Low‑alcohol and functional drinks surge globally – but for very different reasons, says new IWSR data

The global drinks market is undergoing a structural shift as low‑ and no‑alcohol beverages and functional “alcohol‑adjacent” drinks both accelerate in popularity – driven by sharply different consumer motivations.

New data from IWSR shows that while the two categories are expanding in parallel, they are not competing for the same occasions or the same drinkers.

Health and moderation fuel the rise of no‑alcohol drinks

Across ten key markets surveyed, the strongest driver behind no‑alcohol choices is health. Consumers increasingly view alcohol moderation as part of a broader wellness lifestyle, with many turning to no‑alcohol beer, wine and spirits as direct substitutes for traditional alcoholic drinks.

• 37% of no‑alcohol beer drinkers and
• 40% of no‑alcohol wine and spirits drinkers

cite “a healthy lifestyle choice” as their primary motivation.

This aligns with wider consumption trends: IWSR reports that no‑alcohol products grew 9% in volume in 2025, with global volumes forecast to rise 36% between 2024 and 2029, reaching 18 billion servings – around two servings per person worldwide.

Curiosity and functionality drive alcohol‑adjacent drinks

Functional beverages – ranging from nootropic and adaptogenic drinks to botanical blends, sparkling teas, fermented drinks and non‑intoxicating hemp beverages – are booming for entirely different reasons.

Rather than replacing alcohol, these drinks appeal to consumers seeking new experiences, mood support, or functional benefits such as focus, relaxation or gut health.

IWSR notes that functional drinks grew 11% in volume in 2025, albeit from a smaller base than no‑alcohol beverages.

Only 26% of consumers choose functional drinks for health reasons – far lower than for no‑alcohol analogues – highlighting that the category is driven more by curiosity, experimentation and perceived benefits than by moderation.

Two booming categories, two distinct roles

IWSR emphasises that the categories should be treated as separate growth opportunities, not competitors.

• No‑alcohol drinks: positioned as alternatives to traditional alcohol, fitting into existing drinking occasions such as socialising, dining and celebrations.
• Functional drinks: positioned as new beverage occasions, often consumed outside traditional alcohol moments – during work, wellness routines, or as part of daily hydration.

What this means for producers

The divergence in motivations presents clear strategic implications:

• Brands in the no‑alcohol space must continue to focus on taste, authenticity and health messaging.
• Producers of functional beverages should emphasise benefits, ingredients, and experiential positioning, tapping into wellness culture without framing themselves as alcohol replacements.

With both categories forecast for strong growth, the opportunity for innovation is significant – provided producers understand the distinct consumer needs driving each trend.

Photo by Diego Arenas de Rodrigo on Unsplash