Robert M. Kerr

Food and Agricultural Products Center

 

Alcoholic beverages have played a central role in social gatherings, celebrations of life’s milestones, customs and traditions for centuries. Various grains and fruits have been fermented to produce beverages since the Paleolithic period. The earliest evidence of such beverages dates back to the Neolithic period in China. It is believed that a fermented beverage made from rice, honey and fruits was produced as early as 7000 B.C.

 

Wine and beer have been the most popular alcoholic beverages worldwide. The phenomenon known as French paradox ascribes the relatively lower heart disease in France to higher red wine consumption, despite a high calorie diet heavy in butter and cheese. Beer consumption in moderation has also been associated with health benefits including improvements in blood cholesterol profiles and even reduced risk of osteoporosis.

 

Effects of various foods and beverages on the health of an individual are very complex. Currently, there are no simple answers to many questions in the field. Scientific interpretations of health outcomes of many foods and beverages are still controversial.

Both wine and beer contain a number of health beneficial bioactive compounds including polyphenols, vitamins and antioxidants. Some argue that the health benefits of wine and beer are due to the bioactive compounds naturally present in them. Others challenge the later claim by noting that light to moderate amounts of all alcoholic drink intakes are linked to reduced diabetes and cardiovascular risk. This suggests that alcohol, ethanol, not the bioactive compounds found in each type of alcohol, deliver much greater health benefits.

 

Although there is no consistent evidence confirming that wine provides greater benefits than other alcoholic beverages, the position of the American Heart Association (AHA) is that one to two drinks a day for men and up to one drink a day for women is associated with a reduction in cardiovascular risk. Nevertheless, AHA recommends having a healthy diet rather than focusing on alcohol intake to reduce cardiovascular risk. Furthermore, the 2015-2020 Dietary Guidelines for Americans states that individuals who do not drink alcohol should not start drinking for any reason, even for health benefits.

 

Today, the global alcoholic beverage market is over $500 billion. Just like many foods and other drinks, trends shaping the alcoholic beverage demand are evolving with consumer concerns about environmental sustainability, personal health and ethical production practices. Artisanal and ethnic flavors and innovative packaging are also significant drivers of this industry. Craft beer, artisanal hard seltzer, Mexican spirits, ready-to-drink cocktails and new flavored malt beverages, sometimes referred to as alcopops, are some of the fast-growing product categories.

 

Increasing number of personal and environmental health mindful consumers are boosting demand and market growth of healthier beverage alternatives, such as low calorie, organic, biodynamic, and even non-alcoholic drinks. Industry experts predict that more moderate and sober-conscious consumers will embrace no- and low-alcohol (no-low) beverages as healthier beverage choices to reduce their alcohol consumption.

 

It is important to note that definitions of low-alcohol, alcohol-free, dealcoholized and non-alcoholic beverages vary depending on the law and regulations in different countries. According to the Federal Alcohol Administration Act (FAA Act), wine could not contain less than 7% and no more than 24% alcohol by volume. The Bureau of Alcohol, Tobacco and Firearms (BATF) labeling regulations apply only to wines containing alcohol within the specified range.

 

Dealcoholized wines are prepared by removing alcohol from a wine and contains less than 7% alcohol by volume. They are not covered by the FAA Act and are subject to the labeling provisions of the Federal Food, Drug, and Cosmetic Act. A malt beverage is defined in the FAA Act as a beverage made by alcoholic fermentation of specific materials. They are not characterized by specific alcohol content. All malt beverages meeting the definition of the FAA Act are within the purview of the BATF statute, regardless of alcohol content.

 

The FDA does not consider the terms non-alcoholic and alcohol-free to be synonymous. The term alcohol-free may be used only when the product contains no detectable amount of alcohol. Beverages such as soft drinks, fruit juices and certain other flavored beverages which are traditionally perceived by consumers to be non-alcoholic could contain traces of alcohol (less than .5% alcohol by volume) derived from the use of flavoring extracts or from natural fermentation. The FDA also considers beverages containing such trace amounts of alcohol to be non-alcoholic.

 

It appears that currently, no-alcohol products are more popular that low-alcohol offerings. According to the IWSR Drinks Market Analysis, a leading source of data and intelligence on the alcoholic beverage market, no-low beer is the leading no-low beverage category. This accounts for 80% of the total global no-low beverage market, and more growth is expected in the years to come.

 

Currently, no-low beer is less than 10% of the global beer market. Craft brewers, rather than large regular beer producers, are leading the innovations in no-low beer category. Innovative brewing techniques and flavors are being used to craft high quality and unique tasting products. Nonalcoholic craft beers made from blends of different hops, premium organic malts and accented with coffee, bittersweet chocolate, peanut butter and oat with hints of caramel flavors are some of the interesting no-low beer formulations available in the U.S. market today. There is interesting market positioning of nonalcoholic beverages including beer, i.e., isotonic nonalcoholic beer targeting athletes and avid exercise fans.   

 

Zero proof tequila, gin, vermouth and whiskey alternatives formulated with all-natural botanicals blended with orange, bitters, sugar floss, vanilla, peppercorn, hemp, agave, charred oak, juniper berries, cucumber or lime emulate spirit flavors and drinking experience without the calories from alcohol. Formulating zero proof spirits is very challenging. Although robust and complex flavor profiles of spirits developed during the aging process are hard to mimic, creative flavor formulations making it possible to craft zero proof spirits enjoyed by the consumers.

 

Popularity of the ready-to-drink mocktails has also been growing, especially during the pandemic. Health, wellness and mindful drinking enthusiasts who do not desire to make mocktails at home are choosing convenience of the ready-to-drink mocktails with distinctive taste, flavor and drinking experience. Some of the products in this category are not only leaving the alcohol out but providing vitamins, beneficial bacteria, yeast and enzymes and probiotic benefits with less than 30 calories.

 

Although regular beer and wine still dominate the global alcoholic beverage market, young generations are craving for unique and artisanal flavors and experiences in the no-low beverage category. The biggest challenge for a new non-alcoholic beverage market entry is that this is an already well-established domain and there are several multinational industry giants to compete.  To be successful, newcomers to this product category need to engage young generations and understand the evolving priorities and expectations of the consumers.