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Michael Scott

Michael Scott

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Michael Scott majored in International Business at San Francisco State University and University of Economics, Prague. He is now working as a news editor for…

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Investors Are Betting Big On Boozeless Bars

Boozeless Bars

Investors are betting a younger generation that doesn’t prize alcohol to the same extent as their forebears have and it’s leading to everything from booze-free bars and alcohol-replacement startups to major shifts in production from the biggest beer manufacturers. That the skeptics abound here is fair enough. After all, the total volume of alcohol consumed per year globally managed to increase by up to 70 percent between 1990 and 2017, according to a study published in  The Lancet, which notes that the world drank 35,676 million liters of alcohol in 2017.

Skeptics will also be forgiven for noting the obvious: We already have plenty of non-alcoholic beverages, precisely defined as beverages without any alcohol. Do we really need more?

The optimists, however, are convinced that the world wishes to live a healthier lifestyle, and today’s younger generations are increasingly choosing not to drink alcohol.

That has, against all odds, given rise to New York City’s first booze-free bar, called Getaway, which claims to recognize the importance of alcohol in the socializing equation. In the bar setting, of course, alcohol defines the process of socialization. But the man behind Getaway insists that it need not be that way.

"At a bar, you can sit there and chat with the bartender, chat with the person next to you. It’s a social place; the alcohol almost seems secondary,” says Sam Thonis, the Getaway owner who gave up a career in video production to pursue his booze-free vision. “We are just offering something that I think people want: a social experience without the alcohol.

Investors seem to be jumping on board as well.

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Ben Branson, founder of Seedlip, the world’s first non-alcoholic 'drink', has his own version of “grown-up” alcohol through Distill Ventures (DV) a venture capital accelerator funded by liquor giant Diageo. “Ben and I bonded over the idea that we didn’t think anyone needed to be apologizing [for not drinking,]” Shilen Patel, DV co-founder, told Time magazine. “We refused to compromise.”

But the bigger story here is in the major beverage producers who have latched on to non-alcoholic beer in a fairly impressive way.

Heineken, the world’s second-largest beer maker after Budweiser-owner AB InBev, enjoyed its  best performance in more than a decade in 2018. It sold 7.7% more beer, partly thanks to demand for its booze-free Heineken--the 0.0% alcohol variety.

“People are more conscious about what they’re putting in their body,” Vox quoted Ashleigh Phelps, brand manager for Heineken in the U.S., as saying. “We wanted to create a [zero-proof] beer where people felt comfortable waking up the next day and going to yoga or a spin class or parenting their kids. The insight is really health and well-being.”

If this 2018 Nielsen data is anything to go by, the numbers boost the theory that love of alcohol is waning, possibly in favor of a healthier lifestyle. Overall, this data shows slowing sales growth across alcohol categories:

(Click to enlarge)

Source: Nielsen data

Taking its place to some extent, indeed, is a major trend in health that has created a $4.2 trillion wellness industry. And non-alcoholic drinks are a decent--and growing--part of that.

Bon Appétit estimates that the market for low- or no-alcohol beverages could grow by almost a third in just the next three years.

What it all seems to say is that habits themselves don’t have to change, but the elements of those habits can--much like vaping is overtaking cigarettes.

By Michael Scott for Safehaven.com

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