Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Last summer, I was hanging out with friends who own property on Sweetwater Lake, drinking a nonalcoholic Athletic Run Wild IPA.
“Hey, it’s a Sunday beer!” a friend exclaimed. He calls them “Sunday beers” because he drinks them before driving back home at the end of the weekend. We were both pretty shocked at how good nonalcoholic beers can now taste.
According to Nielsen data, nonalcoholic beer retail sales grew 415% (not a typo) last year, to around $700 million, and continue to surge. Leading the charge is Athletic Brewing, surpassing $130 million in sales in 2024. There are fully nonalcoholic brands (e.g., Athletic), brands offering nonalcoholic “as close as can be” versions of core products (e.g., Bud Zero), and brands offering special varieties only in nonalcoholic flavors (e.g., Sam Adams Just the Haze).
If you’re looking for a great local NA variety, Sun King Brewery has you covered, with multiple delicious varieties. This is a global trend: The NA beer market is projected to reach $40 billion (yes, that’s a “b”) by 2033, with a compounded annual growth rate of 7.2%.
I’m a fan, so I thought I’d dig into this fast-growing industry and look for insights that might be valuable for entrepreneurs.
1. Positive disconfirmation is a powerful thing.
The previous generation’s exemplar for nonalcoholic beers is O’Doul’s. O’Doul’s, introduced by Anheuser-Busch in 1990, faced its share of criticism and mockery over the years and was often perceived as lacking in flavor and quality. For instance, a classic product review from The Takeout described O’Doul’s as smelling of “sweet corn, perfume and basements.”
This was the expectation for nonalcoholic beer—that it couldn’t taste very good. But when we can find a category, a retail situation—heck, any part of the human experience where there’s a lot of dissatisfaction—it’s an opportunity.
Low expectations are, counterintuitively, a great thing for entrepreneurs! Positive disconfirmation is a concept I believe entrepreneurs can often use as a North Star—what do people expect, and how can I (maybe even drastically) overdeliver on those expectations?
That’s what nonalcoholic beer has done. Consider a quick case study: Guinness 0.0.
Beer culture has long been part of Ireland’s national identity, and there is no more iconic Irish beer than Guinness. Guinness 0.0 is, frankly, amazing. To me, it’s got the same velvety, slightly bitter taste and the same ritual “pour” that is virtually identical to the original. Not only has it been widely adopted, but it’s being served on tap in pubs across Ireland. The Guinness Pub Finder helps Irish drinkers find it near them.
2. Keep your eye on trends.
As a brand manager for Fortune 500 firms, I was a cultural omnivore when it came to researching trends. I studied consumer culture, and not just within the categories I worked in. What trends pointed to the meteoric rise of NA beers?
Demographic trends played a key role. Gen Z and millennials simply don’t have the desire to consume as much alcohol as previous generations. So have cultural trends, like an increased emphasis on health and mindfulness.
Dry January has become a cultural phenomenon to the point that some estimates have 25% of Americans older than age 21 skipping alcohol for the month. Marry up these trends, and you have a perfect scenario for a high-quality nonalcoholic beer to experience explosive growth and nonalcoholic bars and “mocktails” to flourish.
The difficult thing for entrepreneurs is that consumer behavior is always shifting—sometimes slowly, sometimes rapidly. But this is also why there are always opportunities for entrepreneurs who are great at thinking about “what’s now, and what’s next” in that consumer behavior!
3. Embrace niches.
The NA beer space reflects this logic beautifully. Athletic Brewing caters to performance-minded individuals who want a post-hike drink that aligns with their values. Meanwhile, Heineken 0.0 is designed for loyalists who want to stay in the brand family. Budweiser Zero targets sports fans and traditionalists who want a familiar flavor without the buzz.
Instead of one-size-fits-all, the nonalcoholic beer world is embracing micro-segmentation—an approach grounded in the classic segmentation, targeting and positioning, or STP, model. Brands are not building the “one beer for all nonalcoholic beer drinkers,” like O’Doul’s did. Companies are using micro-segmentation to identify distinct consumer segments within this group, creating purpose-built products and campaigns to target them effectively and positioning themselves in ways that resonate uniquely with each audience.
Sometimes being the thing a core group of people think is “amazing” is better than being the thing lots of people think is “meh.”
4. Keep ethics in mind.
It’s fair to put many nonalcoholic beer makers under the microscope. As much as their rise signals innovation and cultural relevance, it also raises important ethical questions—especially when it comes to consumers in recovery.
Nonalcoholic beer is often marketed as a healthy or sober alternative, but the reality is more complex. Most nonalcoholic beers still contain up to 0.5% alcohol by volume, which sounds like an oxymoron. For someone in recovery, that amount—though legally acceptable to be called “nonalcoholic”—can be problematic.
Even for 0% alcohol varieties, the packaging, taste and ritual closely mimic alcoholic beer, which, again, could be problematic.
This presents a marketing ethics dilemma. Should nonalcoholic beers be more explicitly labeled with disclaimers? Should companies clarify that their products might not be suitable for those in treatment or abstaining for medical reasons? Should nonalcoholic beer companies have testimonials from users in recovery, when many recovery centers advise patients to avoid them?
The lesson here for entrepreneurs is to keep in mind that even in an “empowering better lives” entrepreneurial effort, a layer of nuance and complexity must sometimes be reckoned with.•
__________
Mayer is clinical associate professor of marketing at the Kelley School of Business at Indiana University Indianapolis.
Please enable JavaScript to view this content.