There are a host of factors pushing Canadians to drink less alcohol. Inflation and rising grocery prices have forced many to cut back on luxuries, such as alcohol, to save money. Many Canadians are also prioritizing their mental and physical health, which has led to a rise in moderation mindsets such as the sober curious movement. Consumers’ focus on health and wellness has also contributed to the rise of functional beverages, drinks with ingredients that offer added health benefits.

An Ansira report, 2026 Alcohol Trends, found that alcohol consumption fell from 67 per cent in 2022 to 54 per cent in 2025 in the United States. In 2026, alcohol consumption is expected to continue its downward trend, as low- and no-alcohol beverages continue to gain a greater share of the market.

How moderation mindsets are reshaping drinking culture

Sober curiosity is when a person tries to be more mindful of their alcohol consumption and tries to reduce or stop drinking alcohol. This lifestyle change is rooted in re-evaluating society’s drinking norms, living a healthier lifestyle and embracing NA options. Younger generations, especially Gen Z, are leading this movement, as they are choosing to simply not drink alcohol.

A 2025 report on the Sober Curious Movement by Circana stated that “65 per cent of American Gen Zers planned to drink less in 2025, and 39 per cent planned to adopt a dry lifestyle not just during January, but during all of 2025.”

For Angela Hansen, the founder and owner of Mocktails – Vancouver’s first exclusive NA bottle shop – creating an entirely alcohol-free store was a deeply personal matter. Hansen struggled with an unhealthy relationship with alcohol for many years. When she quit drinking, she wanted to find NA options that could replace the routine and experience of drinking alcohol. During this period, Hansen also noticed many people in her life slowing down their alcohol consumption and saw the trend of ‘zebra striping,’ the practice of alternating between NA and alcoholic drinks, becoming more commonplace in social settings.

Hansen was blown away by the products available, but realized that an exclusively alcohol-free store like Mocktails didn’t exist in Vancouver. “I felt there was a space that needed to be filled for people to have that exclusivity and that inclusive place for people to come and buy NA products without the pressure of alcohol,” she said.

At her store, Hansen sees firsthand the changes in consumers’ drinking habits. Her customer base is diverse and includes the sober and sober-curious, people in recovery, pregnant women, new parents, and both older and younger generations. She sees the older Gen Xers like herself who overindulged in their youth and are making lifestyle changes that include not drinking anymore. Then there are the younger generations, many of whom don’t drink to begin with.

“In my generation, we used alcohol as a medication. [Now], you aren’t ostracized anymore because you are choosing not to drink. It is becoming more common not to drink or drink less,” Hansen said.

Hansen reflects on how many of her older customers have been recommended by their doctors to stop drinking or are taking medications that interact with alcohol. However, these older generations have developed a routine of drinking after work. “That kind of hand-to-mouth ritual is important to the older generation, especially,” Hansen said, so she is proud that people can come into her store and find an NA alternative that allows them to continue their routine.

Hansen says she also finds that the growing selection and quality of NA products are making it easier for consumers to make healthier choices, and that NA alternatives often taste as good, or better, than their alcoholic counterparts. She also sees NA products as contributing to more inclusive spaces. Having struggled with an unhealthy relationship with alcohol, Hansen explains that for her, going out for a drink isn’t about looking for a buzz. Rather, she is “just looking for the ritual and the taste of it and the experience.”

When she goes to a restaurant and sees NA options beyond soda and juice on the menu, it makes her feel thought of and included.

Crafting beverages for under-served demographics

When Olivia Lovenmark-Hay, founder of Duchess Cocktails, became pregnant, she quickly realized that she could no longer enjoy the beautiful cocktails that she loved so much. “I hate to say it – it sounds naïve – but all of a sudden it opened my eyes that a good chunk of the population is going to go through pregnancy and they might like an alternative,” she said.

At the time, Lovenmark-Hay was working on creating NA equivalents of her existing cocktail lineup. When she launched her NA cocktails in fall 2023, she received many messages from pregnant women and new moms who were grateful for the NA options, as they could continue enjoying cocktails without worrying about the effects of alcohol. Lovenmark-Hay specifically designed her brand with midlife women in mind. “It is an underserved demographic, and it is an audience that prioritizes quality and experience,” she said.

At the time, Lovenmark-Hay didn’t see herself represented in the products available and was motivated to create Duchess Cocktails to meet women where they were at in life. Whether they were looking to become pregnant, already pregnant, menopausal, or simply prioritizing wellness in their lives, “all these life changes dictate what they eat and drink,” she said.

Her instincts proved correct, as a report released by Circana highlighted the increasing popularity of NA drinks among American women who are pregnant or breastfeeding. “In 2023, 25 per cent of women who gave birth within the last three years had an NA drink while pregnant or nursing. In 2024, that percentage jumped to 39…,” the report stated.

Staying competitive in hybrid drinking occasions

To better meet her customers where they are at, Lovenmark-Hay is expanding the Duchess portfolio to include spritzers and sodas. Her current line-up of cocktails is packaged in glass bottles and has a minimum ABV of 12 per cent. Duchess spritzers will have a lower alcohol content and be packaged in cans for easier transportability. The Duchess spritzer and soda are meant to provide more affordable options to complement her premium offerings.

Diversifying her product offerings into low- and no-alcohol categories is also a strategic decision, as she sees consumer behaviours shifting in that direction and wants to stay ahead of the competition. Current data backs her up, as “2024 saw another year of double-digit volume growth for low- and no-alcohol in Canada. The forecasted volume… for no-alcohol beverages between 2024 and 2028 is up seven per cent” (IWSR). Growth in this category is primarily attributed to younger demographics and moderation mindsets.

Lovenmark-Hay says she isn’t too worried about NA beverages lowering the rate of alcohol consumption. She finds that consumers are instead becoming more educated about how they drink and what drink options are available to them. For example, consumers are moving towards hybrid drinking occasions where, instead of only drinking alcoholic or NA products, they may choose to enjoy both types of products on the same night, so that they won’t have a hangover the next day.

Wellness is becoming more significant in shaping consumers’ drinking habits, so “now we are just giving them an option to drink when they don’t want alcohol,” said Lovenmark-Hay. She wants her products to remove the stigma of not drinking alcohol in social settings by giving people NA alternatives that look and feel the same as alcoholic offerings. “If there isn’t a difference between what you are choosing, I think people feel more relieved and relaxed, and I think it allows people to have a good time on their own terms, which is really important in social settings,” said Lovenmark-Hay.

Why RTDs are continuing to outperform traditional categories

Globally, the ready-to-drink (RTD) beverage market is projected to grow by 116.45 per cent over the next 10 years, increasing from $35.14 billion in 2025 to $76.06 billion in 2035, according to a report from Business Research Insights. Spirit-based RTDs are particularly dominant in this category, accounting for 79.8 per cent of the total volume, according to Wine & Spirits Wholesalers of America.

Susie Goldspink, head of RTD insights at IWSR, noted in RTDs Strategic Study 2025 that the greatest opportunities for growth lie in markets where RTDs are already established, with Canada being a prime example.

The growing popularity of RTDs is due to several factors, such as their accessibility and portability. Rather than going out to a bar or gathering the supplies and ingredients needed to make a cocktail at home, consumers can simply enjoy a cocktail in a can. RTDs are also versatile and can be served in restaurants and bars or taken away for off-premises consumption. Aside from its convenience, the RTD industry is producing exciting new flavour profiles that continue to captivate consumers.

Nick Devine, the cofounder of Edna’s Non-Alcoholic Cocktail Co., has successfully merged the popularity of RTDs with the rising demand for NA beverages. His brand of NA and RTD cocktails is now sold nationally across Canada and the U.S. While the brand began locally in Vancouver, B.C., Devine says his sales revenue from the U.S. has now surpassed his Canadian sales, thanks to a partnership with Target.

Reflecting on his business’s beginnings, Devine recalls his early efforts to persuade bars and liquor stores to stock his NA cocktails in 2021. He often received confused and incredulous looks from potential buyers, who reminded him that they were in liquor establishments. Since then, the NA space has grown significantly, with more bars and restaurants now catering to NA consumers.

“There is a proper section in their menu now. You rarely saw that five years, 10 years ago, but now, all of a sudden, it is almost commonplace,” said Devine. He believes that Gen Z’s preferences for NA beverages, amplified by social media, have made not drinking mainstream. “All of a sudden it’s cool not to drink, whereas it used to be – almost twenty years ago – you were almost outcast if you said you didn’t drink,” he said.

Devine believes consumers “are coming to the realization that you can still have fun and maintain a fun lifestyle, and social lifestyle, and do it without booze. You aren’t going to have a hangover, but it’s got the body and feel of a proper cocktail, which is kind of what people want. It’s that habit. They don’t want to sit there with a sweetened sugary soda pop. They want a proper drink.”

Challenges of entering the NA and RTD categories

For those thinking of entering the low- and no-alcohol space, a major challenge is creating a beverage that mimics the taste and body of real alcohol. Edna’s Non-Alcoholic Cocktails Co. uses shrubs, concentrated syrups that contain fruit, sugar and vinegar, to mimic the bite of alcohol. They also use specially formulated extracts to add greater complexity to the flavour of their NA cocktails.

Devine’s background as a professional bartender made it easy for him to develop NA cocktail recipes. However, he found the process of adapting bar recipes into shelf-stable canned products to be a steep learning curve and had to enlist the help of a food scientist to finalize his recipes.

Another challenge cited by both Lovenmark-Hay and Devine was the difficulty of finding co-packers for their products. Devine eventually found a suitable co-packer in the neighbouring province of Alberta. Lovenmark-Hay’s search for a co-packer was far more difficult, as her packaging was too unique for most co-packers to handle. Although it would have been far simpler to change her packaging to meet a co-packer’s requirements, she was confident that her unique packaging would help her stand out from other RTD products on the market. This led her to establish her own production facility for Duchess Cocktails, where she now provides co-packing services for other brands as well.

Despite the challenges of developing her NA cocktails, Lovenmark-Hay says she is grateful for the growth of the NA sector. She notes that it has made her brand more accessible, enhanced brand awareness and created more sales opportunities. “We have people that start with our [NA products], then move into our alcohol and vice versa, so that part has been awesome in growing our audience,” said Lovenmark-Hay.

The future of NA beverages

In 2023, the Canadian Centre on Substance Use and Addiction released a report stating that “no amount or kind of alcohol is good for your health” and consuming more than two drinks per week significantly increases the risk of developing several different types of cancer. This news caused many Canadians to seriously re-examine their drinking habits. As Canadians have decreased their alcohol consumption, they have increasingly turned towards NA alternatives. In fact, 62 per cent of consumers stated that they selected foods and beverages with health in mind, according to a report by Ansira.

As a result, the functional food and beverage market is projected to grow by 10.33 per cent to $793.6 billion by 2032. With health and wellness now a consumer priority, a new category of NA drinks has emerged: functional beverages.

Functional beverages are often designed to target a specific wellness goal, such as improving immunity, focus, digestion, or energy. Beverages such as prebiotic and probiotic sodas, vitamin-infused water and beverages with adaptogens are growing in popularity as beverage producers tap into consumers’ desire to use food as medicine. Lovenmark-Hay also thinks that as consumers become more educated, the market will move towards a preference for higher-quality ingredients, less artificial flavouring and colours and more natural products.

Many younger generations are also shifting away from alcohol to cannabis as their go-to recreational substance. This has resulted in the rise of cannabis-infused NA drinks. These beverages offer consumers a discreet and smoke-free alternative to cannabis consumption. In fact, over one in four Americans plan to try these cannabis-infused drinks, with Gen Z and Millenials being particularly interested (Circana).

As consumer preferences continue to evolve at a rapid rate, Devine, Hansen and Lovenmark-Hay all agree that there is much more innovation to come in the NA beverage space, and that they are only just scratching the surface. While trends may come and go, Devine is confident that the NA movement marks a long-term shift in drinking culture.

“This is not going anywhere. This is here to stay, and I think anyone who doesn’t realize that is really missing what is going on out there. This is a movement,” said Devine.

Canadian whisky

Canadian whisky, often referred to as “rye,” has solidified its status as a mainstay in bars and homes around the world, as an at-home sipper over ice, or as a dependable base for crafting cocktails. According to the 2023 IWSR Drinks Market Analysis, whisky made up about 25 per cent of spirits sales in Canada in 2022. During that time, 62 per cent of whisky sales in Canada were Canadian whisky.

The hallmark of Canadian whisky lies in its grain-forward profile. It is a common misconception that Canadian whisky is made solely from rye, when in fact, it can be any combination of corn, rye, wheat or barely.

The range of variables in distillation, aging and blending processes sets Canadian whisky apart from its global counterparts. Unlike Scottish whisky, Canadian whisky uses a diverse assortment of grains and other blending variables, which creates a lighter spirit. The whisky is aged separately in barrels, with some distilleries using unique maturing methods, such as Signal Hill Whisky, which uses new white oak casks for notes of vanilla, caramel and toffee, first-run bourbon casks for flavours of dried raisins and plums, and Canadian whisky casks to draw out the characteristics of the grains. Based on IWSR Drinks Market Analysis, the whisky category is projected to continue growing.

Canadian vodka

Although the origins of vodka trace back to Eastern Europe, Canada has harnessed this spirit and elevated it to a new ranking through a commitment to craftsmanship and quality. Ultra-premium Canadian vodka is known for its subtle flavour, a canvas where cocktail creativity can flourish.

Often, vodka is distilled from corn, wheat, rye or potatoes, but in recent years, Canadian distilleries have been distilling from different raw materials to achieve different flavour profiles without the additives. Crystal Head, for example, has three different expressions of vodka. The Original vodka stems from Canadian corn, resulting in a hint of sweetness and vanilla. Aurora uses wheat, offering a crisp, dry vodka. The newest addition, Onyx, is the first commercially available agave-based vodka, with notes of agave, citrus, green grass and white pepper. Vodka is carefully filtrated, usually using charcoal. However, some brands get creative with other mediums. Crystal Head Vodka’s final filtration is through layers of Herkimer diamonds.

Canada’s abundant natural resources

The rich, fertile soils and natural water sources are at the heart of Canada’s whisky and vodka. The nation’s diverse agricultural regions offer the conditions to yield essential crops, including corn, rye, barley and wheat. A shorter growing season and an extended maturation period allow the grains to gradually develop their flavours. This is different from warmer climates where longer growing seasons and shorter maturation periods create a sweeter flavour.

Canada’s water also plays a role in crafting these spirits. The purity of the water source ensures that vodka comes out as a neutral base, while in the case of whisky, it shapes the fermentation process and can give it a little extra flavour. Signal Hill Whisky and Crystal Head Vodka blend their spirits with water from Newfoundland and Labrador.

Shaping the future

As the spirits industry continues to grow, it is inevitably shaped by emerging trends and innovative practices. Brands adapt to changing consumer preferences and adjust their practices to respect the lands that grow their crop.

The global emphasis on sustainability has guided the spirits industry into action, driving a new era of eco-conscious practices. Some brands are using renewable energy sources, reducing their carbon footprint and championing responsible water management. Meanwhile, some distilleries are focusing on their packaging, opting for eco-friendly materials. With each sip, raise a glass to the remarkable past and the anticipation of what the next chapters of Canadian spirits will unveil. Cheers to the endless possibilities that lie on the horizon!

The importance of strong branding

A strong brand is essential for success in the beverage alcohol market. Branding encompasses everything from the name and logo of the product to the packaging, advertising and promotional materials. A well-crafted brand creates an emotional connection with consumers, making them more likely to choose that product over others. For Bry Simpson, national brand ambassador at Moët Hennessy, an alcohol brand must have a strong brand story if it is to break into the Canadian market.

“Recently, there has been a trend where brands aim to be seen as high-quality from the beginning by sharing a compelling story, usually about a specific person that is a part of their team. They do not focus too much on the place where the product was made, but they are still receiving praise from enthusiasts and making good sales. It is interesting to see how companies are diversifying their products, not by changing how they make them, but by having a unique story to set them apart from their other products,” he said.

The Canadian company Lot 40 is a prime example of a beverage alcohol brand that has successfully differentiated itself through strong branding. Lot 40 is a premium Canadian whisky that has become a household name in Canada, due to its unique flavour profile and distinct packaging. The brand has leveraged its Canadian heritage to create a strong emotional connection with consumers, and its commitment to quality and authenticity has helped to build a loyal following.

In addition, they have diversified their product portfolio to include different types of whisky and limited-edition releases, which have helped to create buzz and excitement among whisky enthusiasts. Its success highlights the importance of branding, marketing and diversification strategies in Canada’s competitive beverage alcohol market.

“We have invested a great deal of time developing the Lot 40 brand to be more than just a great whisky, but also a lifestyle brand that consumers can relate to and connect with on a deeper level,” said Dave Mitton, global ambassador for the brand.

As the beverage alcohol market in Canada becomes increasingly competitive, brands need to differentiate themselves through strong branding, marketing and diversification strategies. One effective branding strategy is to tap into the cultural identity of Canadians, while another is to demonstrate a commitment to sustainability and environmental responsibility, as exemplified by Molson Coors.

Sustainability as a branding strategy

One of Molson Coors’ significant sustainability achievements is the reduction of its water usage in Canada. The company has set ambitious water reduction targets, and through innovative technology and efficient processes, it has reduced water usage by over 22 per cent since 2012. Furthermore, Molson Coors has partnered with local communities and organizations to protect watersheds and promote responsible water usage practices.

The company has also taken steps to reduce its greenhouse gas emissions in Canada. Molson Coors has invested in renewable energy sources, such as wind turbines, solar panels and biomass boilers, to power its breweries.

“At Molson Coors, we are dedicated to constructing a sustainable future and recognize that it is our duty to safeguard the environment and preserve natural resources. We are pleased with the advancements we have made in the areas of sustainable packaging, renewable energy and water conservation. Working with our partners and stakeholders to improve the environment and the communities where we live and work, we will continue to advance sustainability in Canada,” said Frederic Landtmeters, CEO of Molson Coors Canada.

Véronique Gonneville, communication director Canada at Moët Hennessy, also emphasizes the importance of addressing eco-consciousness and ethical production for alcohol brands on the Canadian market.

“We also understand that we also need to do our part to reduce our overall environmental footprint. We have been doing this by eco-designing our packaging and marketing assets within an overall circular economy strategy, opting for low-carbon transportation, improving energy efficiency, accelerating the roll-out of renewable energies across our maisons, and reducing and recycling our waste. Most importantly, we involve our suppliers and partners at every phase of the value chain, from grapes and crops to communication and client consumption,” said Gonneville.

Tapping into cultural identity

Another successful branding strategy in the beverage alcohol industry is to tap into the cultural identity of Canadians. Brands that celebrate Canada’s heritage, landscapes and local ingredients have been able to differentiate themselves and create a sense of pride among Canadian consumers. For example, Moosehead Breweries leveraged its status as the oldest independent brewery in Canada and its use of local ingredients in its beers to create a strong brand identity that resonates with Canadian consumers.

The importance of marketing

In addition to branding, marketing is also crucial for success in the beverage alcohol market. One effective marketing strategy is to engage with consumers through social media and influencer partnerships. Social media platforms such as Instagram and Twitter provide a stage for brands to showcase their products and connect with consumers in a personal and interactive way. Influencer partnerships, in which brands collaborate with popular social media personalities to promote their products, can also be effective for reaching a wide audience.

For Maria Sutton, group marketing manager at Campari Canada, which owns various Canadian spirits brands including Forty Creek and Ungava Gin, keeping up with social media trends is crucial.

“I always use social media as my culture thermostat, people are hyper-connected and never shy to share their opinions. On top of that, I have access to a lot of industry and market research, and I try to stay up to date at least with the newsletters of top insight outlets like WARC, IWSR, Mintel, etc.

No matter the agenda of the day, I make sure to dedicate the first 30 minutes of my day to read the news, industry headlines, and at least two or three industry articles. I find this exercise a good routine to stay up to date with the world and trends,” she said.

Hosting events and experiential activities is also an important step to follow for brands that care about keeping their buzz going. Unique and memorable experiences can create a sense of excitement and buzz around their products. For example, in 2019, Absolut Vodka launched a pop-up bar in Toronto that used facial recognition technology to recommend cocktails based on the customer’s mood. This innovative experience generated significant media attention and helped to build the brand’s reputation as a leader in innovation and technology.

Expanding product portfolios

In addition to branding and marketing, diversifying product portfolios has become an increasingly important strategy for beverage alcohol brands in Canada. Diversification involves expanding the range of products offered to include different types of beverages, flavours and packaging formats to appeal to a wider range of consumers.

One trend in Canada’s beverage alcohol industry is the rise of hard seltzers, which are low-calorie, flavoured alcoholic beverages that have gained popularity in recent years, particularly among younger consumers. Brands such as White Claw and Truly have become household names in the United States, and Canadian brands are starting to follow suit. For example, in 2020, Molson Coors launched Vizzy, a hard seltzer brand that uses real fruit juice and antioxidant vitamin C to appeal to health-conscious consumers.

Jazzing up product portfolios to appeal to a broader range of consumers, has been a successful brand diversification strategy. It is essential for companies to keep up with changing consumer preferences, emerging trends and new technologies to remain competitive. The beverage alcohol industry has witnessed significant changes in recent years and companies that can leverage these shifts to their advantage can create new opportunities for growth.

The beverage alcohol industry is dynamic and constantly evolving, and companies that can adapt, innovate and prioritize sustainability will be the ones that succeed.

“What we found through our research was the last two years were really a market correction after the high growth rates of alcohol consumption during the early days of the pandemic,” said Ryan Lee, a market analyst with IWSR. “Overall personal alcohol consumption is expected to remain above pre-pandemic levels into 2023, although less than those seen during the pandemic.”

Moreover, consumer habits developed during the pandemic have remained intact, even as more people venture to restaurants and bars.

“Many consumers purchased premium products during the height of the pandemic. So, it could entice them to spend more when they’re out,” said Lee. “At the same time, as the recession continues to impact Canadians’ financial situations, it could slow premiumization trends too.” Lee says the latest findings from consumer research in February 2023 show that Canadian drinkers are reducing their stated alcohol consumption and spending, though this is nuanced by specific category. “This change in behaviour has a lot to do with growing feelings of insecurity and apprehension, especially among younger adults,” he said.

IWSR insight shows that while drinking at bars and restaurants may see a decline, purchasing alcohol from liquor stores, in particular premium liquor, may remain steady or even increase. Lee says diversifying product selection can help navigate these uncertain times, but paying attention to consumer behaviour will help beverage alcohol producers focus on which brands to invest in. Here are three consumer insights to help navigate the 2023 landscape.

Any occasion to clink

While the total wine category is declining in volume, IWSR shows that sparkling wine continues to grow in Canada. “There’s a pent-up demand to celebrate weddings, holidays, gatherings and other personal milestones after the pandemic restrictions,” said Lee. “A key driver here is a change in attitude from these beverages being exclusively for formal events or special occasions. Now, people are enjoying Champagne and Prosecco in more relaxed contexts, and more frequently.”

The analysis shows strong demand from Canada’s southern neighbour, as premium and above sparkling wine grew in volume by eight per cent between 2019 and 2020 in the United States.

“People got used to working with premium products during the lockdown,” said Lee. “Higher-quality products mean higher expectations, and two effects of the pandemic on the alcohol market are expected to remain the same over the long term – higher e-commerce engagement and at-home cocktail culture – and drive spirit consumption.”

Protecting their body and wallet

Lee says health and wellness are on a lot of peoples’ minds. “In a recent IWSR survey, we discovered that around half of the adults we surveyed were more interested in moderating their alcohol consumption,” said Lee. “And younger adult consumers, like millennials and generation Z, are much more likely to moderate their drinking habits than older generations.”

Unlike the first insight, where some consumers opted for more premium beverages, others are turning to non-alcoholic ones. “Molson Coors Beverage Company, formerly Molson Coors, changed the longstanding company name to represent a shift toward a wider beverage portfolio outside of just beer,” said Lee. “The company has also invested in non-alcoholic beverage categories such as Zoa Energy, an energy drink created by a team that includes Dwayne Johnson, and VYNE, a botanical hop-infused sparkling water.”

IWSR found that beverages with no alcohol grew by nine per cent in 2022, increasing their volume share of the overall no- or low-alcohol space from 65 per cent in 2018 to 70 per cent across 10 key markets, including Canada and the U.S. “No-alcohol is growing faster than low-alcohol in most markets,” said Lee. “It has a lot to do with improved taste, production techniques and a diversification of consumption occasions.”

IWSR expects no-alcohol volumes to grow at a compound rate annually by nine per cent between 2022 and 2026 across key markets (including Canada, and the U.S.).

Spirit-based RTDs

Lee says in total volume terms in 2021, every major category except ready-to-drink (RTD) across all alcohol bases posted negative growth in Canada. However, it’s not the traditional hard seltzers he’s referring to in this instance. “Premium-priced RTDs have grown faster than any other segment over the past two years,” said Lee. “On a smaller volume base, but at increasingly higher prices.”

IWSR reports that consumers in some markets trade up to RTDs from categories like beer. In some cases, consumers pay roughly double for the same serving size of RTD as beer. Findings from IWSR show that across 10 key markets, spirit-based RTDs – especially those made with vodka – held 45 per cent of the volume share of the RTD category in 2021, driving most of the beverage industry’s innovation.

“With the RTD category firmly established in markets such as the U.S., and competition at an all-time high, brand owners continue to focus on innovative products and brand extensions or partnerships to drive greater awareness and distribution. The RTD innovation IWSR is tracking year-on-year clearly shows a rapid pace of product transformation to meet consumer demand,” said Lee. “There is no single dominant type of RTD globally, which makes the category uniquely positioned to capitalize on local tastes and trends.”

Diversifying a brand

With such an extensive array of directions, Lee says it’s never been more important for companies to review their portfolio and determine where gaps exist in consumer demand and opportunity. “Many brands across beverage alcohol are diversifying their portfolio to engage and take a share in high growth categories,” said Lee. “Diversifying also allows producers to reach a wider consumer demographic and maintain a portfolio to meet evolving consumer demands.”

Even traditional, non-alcoholic brands are moving into the market. “The Coca-Cola Company launched Topo Chico hard seltzer in partnership with Molson,” said Lee. “But the company’s first alcoholic product was a chuhai, which is a type of RTD called Lemon-Dou, that launched in Japan in 2018.”

One thing to remember, says Lee, is that companies are no longer selling products to groups of consumers. “Companies are now selling products that fit a variety of consumer occasions,” he said.

According to data released by global beverage analysis group, IWSR Drinks Market Analysis, the value of no- and low-alcohol category topped $11 billion in 2022 in the 10 key global markets it analyzed (including Canada). The pace of growth is expected to gain speed with the market analysis firm forecasting a volume compound annual growth rate of over seven per cent through 2026, compared to five per cent from 2018 to 2022.

For Canadian wineries that are active or diversifying into the low- and no-alcohol market segment, there is a keen sense of pride. There is pride in producing distinct Canadian wines in a space traditionally dominated by imported wine. There is also pride in the rich connection to place in wine regions where the climate and terroir naturally give rise to lower-sugar grapes, and thereby lower-alcohol wines.

The reasons for this foray are many, but one thing is certain: the consumer is top of mind. Some Canadian wineries see it as part of a commitment to diversity and inclusion, others are conscious of consumers who have specific wellness goals. Ensuring these low- and no-alcohol offerings are also great-tasting products that consumers will savour is undoubtedly a labour of love for Canadian winemakers.

Nova Scotia-based winery Benjamin Bridge has produced low-alcohol wine for some time in the form of its Tidal Bay (around 10% ABV) and Nova 7 (around 6.5% ABV) wines. Tidal Bay is Nova Scotia’s first appellation, characterizing an aromatic white wine, blended from only specific varietals. To obtain the Tidal Bay designation, a wine must have an alcohol content of no more than 11% ABV.

Benjamin Bridge’s head winemaker, Jean-Benoit Deslauriers, says the recent diversification of their low- and no-alcohol product offering into piquettes was a natural follow-on from their experience with Tidal Bay and Nova 7, coupled with their commitment to showcasing the fruit of their unique micro-climate to consumers. Deslauriers says the winery’s goal is to “create extraordinary sensory experiences connected to place.”

Piquette is a lightly effervescent wine made from the refermentation of grape pomace, which makes it naturally low in alcohol. The Nova Scotia winery has added a half-dozen piquettes to its low-alcohol product offering, all at 5% ABV, as well as their piquette zero, at 0% ABV.

Another winery that has diversified into the low-alcohol market is Niagara-based Diamond Estates Wines & Spirits. Diamond released a new 8% ABV range of wines in May 2022, called Mindful. In addition to their current range of two Mindful wines – a Pinot Grigio and a rosé – they will soon launch a third, Mindful Sparkling. The only low-alcohol low-sugar wine that is VQA-certified at the LCBO, Diamond works with their growers to ensure the grapes that go into Mindful are harvested early, so they are naturally lower in sugar and thereby lower in alcohol. While the new year can kick-start conversations around resolutions, or a Dry or Damp January, the winery says sales have grown steadily throughout the year.

Whether through a cool micro-climate, early harvest, de-alcoholization or experimentation with a secondary pressing, Canadian wineries are certainly stepping into the exciting low- and no-alcohol segment of the wine market. With other wineries – including British Columbia-based Haywire Winery – making inroads in the low-alcohol space, it is only a matter of time before consumers see an ever-increasing range of Canadian wine offerings in the low- and no-alcohol space.