World: Nonalcoholic beer on track to overtake ale as second-largest beer category worldwide

Nonalcoholic beer is on track to overtake ale as the second-largest beer category by volume worldwide this year, according to a new projections from industry tracker IWSR.

While overall beer volume fell roughly 1% in 2024, volume for its nonalcoholic counterpart grew 9% worldwide, according to IWSR. The category’s growth accelerated in 2018 and has continued to outstrip the broader beer market since then.

IWSR is projecting that no-alcohol beer will grow by 8% annually through 2029, while ale’s volume is expected to slide 2% annually in that same period.

Despite recent growth, no-alcohol beer is far from becoming the top-selling beer category globally and only holds about 2% of worldwide beer market share. With 92% market share, lager is far and away the largest beer category and still growing, albeit at a slower pace than nonalcoholic beer.

No-alcohol beer has gained popularity as more consumers cut back on their alcohol consumption, prompting brewers to invest in zero-proof alternatives. The trend is particularly striking across younger age cohorts; Gen Z drinks less than prior generations at the same age, and millennials hold the largest share of no-alcohol drinkers, according to IWSR. Younger drinkers use buzzwords like “sober curious” and “damp lifestyle” to describe moderating their alcoholic intake, rather than abstaining entirely.

Additional fuel for the trend comes from the companies making nonalcoholic beers, which have gotten better at mimicking the taste of their alcoholic twins. Practically every major beer brand, from Diageo’s Guinness to Heineken and Anheuser-Busch InBev’s Budweiser, has rolled out a zero-proof version over the last five years.

Nonalcoholic beer’s worldwide retail sales surpassed $17 billion in 2023, according to Bernstein. Looking at global markets, Germany, Spain and Japan bought the most nonalcoholic beer that year. The U.S. landed in sixth place for its no-alcohol beer sales, although its ranking falls much further when measured by overall sales penetration.

Much of the growth in the U.S. is fueled by Athletic Brewing, now the top-selling no-alcohol beer brand. The upstart, which was founded in 2018, holds 17% of the category’s volume share, edging out AB InBev’s Bud Zero and Heineken’s 0.0 version. Just three years earlier, Athletic held only a 4% share. The company was reportedly valued at roughly $800 million in its latest funding round in 2024.

Even nonalcoholic beer hasn’t been immune from the rash of celebrity-backed alcohol brands. Actor Tom Holland launched Bero, retired basketball star Dwyane Wade co-founded Budweiser Zero with AB InBev, and podcast host and actor Dax Shepherd created Ted Segers.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .