Did the Booze Boom Bust?
Over one week in October, Craft & Crew Hospitality, a restaurant group that owns six spots across the Twin Cities, sold 500 nonalcoholic beverages. We’re not talking Coca-Cola here—we’re talking about a well-crafted mixed drink or a nonalcoholic beer or wine. This is in addition to the sale of 200 THC beverages, which only became an option at the restaurant after Minnesota’s July law change. Over the same period last year, the company sold fewer than 100 nonalcoholic (NA) beverages.
The “mocktail” section of the Craft & Crew menu was launched in 2019. The menu also offers nonalcoholic beer and wine. NA drinks, priced between a soft drink and a cocktail, now account for 10% to 20% of the company’s beverage sales, compared to 2% to 5% a year ago, says David Benowitz, president of Craft & Crew.
So alcohol sales are surely down? Benowitz says no, though he notes a slight decrease in beer sales, balanced by the growth of mixed drinks with liquor.
Benowitz says the NA drinker is a new customer: This is “a whole new demographic who, if we didn’t have that offering, wouldn’t come in at all.”
Is the NA boom merely this decade’s resurgence of a cyclical trend? Remember, O’Doul’s has been around since 1990.
This rise in demand for NA drinks—while the demand for alcohol remains steady—is in line with global and national data. Researchers say nondrinkers are not the NA customer base. Rather, the rise in NA options is powered by the wellness-aware / “sober-curious” young folks.
A report by global marketing research firm NielsenIQ showed that in 2021, U.S. NA beverage sales increased by 33% to $331 million. But these options still make up a fraction of the beverage market. According to data released by the IWSR Drinks Market Analysis, global beverage alcohol volume grew by 3% in 2021. Deaths from excessive alcohol use also are at an all-time high, per the CDC.
And what about Minnesota? According to state alcohol tax records of on- and off-sale purchases, spending on alcohol has continued to steadily grow over the past decade at least. There was a small dip in beer sales and an increase in wine sales in 2020, but these sales returned to normal in 2021.
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Meanwhile, the local business community has advanced its NA offerings. Minneapolis-based Bauhaus Brew Labs offers a “Nah” branded line of nonalcoholic beers. Finnegans, based in Minneapolis, recently bought Hairless Dog, a zero-alcohol beer brand crafted by two locals. One-third of Minnesota’s breweries use technology that removes ethanol from already brewed beer and wine, a product from ABV Technology of St. Paul.
Is the NA boom merely this decade’s resurgence of a cyclical trend? Remember, O’Doul’s has been around since 1990.
Benowitz doesn’t think so. Nor does David Burley, co-owner of Blue Plate Restaurants, a company that has seen similar trends as Craft & Crew has. “My gut tells me people are trading up,” he says. “They’re looking for a reward that happens to be nonalcoholic. Before they would get an iced tea, or a pop, or just a straight water. Now, they spend a few more dollars and get something interesting, something unique that still ensures they’re comfortable driving and going back to work the next day.”
And it seems everyone is riding the wave. Honeycomb Salon at 35th/Nicollet has opened Marigold, a shop attached to the salon that sells NA drinks, including alcohol-free spirits, beer, wine, and THC drinks. Owner Erin Flavin stopped drinking alcohol in 2020. When she tried to find substitutes, options were limited. When Marigold had its soft opening in November, there was a line out the door. She wasn’t surprised. “My market research is sitting in my salon chair every day,” she says.
