Demand For No-Alcohol And Functional Drinks On The Rise, Says IWSR

The IWSR estimated that no-alcohol beer, wine, spirits and RTDs grew in volume by 9% in 2025.

It has also forecast volume growth of 36% over a five-year period from 2024.

By 2029, no-alcohol drinks are projected to rise to 18 billion servings, equivalent to two servings per person globally.

Functional, or ‘alcohol adjacent’, drinks, including non-intoxicating hemp drinks, nootropic and adaptogenic drinks, botanical and fermented drinks, and sparkling teas, are also witnessing an increase in volume, according to the study.

IWSR noted that this category recorded volume growth of 11% in 2025.

However, functional drinks remain a smaller category compared with no-alcohol beverages.

Consumer Perspective

Consumers choose both categories for different reasons, according to IWSR.

No-alcohol drinks are primarily selected for health reasons, with 37% of respondents opting for no-alcohol beer and 40% choosing no-alcohol wine and spirits.

Only a quarter (26%) of consumers list health reasons for choosing functional beverages, the survey showed.

The ‘alcohol adjacent’ category was selected by 17% of respondents ‘to experience similar effects to alcohol through functional ingredients’, IWSR added.

A further 20% of respondents said that they were ‘curious to try’ functional drinks.

Changing Beverage Market

IWSR highlighted that the beverage market will need to adapt in response to these emerging consumer trends.

Susie Goldspink, head of no and low alcohol at IWSR, said, “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.

“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.”

The consumer data used in the study is based on a custom online survey conducted in August 2025 across Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the United States and the United Kingdom.

The survey included 7,973 respondents of legal drinking age, including 4,181 no- and low-alcohol buyers.