Where is N/A Beer Headed?
Photo courtesy Heineken
In his weekly roundup last Thursday, Alan McLeod flagged this report from Beer Marketers’ Insights:
“Avg NA beer prices down 72 cents, almost 2% for 4 weeks, while category $$ sales still up 15% and volume up 17% in this data set. That includes a nearly $1 per case drop for Athletic and almost a $4 per case drop for Heineken 0.0. Athletic is still almost $42 per case and Heineken NA is at almost $39 per case. So they ain’t exactly cheap. Corona NA down a couple bucks per case too.”
I have conflicting thoughts and opinions about non-alcoholic beer, and I posted an exploratory thread about them on Bluesky. I wouldn’t say I’ve come to complete clarity on the matter, but I’m getting clearer.
Let’s start with the price as a jumping-off place: forty bucks a case is real money. I don’t know where BMI gets its average case price data, but half-cases of Hazy Little Thing, to take one example, are currently being advertised below $20 at various retailers across the country. You pay more for small-batch beer, but we’re basically talking about prices for N/A comparable to craft beer here.
In one sense, this isn’t super surprising—N/A beer is beer, and while it may be a little cheaper to make, it’s not like breweries are selling bottled water. But in terms of the drinking experience, N/A beer is vastly inferior. We say about the very best examples, “you can hardly tell it’s N/A.” A classic case of damning with faint praise.
Most, of course, don’t even meet that standard. In the vast majority of cases (I have tasted around a hundred of these, from a lot of different producers), they have a very distinctive N/A flavor, and represent two or three steps down from an average version of their alcoholic counterpart. That means except for a couple cases, non-alcoholic beer’s ceiling is about a C- taste-wise. It’s no surprise to me that producers are nudging the price down a bit—it’s hard to offer an inferior product and charge the same price as the good stuff.
If I have not been bullish on non-alcoholic beer, it’s for this reason. I like beer and I drink it principally for its taste, not its effect. Most beverages are non-alcoholic, and rather than struggle through an expensive, unpleasant N/ beer, I’ll just have something else when I don’t want alcohol. This is what is slightly mystifying to me. In many cases, N/A is not competing with regular beer, it’s competing with other N/A beverages. Many are a lot cheaper and most taste better. Which would seem to be a challenge for N/A.
Ah, but what about? To my social media post, I heard several rejoinders, and I’d like to consider them individually.
What about people who can’t drink but like beer? Yep, that’s the one clear case for N/A beer. If I had to give up alcohol tomorrow, I would definitely drink an N/A beer from time to time. My relationship with this wonderful beverage goes back too far for me to end it cold turkey. For me, the question isn’t whether N/A beer should exist, but how large its potential market is.
But what about Germans; they drink a ton of the stuff? This is true—N/A has 9% of the German beer market. But there’s a reason N/A fans cite Germany: it’s an outlier. German beer culture is uniquely strong in the world, and more people drink beer socially there than just about anywhere on earth. In Britain, to take a more typical example, estimates put it around 2%. In most places, N/A beer just isn’t a significant part of the market.
But doesn’t N/A serve a social purpose other non-alc beverages can’t? I think this one is also probably more correct than not. I would agree that it seems a little more festive to have that N/A beer down at the pub with friends rather than a Diet Coke, so I’m sure this describes some people. I’m not sure this group constitutes much of the market for N/A beer, though. The vast majority of beer is drunk at home in the U.S.; this isn’t going to be the kind of driver of sales it is in, say, Germany.
To wrap this up, let’s go back to this post’s headline. In the past decade, non-alcoholic beer has gone through an important upgrade over the old Clausthaler era. Breweries started taking it seriously, and the quality, while still not as good as regular beer, is vastly better than it used to be. Athletic demonstrated that there was a market out there for N/A beer made in modern craft styles. The big question is how big that market will become in the U.S.
Here I am a lot more bearish than the industry, for these reasons. It’s a premium-priced product that is inferior in taste to regular beer or other non-alc alternatives. The proliferation of N/A brands is hurting rather than helping, too. With the flood into the market, people are exposed to more of the poor examples. A novelty factor in being able to buy a N/A hazy buoyed the industry, but I have a real question if that’s sustainable. In March of 2024, I wrote, “I will continue to ignore it until its volume reaches whole digits.” It seems that it has—but just. This “rocketship” is moving awfully slowly to support all the interest.
Part of the enthusiasm around N/A rests on an assumption that people are abandoning alcohol, particularly young people. The more evidence we get, however—that one Gallup poll finding aside—that doesn’t seem to be quite right. Cost, shifts in consumption habits, and a multigenerational decline in alcohol consumption all seem to play a bigger role. People are drinking less beer; it does not necessarily follow that they’re drinking more N/A beer. Could N/A beer eventually hit 5% of the beer market? Maybe? I know I’m not betting a lot of money on it.