Europe’s beverage market is undergoing a structural reset as a new generation of consumers turns away from alcohol in favour of innovative, healthier alternatives.
New analysis released today by Circana at the Beverage Forum Europe 2025, taking place in London, shows that 71% of consumers are buying, stocking, or consuming less alcohol, and almost one in four 25–35-year-olds have stopped buying alcohol altogether
The total European beverages category has reached a value of €166bn, accounting for nearly a quarter (23%) of all edible CPG demand across the largest European markets (France, Germany, Italy, Netherlands, Spain, UK).
While overall sales value grew 2.1% and volume rose 0.6% year-on-year, the real story is one of divergence: alcoholic beverages slipped 1.8% in value sales to €68bn, while non-alcoholic beverages grew 5.1% to €97bn. With soft drinks, functional blends, and no/low alcohol choices now accounting for almost 60% of category sales, Circana notes that future growth is firmly in the hands of non-alcoholic innovation.
Consumers cite being ‘more refreshing’ (55%), ‘healthier with plant-based ingredients’ and ‘tasting better’ (27%), ‘better for me’ (22%) and ‘fits my lifestyle (21%) as the main reasons for switching from alcohol to alternatives such as functional drinks, protein-based beverages, kombucha, and mood-enhancing no/low-alcohol options.
“The message to brands is clear; ‘more of the same’ is no longer a growth strategy,” said Ananda Roy, SVP Thought Leadership at Circana.
“Growth will not come from short-term disruption but from strategic reinvention. As new consumers, needs, and occasions reshape the market, category leadership will belong to those who strengthen their capabilities, innovating with purpose, embedding sustainability, and engaging shoppers in credible and lasting ways.”
Key takeaways from the Circana report:
- New consumers, new occasions – Changing lifestyles and rituals are redefining the meaning of beverages, demanding that brands adapt portfolios to evolving consumption patterns.
- Growth in adjacencies – Categories outside of traditional alcohol are accelerating and will increasingly impact the wine and spirits sector by 2035, highlighting the need for cross-category innovation.
- Sustainability as a growth driver – No longer just a compliance issue, sustainability is now a commercial opportunity, but one constrained by availability and affordability. Brands that can deliver on both will gain a competitive edge.
- Innovation with purpose – True reinvention in product design, pricing, distribution, and consumer engagement, not short-term promotions, is what will make wine and spirits relevant and desirable again.
- Moderation reshaping demand – The rise of low/no alcohol reflects a structural shift toward moderation and under-consumption. While this will change category demand by 2045, brand heritage and craftsmanship remain powerful assets.
NAM Implications:
- This says it all:
- ‘soft drinks, functional blends, and no/low alcohol choices account for almost 60% of category sales’
- Coupled with the likelihood of cash-strapped governments traditionally turning to alcohol taxes as a source of revenue…
- …means real growth has to come via non-alcohol innovation.
- (With little real alternative)
