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After several years of strong growth, some suggest that the low and no alcohol category is slowing. Initial consumer enthusiasm was driven by a surge in health consciousness and the rise of mindful drinking trends, yet recent data suggests that demand has plateaued or even declined in some markets. Saturation, limited innovation and a disconnect between consumer expectations and product experience may be contributing factors. Olivia Gautier, senior principal at Verlinvest explores how brands can maintain the trend.

As global consumers increasingly embrace mindful consumption, innovation is happening across all beverage categories beyond just no and low alcohol (nolo) alternatives. Consumers are redefining their drinking habits and embracing a broader range of health-conscious, functional and adult-oriented alternatives.

This transformation is blurring the lines between alcohol substitutes, soft drinks and functional beverages, introducing challenges around consumer education, retail strategy and market positioning.

To stay relevant and build mainstream appeal, zero-proof alternatives must elevate beyond just being alcohol-free and become aspirational brands in their own right: creating unique flavours, storytelling and rituals which resonate with consumers.

The next generation of nolo and adjacent beverage brands will need to adopt a similar mindset – not just removing alcohol but adding something deeper and more interesting to the experience.

Blurred lines: The challenge for nolo brands

The growing focus on self-optimisation, balance and intentional consumption is redefining social drinking, with younger consumers increasingly prioritising function over form.

Late nights are giving way to early evening gatherings and mindful social activities, forcing brands to reconsider their role in these moments. The opportunity for innovation is significant – not just for No/Lo brands but across the entire beverage industry:

• Functional soft drinks with adaptogens, nootropics and botanicals are blurring the line between wellness and indulgence, creating new ways for consumers to unwind.

  
  

• Adult sodas are evolving from mere mixers into sophisticated standalone drinks that rival traditional non-alcoholic aperitifs.

  
  

• Energy drinks are becoming popular among younger consumers seeking a boost on a sober curious night out.

  
  

• Speciality coffee brands are targeting early-evening consumption, with decaf, matcha and functional coffee blends.

However, as categories converge, brands face increasing challenges around positioning and consumer perception:

• Retailers struggle with placement: Should these drinks be categorised alongside soft drinks, alcohol, or a dedicated nolo section?

  
  

• Consumers are unsure where these drinks fit: Are they a treat, a wellness product or a direct replacement for alcohol?

  
  

• The value-for-money equation is unclear: Why should consumers pay a premium for a non-alcoholic option when sophisticated, flavour-led soft drinks are readily available?

Without clear positioning, many no-alcohol replacement brands risk lacking both mainstream relevance and premium appeal. Success will come from creating distinct, compelling brands that consumers actively want, rather than just accepting as a substitute.

The value equation: More than just alcohol-free

When a consumer buys a premium spirit, they are paying for far more than just the alcohol – it is about the brand’s heritage, craftsmanship, sensory experience and cultural significance. The same must be true for nolo brands. Simply removing alcohol isn’t enough; these drinks need to offer something compelling, memorable and desirable.

A report by Club Soda and Boldspace reinforces this point, advising No/Lo brands to move away from labels like 'alcohol free' or 'mocktail,' which imply they are secondary to their alcoholic counterparts. Instead, nolo brands must define themselves on their own merits, crafting a unique identity that isn’t tied to the idea of replacement. This is particularly important for standalone No/Lo brands, which lack the recognition of an established alcoholic parent trademark.

The future of nolo is not about taking something away, it’s about adding something new.

 Winning strategies for nolo brands

So, how can No/Lo brands differentiate themselves and win? Instead of defining themselves by what they lack, No/Lo brands should focus on what they bring to the table: distinctive sensory experiences, cultural relevance and new drinking rituals that fit evolving social habits.

1. Own the occasion, not just the product: Nolo brands must establish what function they serve in key consumption moments. Take Vita Coco – by positioning itself as a hydrating companion for yoga sessions, post-workout recovery and tropical-inspired mixology, it sidestepped direct competition with sugary sports drinks or juices and transformed coconut water from a niche health product into a $2.4 billion lifestyle staple.

The key to brands like Vita Coco is meeting consumers where they are: whether in their health-conscious moments with the original product or in an indulgent mood with Vita Coco Treats.

• Identify and own key drinking occasions – whether it is celebrations, casual socialising, pairing with food, at home unwinding of high-tempo events – and define what solutions your product brings to these occasions (eg, hydration, energy, relaxation or a social buzz).

  
  

• Shape new consumption habits through compelling storytelling, strategic partnerships and consumer education, ensuring your brand becomes an indispensable part of these moments.

2. Build an aspirational brand: The strongest brands go beyond the product. They become social badges and lifestyle choices. For example, Tony’s Chocolonely didn’t just market itself as fair trade chocolate  – it built an entire movement around sustainability, ethics and quality, making it a cult-favourite brand with mainstream appeal.

• Set the bar with unique blends and flavour profiles. Smaller brands have the unique ability and freedom to innovate in more daring and bold ways that established brands cannot.

  
  

• Create an emotional connection through sustainability, craftsmanship or a strong mission. Brands that stand for something resonate more deeply.

3. Create compelling rituals & experiences: This adds depth to the drinking experience. Nolo brands should seek to elevate everyday moments into something special by crafting unique rituals and experiences.

• Inject 'specialness' and a sense of exclusivity into the drinking experience – through a distinctive signature serve and ritual, special glassware or garnishes – but also through sensory-evocative language and imagery on pack, limited editions or seasonal flavours.

  
  

• Connect the product back to a story, an experience or a brand home to discover. Sula, for example, successfully created a wine-drinking culture in India where wine consumption was traditionally low, by leaning into brand and experimental tourism through vineyard tours, wine-tasting sessions and the SulaFest music festival, successfully transforming the brand into a premium lifestyle experience.

Future of nolo: Function over ABV

As we look towards 2026 and beyond, traditional beverage categorisations between alcoholic and non-alcoholic will become increasingly irrelevant. Instead, the consumer is moving towards a holistic view of beverages as functional tools for different occasions and needs  – whether that's energy, relaxation, celebration, social connection or health optimisation.

In this evolving landscape, the future success of nolo brands will depend not on merely substituting alcohol but on redefining how people engage with beverages across different occasions. The brands that achieve mainstream relevance will be those that go beyond replicating alcoholic drinks and which instead craft unique experiences and rituals, establishing themselves as aspirational choices in their own right.