1 September, 2025 – Alcoholic beverages such as wines and spirits deliver a feel-good factor to consumers and occupy a platform of quality and indulgence. Even if there is a health-conscious consumer group that is looking to control, reduce, or remove alcohol from their diets, a diversifying collection of alcohol-free alternatives has been developing at a rapid pace. To comprehend this beverage trend, Innova Market Insights takes an in-depth look at how innovators are adding value and excitement to products and delivering a competitive edge in an increasingly crowded marketplace.
Consumer Perception of Alcoholic and Non-Alcoholic Beverages
Markets with strong traditions in wines and spirits tend to have a lower uptake of modern pre-mixed drinks and flavored alcoholic beverages (FABs). Consumers in these regions prefer the quality and taste of traditional drinks over products that may be seen as “adulterated.” France, Italy, and Spain are prime examples of this beverage trend, demonstrating below-average penetration of FABs. Similarly, Japan and South Korea tend to favor traditional and authentic alcoholic beverages. Yet, in more developed nations, such as those in Northern Europe (including the United Kingdom, the Netherlands, and Scandinavia), Australasia, North America, and South Africa, hard liquor and spirits are more popular.
Countries with well-established wine industries have, unsurprisingly, a tendency to have higher consumption rates of wine. An example would be Northern Europe, which stands out for strong wine purchase levels. In contrast to countries with alcohol consumption, religious beliefs affect some regions. This can have an influence, resulting in low uptake in countries with large Muslim populations, such as Egypt, Indonesia, Malaysia, and Saudi Arabia. Elsewhere, consumers of non-alcoholic versions of popular drinks remain relatively niche, with penetration rates of less than 10%. Although on a closer look, non-alcoholic beverage drinkers tend to consume these alternatives slightly more frequently, with one in three alcohol-free customers consuming them more than once a week, compared to one in four alcohol purchasers.
As for other drinks, whiskey ranks as the top choice in most countries worldwide. As vodka continues to be the most popular spirit in Scandinavia, as well as in Germany, Poland, Ireland, New Zealand, and the United States. Two standout features of the report also found that liqueurs are the top choice in Italy, and tequila reigns supreme in Mexico.
What Are The Differences From Beverage to Beverage?
A noteworthy role in beverage choices happens when consumed during social occasions, with variations between drinks. Consumers who prefer hard liquor and spirits tend to associate these drinks with special social occasions. In fact, data found that over 45% of them mentioned enjoying spirits during gatherings with friends and family or parties, while 38% choose these beverages when out at bars or clubs. Additionally, hard spirits are often consumed while on holiday and during personal “me-time” moments. Wine drinkers are different, though, as they are more likely to enjoy their beverage with food. Speaking of food, dining in a restaurant ranked as the third most common occasion for wine consumption in Innova’s research, with a 31% response rate, followed by 26% who drink wine while eating dinner at home.
As mentioned previously, consumers are increasingly considering non-alcoholic alternatives as an everyday beverage and that is no surprise. The habits around drinking them are varied though, and this can be seen in the 21% who said they drink non-alcoholic options while watching TV, compared to 16% for alcoholic drinks. Also, 17% consume them as a daily snack, whereas only 9% do the same with alcoholic beverages. So yes, non-alcoholic beverages are gaining popularity. Elsewhere in the category, if you look at consumers of wines and spirits, there has been a reported decrease in consumption, primarily due to a desire to control alcohol intake, health concerns, and budgetary changes. In contrast, there was a slight increase in the consumption of ready-to-drink beverages and a more significant rise for non-alcoholic alternatives.
Are There Primary Factors Driving the Consumption of Alcoholic and Non-Alcoholic Drinks?
Higher consumption of non-alcoholic beverages can be attributed to changing taste choices and the variety available on shelves. When selecting both alcoholic and non-alcoholic drinks, consumers prioritize the quality of the taste experience above all else. Brand reputation also holds importance, more so than in multiple food and beverage categories. Cost is another major consideration, meaning the quality, tradition, and indulgence associated with a product must align with its price.
In the realm of alcoholic beverages, the focus should be on the quality of the product, its ingredients, the production process, and the overall drinking experience. Conversely, in the case of non-alcoholic beverages, health concerns are prominent, pushing demand for sugar reduction and natural ingredients up. With that said, non-alcoholic alternatives are proving to be more versatile than traditional alcoholic drinks, with more than one in four consumers enjoying them as a mid-afternoon snack and a similar proportion using them to accompany their lunch.
Do These Changes Have a Lot to Do With Lifestyle Preferences?
Concerns around cost are influencing the Western world, where post-pandemic impacts have played a part in rising cost-of-living expenses that are pushing consumers toward cheaper options. Even if there seems to be an allowance for premium drinks as an affordable indulgence. Personal health and planetary health are important consumer concerns, impacting choices across food and beverages. Though environmental considerations are not a primary focus for alcoholic drinks, there is growing interest in improving packaging by using lighter, eco-friendly alternatives.
What About the Growth of Spirits and Liqueurs?
More opportunities for taste and quality innovation are prevalent in spirits than wine, supporting growth in this category. In the global alcohol market, spirits and liqueurs represented 37% of retail value in 2024, while wines accounted for 23%, leaving beer with the remaining 40%. Although spirits outpace wine in value sales, wine shows strength in volume, particularly in out-of-home markets and affordable options, as consumers shift to lower price points. Asia leads the spirits market with a 13% category growth rate from 2020 to 2024, while Europe dominates wine sales, with Eastern Europe showing the best growth at 6%. As for other beverages, wine sales are more evenly distributed, led by the United States and Italy. It should be noted that China is a major player in spirits, with over 90% of sales coming from the local drink baijiu.
What’s Shaping the Category?
Despite being a relatively static category in terms of global innovation, the growth of non-alcoholic options has emerged, with a growth rate of 8% since 2020-2021. Flavored alcoholic beverages and liqueurs are earning interest from consumers, while hard seltzers are declining in popularity. If you consider other drinks such as tequila and fortified wines, these are both rising in popularity. No alcohol claims were found to be noticeable in the FAB and hard seltzers area, but have been growing more quickly in traditional wine and spirits, where penetration has more than doubled over the past five years. Western Europe is the most active region for new product development (NPD), with North America following in second place. Although Asia’s NPD remains below average, launch numbers have risen in recent years. The United States is the leading market for launches in 2024-2025, followed closely by the United Kingdom.
What’s Next for Alcoholic and Non-Alcoholic Beverages Globally?
Looking ahead, beverage trends suggest that one thing is essential for attracting customers, as alcoholic drinks are to be all about taste experiences, and finding special offerings is essential. This can be through novelty, indulgence, or innovative twists on familiar drinks for example. Sustainability is likely to become more center stage as it adds value to brands through responsible sourcing, production, and packaging. While younger consumers are starting to engage with the out-of-home market, at-home socializing remains popular. Therefore, creating shareable experiences is a key area to unlock for social occasions.
This article is based on Innova’s Alcoholic & Non-Alcoholic Beverages – Global report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more