Non-alcoholic Beverages Market Size, Share & Trends Analysis Report By Product (Water, Bubble/Sparkling Water), By Distribution Channel (Retail, Food Service), By Region, And Segment Forecasts, 2023 - 2030

Market Size & Trends

The global non-alcoholic beverages market size was valued at USD 724.20 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 6.4% from 2023 to 2030. With the growing acceptance of the no-alcohol and low-alcohol categories by consumers, manufacturers in the market are catering to the new trends and have been innovating existing product portfolios, which is likely to bode well for future growth. The ripple effect of consumers opting for non-alcoholic drinks and beverages has been the development of a whole new segment of premium, complex-tasting soft drinks aimed at adult palates.

According to a Waitrose Food and Drink Report published in October 2021, searches for alcohol-free drinks continue to increase by 22% every year. Brands have been keeping up pace with new trends by launching new offerings or expanding existing product lines. For instance, in May 2020, U.S.-based tea brand Good Earth expanded its product offering in the U.K. The company’s portfolio includes a range of fruit & herbal, green, and black teas, as well as original and flavored kombucha, each blended with natural ingredients. According to the 2022 Bacardi Cocktail Trends Report, approximately 58% of consumers globally are shifting to non-alcoholic and low-ABV cocktails and beverages.

With the growing acceptance of the no-alcohol and low-alcohol categories by consumers, manufacturers in the market are catering to the new trends and have been innovating their current product portfolios, which is likely to bode well for future growth. The rising consumer consciousness about the health benefits of consuming bottled water is projected to drive the segment. An inclination toward bottled water over ordinary water, particularly among younger consumers, drives product sales. Observing this trend, several restaurants are providing various types of bottled water.

The rapid expansion of restaurants worldwide is also predicted to create a significant demand for bottled water in the upcoming years. In addition, consumers aim to improve their physical health by opting for beverages that contain no alcoholic content. According to the Beverage Trends Report of 2021 by Goliath Consulting Group, zero-proof spirits, alcohol-free cocktails, as well as low-calorie and low-carb drinks, are preferred by consumers in countries, such as the U.S. and the U.K. Such trends have opened up new opportunities for beverage manufacturers.

For instance, in October 2021, Ritual Zero Proof announced the launch of its liquor replacement by rolling out Gin, Whiskey, and Tequila Spirit Alternatives at Whole Foods Market stores in the U.S., which are also available on Amazon.Non-alcoholic beverages require raw materials, such as nutritive and non-nutritive sweeteners, fruits, and water, along with other materials. Among nutritive sweeteners, high fructose corn syrup is used in almost 90% of all soft drinks. Non-nutritive sweeteners used in non-alcoholic beverages include cyclamate, aspartame, sucralose, and saccharin.

Product Insights

On the basis of products, the global industry has been further categorized into carbonated soft drinks, water, tea, sports & functional drinks, and bubble/sparkling water. The water product segment dominated the industry in 2022 and accounted for the maximum share of more than 29.65% of the overall revenue. The robust development of the tourism industry and the easy portability of sterile bottled water is expected to help generate demand for bottled water. One of the significant factors driving the bottled water market is the progression in user-friendly packaging.

However, stringent quality standards and packaging regulations regarding bottled water are expected to hamper the growth of the market to some extent. The sparkling/bubble water segment is anticipated to register the fastest growth rate during the forecast period. Rising demand for clean, natural water is fueling the growth of this segment. Due to their flavor, euphoria, and health advantages, the flavored variations are becoming more and more popular.

Distribution Channel Insights

The retail distribution channel segment dominated the industry in 2022 and accounted for the maximum share of more than 72.35% of the overall revenue. The segment is projected to expand further at the fastest CAGR during the forecast period. Supermarkets, hypermarkets, internet retailers, and other channels make up the retail channel. Due to the availability of a broad variety of brands and goods under one roof, supermarkets and hypermarkets in this subcategory hold the largest share. Several supermarkets are increasing their selections in the alcohol-free market, including Whole Foods, Target, Aldi, and Walmart.

The food service distribution channel segment is expected to have significant growth over the forecast period. Foodservice is one of the primary distribution channels for non-alcoholic beverages. Busy schedules of people worldwide, coupled with an increased disposable income, often compel them to dine out. New eateries cater to varied tastes and beverage preferences that further drive this trend. A growing number of full-service restaurants are adopting all-inclusive dining practices to serve better its consumers. This involves analyzing local dietary trends and innovating their offerings to align with the same. It increases the frequency of consumer visits.

Regional Insights

The North America region dominated the global industry in 2022 and accounted for the maximum share of more than 24.55% of the overall revenue 2022. North America, especially the U.S., is home to many globally renowned beverage manufacturers. However, the growing prevalence of obesity in the U.S. and Mexico along with taxes on sugar products imposed by the governments restrain the demand for Carbonated Soft Drinks (CSDs), which is a products of non-alcoholic beverages. This drives the demand for low-calorie beverages containing non-nutritive sweeteners.

Asia Pacific is anticipated to register the fastest CAGR over the forecast period. The increasing demand for alcohol-free beverages from developing countries, such as China, India, Thailand, and Malaysia, is expected to drive the regional market. Various government initiatives to develop the manufacturing sector by providing tax cuts, subsidies, and increasing FDI limits are attracting key global players to expand their operations and distribution facilities in this region. Also, due to a shift in beverage consumption patterns, consumers nowadays choose functional and flavored bottled water over carbonated drinks with high sugar content

Key Companies & Market Share Insights

The industry is characterized by the presence of a few established players and new entrants. Many big players are increasing their focus on the growing trend of the market. Players are diversifying their service offerings to maintain a higher share. For instance:

• In July 2022, PepsiCo, Inc. cleared an agreement to buy land near Denver International Airport, where it will build a 1.2 billion sq. ft. manufacturing facility. Denver is funding PepsiCo USD 1 Billion from its Business Incentive Fund to build the plant, which will turn out to be the company’s largest soda manufacturing facility in the U.S.

• In February 2022, Nestlé launched a new plant-based version of Milo in Thailand. The new Ready-To-Drink (RTD) product is soy-based and combines the unique Milo malt flavor to provide a nutritious plant-based alternative

• In February 2022, Jones Soda Co. partnered with The ICEE Company, a leading provider of dispensed frozen beverage treats, to introduce new flavors in the market

Some of the key players operating in the global non-alcoholic beverages market include:

• Nestlé

• PepsiCo

• Unilever

• Keurig Dr. Pepper Inc.

• The Coca-Cola Company

• Jones Soda Co.

• Danone S.A.

• Suntory Beverage & Food Ltd.

• Asahi Group Holdings, Ltd.

• Red Bull

Non-alcoholic Beverages Market Report Scope

Global Non-alcoholic Beverages Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global non-alcoholic beverages market report on the basis of product, distribution channel, and region:

• Product Outlook (Revenue, USD Billion, 2017 - 2030)

  • Carbonated Soft Drinks

  • Water

  • Sports & Functional Drinks

  • Tea

  • Bubble/Sparkling Water

• Distribution Channel Outlook (Revenue, USD Billion, 2017 - 2030)

  • Food Service

  • Retail

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Italy

    • Spain

    • France

    • Germany

  • Asia Pacific

    • Indonesia

    • Malaysia

    • Singapore

    • Thailand

    • China

    • Vietnam

    • Philippines

  • Central & South America

    • Brazil

  • Middle East & Africa

    • South Africa