advanced equipment, innovative techniques, and strict sanitation protocols are essential but expensive. Lazarre likens the current moment to the golden age of computers in the 1990s: “It’s an explosion of innovation, but eventually, only a few strong players with great products will dominate.”

The Shelf-Life Factor

One of the unique challenges of non-alcoholic wine is its shorter shelf life compared to traditional wines. Without alcohol acting as a preservative, spoilage risks increase significantly. Deakin explains, “You have to be way more careful with all your wine movements and touches. For example, for alcoholic wine if you want to sweeten the wine you add grape concentrate. Whereas for non alcoholic wine, any residual yeast or bacteria will ferment that sugar because there’s no alcohol to inhibit it.”

This need for heightened care extends to bottling, storage, and even distribution. “With alcoholic wine, you can store it in a chilled tank for months. Non-alcoholic wine, on the other hand, shouldn’t be held in a tank for more than a couple of weeks,” Deakin notes. The implications are clear: non-alcoholic wines must reach consumers quickly to ensure quality.

The Cost of Entry

Producing non-alcoholic wine is far more expensive than its alcoholic counterpart. The removal of alcohol requires specialized equipment and advanced techniques, which many small producers simply cannot afford.

Sanitation is another cost driver. “With alcohol, you don’t have to worry as much because it kills a lot of stuff. But in non-alcoholic wine, spoilage is a constant threat,” Lazarre explains. For producers considering entering this space, the message is clear: be prepared to invest heavily in research, equipment, and quality control.

The Road Ahead: Opportunities and Uncertainties

Despite the challenges, the low and no alcohol wine category offers immense potential. Lazarre highlights the importance of understanding the market: “If you’re not willing to put the money and time into research and marketing, stick with alcoholic wines. But if you’re serious about diversifying, there’s plenty of opportunity.”

The category’s future may depend on how producers define and deliver quality. “No one has really identified what quality means in non-alcoholic wine yet. Is it supposed to taste like wine, or is it supposed to be fun and flavorful? The possibilities are endless, but the focus must be on making a great product,” Lazarre adds.

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A Turning Point for the Industry

As the industry looks ahead to 2025, the low and no alcohol wine category stands at a crossroads. It is no longer a niche segment but a dynamic market with high stakes. For producers willing to innovate and invest, the rewards could be substantial.

In this evolving landscape, one thing is certain: younger consumers are reshaping the industry. As they prioritize health, wellness, and balance, the low and no alcohol category is poised to become a cornerstone of the future wine market. For winemakers, the challenge lies in embracing this shift without compromising on quality, authenticity, or creativity. 

For more insights into the no and low alcohol wine category, watch the interview with Christian Deakin and Adam Lazarre here.

Header image sourced from Adobe Express.

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