Non-Alcoholic Spirits - Growth
The last few years have seen tremendous growth in the low-alcohol and non-alcoholic drinks category, fueled perhaps by an increase in health-consciousness around drinks, as well as an increase in the desire to drink a variety of alcoholic or non-alcoholic distilled beverages. In fact, the global low-alcohol beverages market is projected to have a CAGR of 8.21%, during the period from 2017-2021, far more than the 2% growth rate for the global alcoholic beverages market as a whole.
Unfortunately, low and non-alcoholic spirits make up just 3.99% of this already small sub-section of the alcoholic beverage market, and so there is very little existing research or data which deals specifically with non-alcoholic spirits in the US. However, there is enough data about other segments of the market for us to calculate a that the global non- and low-alcoholic spirits market has a CAGR of about 29.72%. The US-specific non- and low-alcoholic spirits market has a CAGR of approximately 35.66%. In this report, I'll go through how those figures were estimated and provide a general picture of growth in both the US and global non- and low-alcohol beverage markets.
cagr for us nonalcoholic spirits
Unfortunately, data on the non-alcoholic spirits category alone is simply non-existent. There are a handful of brands, all of which are either privately owned or held by large companies which do not disclose the sales or revenue information for specific brands among their holdings. However, nonalcoholic spirits are included within the low-alcoholic spirits category, and can be assumed to have fairly similar growth rates to this category as a whole, given that the appeal (drinking a spirit without the alcohol) is the same for both groups.
As was already noted, spirits make up a very small portion of the low-alcohol beverages market; just 3.99% in fact. However, we can use this information to help calculate their growth rate. We know that globally, the low-alcohol beverages market is growing at about 8.21%. TechNavio breaks the low-alcohol beverages market down into five categories - beer, wine, RTDs (ready to drink mixes), cider, and spirits. The growth for the first three categories is provided by TechNavio - it is 7.88%, 5.42%, and 8.15% respectively. Note that these three account for 89.07% of the total market between them, and they are all solidly below the overall growth rate of 8.21%, meaning that at least one of the remaining categories (spirits or cider) must have extremely high growth rates to make up for the remaining portion. The regular cider market has a growth rate of 3.5%.
We can compare this with the beer market, as beer is the drink most similar to cider within this category. The regular beer market has a growth rate of 6%, but as we've seen the low-alcohol beer market has a growth rate of 7.88%, meaning it's growing about 1.31 times faster than the fully alcoholic beer market. If this same figure holds true for the similar cider market, then low-alcohol cider is probably growing at about 4.6%.
We can now estimate the CAGR of the global low-alcoholic spirits market. In order to do this, we multiplied the growth rate of each of the other four categories by their market share. This allowed us to see how much of the total growth was in each category, considering both growth rate for that category and its market share. Bear in mind that a category with a large market share (like beer) will have a much bigger effect on the overall growth rate than one with a small market share (like spirits), so it is necessary that both market share and growth rate play a role in our calculations.
This is easier to understand if one considers simple numbers rather than percentages. The overall growth rate can be represented as 821 - 8.21% multiplied by a 100% market share. This combined figure for all of the categories except for spirits, calculated by multiplying their growth rate by their market share, is 702.41. This means that the same figure for spirits must be 118.59, since we know the overall figure is 821. Now we simply divide 118.59 by the market share for spirits (3.99) and find that the global growth rate for this sector is 29.72%. All of these calculations are shown in this spreadsheet, which represents the figures in a clearer way. The final figure seems high, but remember that while low-alcohol beer and wine has been around for decades, low-alcohol spirits are relatively recent, and still only occupy a tiny portion of the overall market, making it easier for them to grow quickly.
Now, the last step is to estimate the CAGR for the non-alcoholic spirits market in the United States specifically, since that figure is for the whole world. This can be done by comparing the growth rates of the overall spirits markets between the US and the globe. The global spirits market has a CAGR of 3.32%, while the US-specific spirits market has a CAGR of 4% - or 1.2x more. Hence, if the same relationship holds true in the low-alcohol segment, we can expect that the market for low and non-alcoholic spirits in the US is growing at about 35.66%.
It is important to bear in mind that a number of assumptions have been made in reaching this approximate estimate of the CAGR for the US non-alcoholic spirits market. Firstly, we have assumed that the non-alcoholic spirits market and the low-alcohol spirits market (which include non-alcoholic spirits) are growing at roughly the same rate, because they have a similar appeal to consumers - being able to drink spirits without the high alcohol content they normally have.
We have also assumed that the relationship between the growth rates for cider and beer is roughly the same in the alcoholic and low-alcohol categories. This assumption has been made because of the drinks about which data is available (beer, wine, and mixes) beer is the most similar to cider. Finally, we have assumed that the relationship between the global spirits market and the US spirits market is fairly similar in both the full and low-alcohol categories. This assumption has been made because there is no data on US-specific low-alcohol drink growth rates broken down by type of drink, as there is for the global data. Therefore, it was necessary to first estimate the CAGR for the global low-alcohol spirits market, and then attempt to estimate the US number from that figure.
While there is not data available on the US non-alcoholic spirits market directly, using a range of other pieces of data, it is possible to estimate the CAGR of the US non-alcoholic spirits market to be approximately 35.66%. This figure is based on calculating a global CAGR for non-alcoholic spirits of 29.72%, as laid out in this spreadsheet, and then multiplying it by 1.2, to account for the faster growth of the spirits market as a whole in the US.