Social stigma still overshadows 0.0 drinks for Gen Z, even as Diageo, Heineken and AB InBev bet big on alcohol-free options

Fortune
01-03

A burgeoning market for non-alcoholic drinks in recent years has proven that opting out of booze can be cool, whether it’s Dry January or not. 

Some of the world’s biggest alcohol brands have bet big on this trend. Diageo’s Guinness 0.0 stouts and Heineken’s 0.0 beer are prime examples. The drinks have been lucrative for the two companies, which have historically built their fortunes offering mainstream beer and liqueur. 

Yet despite the popularity of the so-called “0.0” beverages, social pressures still overshadow people’s choices and keep them from choosing non-alcoholic drinks. 

“For generations, alcohol has played a central role in the way humans socialise, therefore dominant assumptions and stereotypes surrounding our drinking habits remain deeply ingrained in society,” University of Oxford professor Charles Spence said. 

Gen Z, who are either new to drinking or have been drinking for fewer years than their older counterparts, felt the most pressure when it comes to alcohol consumption, a study conducted by Oxford University and Heineken with IPSOS data revealed on Thursday. And although this demographic is happy to choose non-alcoholic drinks, there’s one caveat: they’ll do so only if their friends do. 

Gen Z is a decisive group for companies doubling down on non-alcoholic drinks. They’ve been the main drivers of the alcohol moderation movement, making their sentiment towards the drink category key to its growth. 

The stigma surrounding non-alcoholic drinks has certainly begun shifting as more brands crop up across the world, offering their products in pubs alongside regular beer taps. 

In general, “older consumers still have a bit of their old habits, which is that 0.0 beer is for when you’re giving up, whereas Gen Z are much more open to this fluidity in relation to moderation,” Alison Payne, Heineken’s global marketing director for zero-alcohol beverages, told Fortune last year.

Another trend that emerged from the Oxford University study, which looked at data from nearly 12,000 adults across five countries, was that many people over-promised when it came to opting for non-alcoholic drinks. A majority of them wound up choosing alcohol, possibly owing to peer pressure. 

“Reports from people suggesting that they want to try non-alcoholic versions of alcoholic drinks doesn’t necessarily always translate into increased sales,” said Spence, who specializes in experimental psychology, according to the Financial Times.

Even though social factors seem to hold people back, companies have significantly benefited from investing in this category. Diageo, one of the world’s biggest alcohol companies, has seen both, catered to and fueled the interest in the area by offering low- or no-alcohol alternatives to many of its flagship brands—from Seedlip to Tanqueray. Guinness 0.0’s sales more than doubled in Europe during the previous financial year, having grown double digits yearly since 2021.

Belgium-based AB InBev, which brews Budweiser and Stella Artois, has also seen its popularity soar. It now claims to control about 20% of the global market for non-alcoholic beers. The brand continues investing heavily in it as part of its long-term strategy as the trend unravels, giving alcohol companies a large market to tap into—now and in the future. 

“If you think about non-alcohol beer as it was two years ago, maybe one would not invest,” AB InBev’s CEO Michel Doukeris told Fortune. “But because we are projecting 10 years down the road, we decided to invest globally. We developed the technology, which is pretty neat.”

This story was originally featured on Fortune.com

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