Non-alcoholic drinks aren't just for the sober, as more Canadians cut back
Whether it's for a celebration, a gathering or an evening to unwind, Canadians increasingly favour non-alcoholic options over beer, wine and spirits.
But while much of the narrative has focused on sober consumers, it's also being driven by those who still consume alcohol.
"It's definitely been a shift," said Dan La Cute, founder of the Hamilton-based Free Bar, an online store with a curated selection of non-alcoholic drinks.
Over the last two years, he said, he has seen more health-conscious consumers who still want to have a ritual but don't necessarily want to indulge.
"Previously, they would grab a beer or pour a glass of wine after a long day's hard work, but now they're potentially reaching for a non-alcoholic drink because they either don't want the calories or they don't want the hangover," he said.
A 2024 report by marketing agency NIQ highlights that 75% of non-alcoholic beverage consumers in Canada also purchase alcohol products—not necessarily replacing alcohol but integrating it into a more balanced lifestyle. The report also shows non-alcoholic beverages appeal to mostly younger and middle-aged consumers, with a strong focus on health and wellness.
That's in line with longer-term trends suggesting millennials and generation Z drink less than previous generations. A 2023 Statistics Canada survey found two-thirds of Canadians aged 18 to 22 reported not drinking any alcohol beverages in the previous seven days, compared with between 51% and 57% in all other age groups.
When La Cute launched Free Bar in 2022, curating non-alcoholic drinks from vendors across the world, his customer base was small. They were mostly people who were conscious about health, lifestyle or recovery, he said.
Then, his customer base grew broader, partly fuelled by new information about alcohol consumption.
READ: Labatt expanding its portfolio of non-alcoholic products
In January 2023, the Canadian Centre on Substance Use and Addiction issued updated guidelines on alcohol use saying that anything over two standard drinks a week raises the likelihood of health consequences, including cancer. Health Canada funded the research that resulted in the updated guidelines, but has not endorsed them.
Andrea Grant, founder of sparkling beverage company Barbet, has noticed a similar shift in her customer base over the last three years as more consumers looked for non-alcoholic options.
"It's less so about this segmentation and the separation and it's just more so about the freedom of choice," she said.
Grant said when she and her sister created Barbet, they were focused on making the drink more versatile — mixable with non-alcohol and alcohol drinks instead of being only an alcohol replacement. "I think that people are just looking to expand how they approach social experiences," she said "With that has come an assessment of people's consumption of alcohol."
Robert Carter, managing partner at the StratonHunter Group, said non-alcoholic drinks continue to increase in popularity and are "becoming a more important revenue stream for not only restaurants but the beverage category overall."
Ontario's biggest alcohol seller, LCBO, said sales of no-alcohol drinks saw growth of 73% over the last year and 189% growth since 2022.
Carter said the volume of alcohol consumption has been declining consistently while non-alcoholic drinks are seeing an "exact inverse" with double-digit growth in consumption of mocktails and non-alcoholic beverages.
The rising popularity of non-alcoholic drinks has also created room for more innovation, Carter added.
La Cute said there is already a larger variety of products available for Free Bar to curate from, compared with a few years ago when he first launched the business.
"There are so many more products that are available in the Canadian market, at least that we now have much better options," he said. In addition, Free Bar launched its own brand of non-alcoholic beer in partnership with Toronto-based brewery Rainhard.
Competition is picking up with corner stores offering non-alcoholic drinks and mocktails. But even as more grocers and local liquor stores carry non-alcoholic options, La Cute said it hasn't affected his business.
"It is a bit of a rising tide for all boats and we have a very different consumer than somebody who's going to the grocery store and picking up a 12-pack Budweiser versus somebody that may be looking for that craft experience," he said.
Barbet, meanwhile, faces competition from both the non-alcoholic sector as well as the sparkling drinks category, Grant said. "Whatever channel we take — whether we are taking it as a non-alcohol option or as a sparkling water option, the card's stacked up against the success of the beverage business," she said.
But she sees lots of potential for growth in the non-alcoholic industry — especially as online-only sellers move to storefronts and bottle shops, making their drinks more accessible.
"It's such a young industry that it hasn't really even found its footing yet," she said. "There's just an incredible amount of opportunities for beverage brands to launch right now."
