THE GIST
As non-alcoholic (NA) beers post headline-making sales and catch the attention of the broader beverage industry, they’re also growing in a quieter way: prices. The emergent category has for years operated on a small scale but with significant growth, yet recent increases are creating new tension. NA beer makers who dream of a time when they own 10% of in-store sales (but so far have yet to crack 1%) now have to sell shoppers on products that can cost the same as—if not more than—full-strength craft beers and other non-alcoholic options.
NA beers have posted the highest increase in weighted average base price among all alcoholic and low-/no-alcohol categories over the last two years, a measurement that tracks a typical scan price of a package of alcohol, without discounts or promotions. NA beer as a category increased its average by +21.1% from 2020-2022.
During the same period, overall beer increased its base price +6.3%.
Craft beer increased by just +0.2%.
According to chain retail sales data from market research company IRI, non-alcoholic beers now have an average base price of $10.47, which is higher than typically expensive categories such as imports ($9.55) and craft ($10.19), and as a category is second only to wine ($11.13).
These price increases are occurring among both long-standing, nationally available companies as well as new entrants. Base prices for BrewDog Nanny State (+25.4%), Heineken 0.0 (+12.9%), Busch NA (+7.2%), and Brooklyn Special Effects (+7%) have all seen noticeable rises. At the same time, new brands—particularly those from small, specialty breweries such as Grüvi, Partake Brewing, and Two Roots Brewing Co.—entered the market at elevated price points compared to the base prices for long-standing brands like O’Douls or Buckler.
Consider this:
A six-pack of Heineken 0.0 from a Target in College Station, Texas, costs the same as a six-pack of standard Heineken: $9.99.
At an Albertsons in Kalispell, Montana, a six-pack of Lagunitas IPNA IPA is costs as much as the brewery’s standard IPA: $10.49.
Shoppers at a Meijer in Appleton, Wisconsin, will pay $8.49 each for a six-pack of Sam Adams Just The Haze IPA or a six-pack of Sam Adams Winter Lager.
“Both macro brands and [craft NA maker] Athletic, absolutely we saw a pretty rapid price hike for those brands. Then a lot of new brands came in at that already higher price,” says Marc Gelsomino, beer buyer for Beverage Warehouse in Winooski, Vermont, the state’s largest alcohol store. “You’ll pay the same for a four-pack or six-pack [of NA] as you would for another craft product in that style.”
Increased prices are not in themselves a bad sign, but a natural inflection point for any emerging category. It mirrors the shift craft beer took a decade ago when small producers with premium prices entered a category once dominated by regional and national brands. Unmet consumer demand has given non-alc beermakers a good runway so far; now they can’t afford to let higher prices force them off course.
WHY IT MATTERS
Preceded by years of sales momentum, these higher prices will help determine how widely accepted non-alcoholic beer has become among drinkers of all backgrounds and income levels. NA beer brands have so far been able to raise prices, because many new category entrants seek to position themselves as premium products that consumers expect to cost more.
Non-alc beer represents about 0.6% of overall beer sales volume in grocery, convenience, liquor, and other chain retail stores. As these brands seek significant volume growth, the category is starting to arrange itself into clear price tiers, with old-school brands like O’Doul’s at budget beer prices ($11.48 a 12-pack), while craft options like Partake run for $29.99 a 12-pack. This represents a key moment for NA beer as a whole, where higher prices risk alienating budget-conscious shoppers, especially during a time of inflationary pressure when everything costs more and budgets have adjusted for many. In turn, this has the potential to cement NA beer as a strictly luxury product—something that runs counter to at least one brand’s stated goal of being “beer that you can have with a weeknight dinner, post-workout, or anytime.”
Many retailers, especially specialty grocery stores and natural food stores, have been eager to expand their non-alcoholic beer sections. They’ve found many of their shoppers will add an NA pack to their carts in addition to other types of alcohol, but these aren’t the shopping habits of most price-conscious shoppers. Retailers could benefit from incremental purchases of high-end NA beer the way they would if those same shoppers bought a bottle of decent wine or some fancy holiday cookies.
Ultimately, pricing within the non-alcoholic beer category is inextricable from its plans for broader growth. Athletic founder and CEO Bill Shufelt has said he wouldn’t be surprised to see NA beer grow to 10-20% of all U.S. beer sales sometime between 2025 and 2030; Rob Fink, founder and CEO of U.K.-based Big Drop Brewing Co., which also sells its beer in the U.S., cites a future in which NA beer is 5-15% of overall U.S. beer sales. Both predictions would require an unprecedented growth rate that has never been accomplished by any category in standard, low-, or no-alcohol: At its peak in 2021, hard seltzer barely cracked 10% of the U.S. beer market.
Premium pricing may be a realistic business model for Big Drop and other specialty brands. But if NA beer as a whole wants to capture a double-digit share of the U.S. beer market, it will need to broaden its customer base beyond high-end grocery store shoppers. So far, its success has come from customers who are receptive to NA beer’s health-conscious messaging and above-average price point. The next phase of its growth may necessitate outreach to shoppers who will balk at non-alcoholic options that offer no buzz and cost dollars more than their favorite beer (or juice, energy drink, or tea).
So far, though, existing NA beer customers seem willing to absorb these higher costs. Survey results from the Brewers Association and academic research has shown that many NA beer buyers have the disposable income to pay for more expensive products.
“I always felt like it was going to scare people off [non-alcoholic beer]. With anything else, when price goes up, people will mention it, but I can’t say that it’s changed anyone’s buying habits,” Gelsomino says. “I’ve heard less about price increases for NA than price increases in broader alcohol.”
This tracks with what the industry has seen regarding prices: Craft breweries have been reticent to increase prices despite rising ingredients costs, worried that shoppers will simply buy less, turn to less expensive brands, or shift drinks categories all together. But specialty NA beer—and its consumers—seem insulated from this type of worry. The idea that non-alcoholic beer becomes solidified as an expensive indulgence is likely more concerning for macro brands who intend to appeal to a broader audience.
Ted Fleming, CEO of the Calgary-based Partake Brewing, wants drinkers to view his brand as “an affordable, premium product.” After launching in U.S. retailers in 2019, Fleming says Partake had to raise its pricing for wholesalers this year as a result of the increased cost of ingredients and packaging materials, growing its shelf price by about $1 per six-pack. (Partake retails for $10.49 per six-pack at a liquor store in Denver, the same price as six-packs from Dogfish Head, Great Divide, and more.) But Fleming doesn’t believe that higher prices for NA across the board will scare off the kind of shoppers who can afford Partake and similar craft brands.
“In many ways this is bringing in new consumers who were alienated from the category before because of the lack of flavor and variety within non-alcoholic beer,” he says. The shoppers Fleming is referring to are people who had the option to purchase NA beer before, but didn’t do so because they didn’t view it as a premium, high-quality product.
But this creates tension for the NA beer category: Fleming acknowledges prices have to be relatively high both to cover the cost of producing flavorful, craft non-alc beer and to signal a premium product. But those prices are out of reach for an unknown number of cost-conscious, younger (and likely non-white) customers, setting NA beer up for some of the same struggles that craft beer has generally had connecting with broader audiences beyond its white, relatively well-off base. Non-alcoholic beer makers can say they want their products to be affordable, but these recent moves aren’t in service of that goal.
It’s no surprise, then, that existing fans of NA beer are likely to be less price-conscious than other shoppers. A Sightlines+ analysis of the non-alc beer market shows six of the top-10 states for NA beer sales volume also have median household income rates higher than the national median. This matches research from England that found the most likely shoppers for no-alcohol beer there are “relatively affluent,” as is true of consumers of alcoholic craft beer, who tend to have above-average household incomes.
Premiumization has been a throughline across beverage alcohol for years, with customers willing to spend more for beverages they perceive as having better ingredients, more flavor, more convenient packaging, or higher alcohol. But premiumization within the NA beer sphere has only been around for a few years, and it’s not yet clear what the size of the opportunity for the emerging craft NA category is.
Since roughly 2018, non-alc beer has grown its market share in retail stores frequented by wealthier consumers. For example, Athletic’s Bill Shufelt recently told Beer Business Daily that non-alcoholic beer makes up about 8% of total beer sales at Whole Foods, and that Athletic is the second-best-selling “adult beverage” brand in those stores behind White Claw. Whole Foods shoppers may not balk, or even notice, when an Athletic six-pack costs $1 more than it did a month ago when, according to analytics firm Numerator, a “typical” Whole Foods customer is a 25-34-year-old person with a graduate degree and an annual income of more than $80,000.
Big Drop’s Rob Fink compares craft NA to artisan cheese: Sure, there are less expensive alternatives, but they’re generally mass-produced and not as flavorful. Artisan cheesemakers don’t need every single shopper to choose their pricier Camembert to still do a decent business. Fink says he’s never envisioned that Big Drop would be the number-one NA beer brand, but that craft NA will grow its niche in proportion to overall NA beer.
“I know the majority of consumers will still be drinking more mass-produced non-alcoholic beers, and that’s fine. … If even 3% of [overall NA beer] was craft NA, that’s enormous,” Fink says.
Words by Kate Bernot