Mass behavioural change – new revenue opportunities

 

Alcoholic drinking is out; sober life is in. 

For the first time in centuries: it’s global; people in mass are choosing sobriety over drunkenness. 

It is a new wellness market that is exploding in new revenue opportunities. They are often called the Sober and Curious segment – it’s changing many markets. 

At the core, the change is Value-based shopping, people who spend their disposable income with businesses that align their purpose and values with and support their lifestyle choices. 

Food Navigator: a specialist B2B media, business intelligence and events group, the value of the nonalcoholic drinks market has exploded. 

• $11 Billion plus = the value of the low or no-alcohol beverages market in 2022,
• Annual expected growth rate +7% plus 

Investors are riding on the nonalcoholic train. 

 

In-demand nonalcoholic beverages use ingredients including kombucha and coconut water. 

• Diago-backed Distill Ventures invested $5m in beverage brands with founders from underrepresented communities in 2022 and has committed to doing it again in ’23. 
• Exceptional Ventures, a ~$24m fund focused on health, food, and fintech brands, specifically in health and wellness, is investing in brands like fermented tea maker Real. 
• Poppi is also benefiting from the wellness connection. The prebiotic beverage landed $30m in Series B financing, following a $13.5m Series A round last year. 
• Boisson: record-breaking seed round in the Nonalcoholic beverage space raising $12m, which brings their total valuation to $47m. 

Industry challenges include stiff competition and the need to constantly differentiate and innovate to meet and exceed changing consumer preferences. 

Success in crowded markets: niche down, scale up buyer attention and engagement, clear differentiation,

 

 Moment was created to replace meditating because — according to the founder — it’s too much work to sit quietly and breathe (that is a problematic differentiation to sell)

 

Peak Cocktails: differentiates with – Alcohol-free cocktails for your peak performance. The ingredients optimise health and performance. According to its website – it’s an adult drink that doesn’t make you feel like crap. 

 

Financial Impact 

 

The Sober and Curious drinkers save significant money by skipping happy hour(s) and days. 

High-end retail and restaurants are taking note of the Sober and Curious segment. 

 

NYC Michelin-starred restaurant Le Jardinier recently added house-made zero-proof offerings to their cocktail menu.

Five Markets if you move quickly – these may be some underserved segments.

• The mum-to-be market: this appears to be an underserved market – potential accessible differentiation opportunities may live in this space, 
• Adaptogenic drinks market: contain a cocktail of herbal and plant-based ingredients, from ginseng to CBD, and make claims about increasing mental alertness and energy and helping you relax. Look for gaps in the market. 
• Restaurants and bars: the financial impact of less revenue from alcoholic products provides a gap in the market to educate and sell them new nonalcoholic mixers that complement their food menus. 
• Nike of nonalcoholic drinks: Leverage athlete’s brand power to support your new brand—partner with sports stars to influence your future revenue. Your performance-enhancing drink – is wanted by everyone. 
• Esports boom market: there are millions of independent gamers with millions of followers you could target to sell your ‘gamers” nonalcoholic drinks to. 

 Locations where demand is highest

Demand for nonalcoholic drinks is most substantial in locations where the chic with significant incomes hang out. 

The container is critical to revenue growth.

About 60% of all Non Alcoholic drinks come in earth-friendly glass containers. Sustainability, purpose, values, and health provide opportunities to merge many smaller brands into a sustainable brand group. 

Celebs are getting into the game – JLo is in. 

 

You know an industry is worth investing in when the famous and sober-ish invest. 

Other celebrity brands, 

• Bella Hadid’s Kin Euphorics: transforms the ritual of drinking into a “conscious connection.”
• Katy Perry’s apéritif brand, De Soi: is inspired by the French ethos of pleasure and restraint.
• Cameron Diaz: radically transparent wine brand, Avaline.

 

Even in the most crowded markets, there’s plenty of opportunity.

How is your business exploiting new demand, better differentiation and new markets today? 

 

Regards

David