The First Drop

Dried Out?

By Jeffrey Klineman

As I write this it’s the middle of Dry January, or as my wife calls it, “the only thing the New York Times is writing about this month.”

Just about everyone in the CPG business is aware of the cultural force that this month-long voluntary draught has become since it started early last decade, but in case you aren’t aware of it, send me your email and I’ll make sure you are able to access the 700 or so press releases I’ve gotten in the past three months referencing it as a trend, re-introducing non-alcoholic spirit brands, offering up mocktail recipes, explaining the exponential growth of NA products, and generally letting me know that January is about renewal and clean living and this product has taken the market in a sober storm.

(Of course, the storm is only sort-of sober – I’m also being reminded quite regularly by a variety of THC-added beverage brands of the factoid that, according to at least one poll, about one in five participants in Dry January are getting through it while using cannabis).

Sobriety is certainly hip amongst the young folk, with Gen Z leading the charge and twice as likely to abstain than millennials. Now, since Gen Z includes kids born in the late 2000s and 2010s, we know that many in that generation are legally required to abstain, but we know that attitudes seem to be changing. One of my favorite quotes about it came during an interview on NPR’s Marketplace with Little Saints founder Megan Klein, who said she had heard a kid from Gen Z call alcohol “Boomer Technology.”

In the past couple of years we’ve seen the growth of alcoholfree bars, alcohol-free spirits stores, and my personal favorite, alcohol-free hard seltzers. We know we’re expecting to see even more offerings in the future. But, in a question that many drinkers face themselves, how much is too much? Let’s look at the opportunities vs. the hype.

One good aspect of this near-universal disarming of drinks has been the massive renaissance in the alcohol-free beer industry. Watching companies like Athletic Brewing become one of the fastest growing craft breweries in the country, tasting products from established breweries like Dogfish, enjoying the craft nature of beer analogs from Hoplark has helped establish that good beer doesn’t necessarily have to have alcohol in it. And that’s great, because beer is a year-round drink, one that often is consumed repeatedly during a particular drinking “session,” and one that has near infinite scale and variety as a category.

In other words, the success of NA beer relies more on brewers’ ability to produce a terrific product with repeated use occasions that lines up with more than just a month of sobriety.

As an aging beer drinker, I’ve started to join the ranks of those who occasionally mix in an alcohol-free beer into my sessions because I know that it’s good to take breaks, particularly at my age. Pacing is important. Not only are there lots of aging beer drinkers, there are lots, and lots, and lots of beer drinking occasions. The growth of NA beer makes sense because it covers more than just the occasional cocktail party or bar outing, but that enormous range of situations when beer is the default drink of choice. As a product derived over the centuries in large part for refreshment (even hydration!), beer is ubiquitous. The notion that one could engineer booze out and still create that refreshment, and the ability to put it in so many of the places that beer already thrives, is so good that it isn’t even revolutionary –the trick to so many of these products isn’t that they’re alcoholfree, it’s that they’re a massive improvement on the alcohol-free beers that consumers have previously become resigned to. Just like the craft beers that came before them were a qualified improvement over many of the beers already on the market.

Despite massive growth seen at places like the Fancy Food Show, and even predictions from the experts that we’re going to see a massive expansion in brands and sober lifestyles, the idea that we’ll see a big set of winners in NA spirits isn’t as clear to me. For one, it still seems to be powered by the idea that it’s what’s missing that counts, as opposed to a quality improvement on what exists already. First, let’s look at pre-mixed drinks: there are a vast array of non-alcoholic products – soft drinks – that don’t have alcohol already and tend to substitute for highballtype cocktail blends. That’s not to say that the idea of a nonalcoholic gin and tonic or Paloma isn’t totally unpalatable, but rather that so many tall drinks have soda or soft-drink based analogs that it cuts pretty heavily into the total potential market. You get the impression that there’s a thundering herd of brands heading for a tiny hole in the fence. One or two might squeeze through, but don’t expect them to create a massive market.

Now, let’s talk basic spirit substitutes, or the Lyres and Seedlips of the world. Can there be complex, interesting spirit substitutes that have a solid price point and are viable in a “treat” environment – both for the temporary abstainer or the long-term teetotaler? Sure. Judging by my inbox, there are dozens aiming to fill that role, but their existence is constantly pegged to a market that appears, Brigadoon-like, every January. An optimistic reading is that Dry January’s long-term effect is to create a market among an expanding set of sober-by-choice consumers, but even then the growth is hardly going to sustain the number of brands we’re seeing right now.

More concerning for me is that there’s a hint of opportunism that creates a market out of those who are sober because they have to be, as opposed to by choice. There’s already some medical data that indicates these kinds of products are likely to cause relapses for those in recovery, and a lot of them just won’t risk it, anyway. This kind of product shouldn’t be used to create social pressure for those in recovery to stick around in places where they might not otherwise want to be. Sobriety can be hard enough without wandering through a thicket of products that claim to offer an accurate substitute for one’s addiction.

That also applies for NA beers, of course, but there’s a market for active drinkers there as well. How many “flexitarian” beer drinkers there are will ultimately determine the size of that market, and I’m betting its many pallets bigger than those who are going to spend the dollars to habitually nurse a bottle of faux gin, no matter how close it might be to the real thing. Naturally, there will be winners, but basing a gold rush on one dry month is going to lead to a long hangover indeed.