Functional formulations find a place in the nonalcoholic beverage market

If anybody was using the term “sober curious” in 2011, they certainly weren’t sharing it with the team launching the adaptogen-enhanced Tranquini drink. A dozen years later, however, the nonalcoholic phenomenon is at the center of the functional beverage’s marketing strategy.

A year ago, Tranquini ran a test campaign in which people who didn’t drink alcohol for the month were entered into a drawing to win $1,000. “That contest absolutely crushed it,” says Bret Caretsky, chief marketing officer for Innovium, makers of Tranquini and other functional beverages. The adult nonalcoholic beverage category started booming in the early 2020s, and Tranquini wasn’t about to miss out on a party it was so many years early for, he explains.

“There is a lot of crossover between herbal adaptogens and the nonalcoholic movement. From an evolution perspective, there seems to be enough crossover there, where we can kind of play on both ends of those messages,” Caretsky says.

Adult nonalcoholic beverages—some that try to mimic the taste experience of alcohol and others that are offered up as RTD mocktails—have the market momentum to not only claim their own aisle at Natural Products Expo East but to generate enough brands to stock zero-proof bottle shops. And while some products are branded as alcohol analogs—are you ready for your nojito?—others are setting themselves apart as refined taste experiences without a direct parallel behind the bar.

Related:In the Aisle: Non-alcoholic beverages satisfy adult consumers

A distilled spirit echoing but entirely independent of traditional spirits is what Aplós CEO David Fudge says his team was going after when they concocted the “Aplós duo” of the brand’s Calme and Arise beverages, both in bottles that could easily be mistaken for a fine cognac.

“We’re trying to replicate the sophistication and complexity and versatility of a traditional spirit, but the liquid flavors are unique,” Fudge says. That experience was never meant to end at the tongue, he insists. Adaptogens and other functional ingredients provide a benefit that goes beyond the “non-alc” novelty. “I strongly believe that you need a differentiator that is more compelling than just selling a non-alc version of a traditional spirit.”

Of faux and function

For Aplós and other brands riding the sobriety wave, the differentiator is often functional. The mission of the Non-Alcoholic Adult Beverage Association is built around a flavor and not functional experience, but brands that straddle the line between function and liquor-like presentation promise benefits if not buzz with their offerings.

Related:How to merchandise non-alcoholic beverages

Aplós Calme is infused with hemp to settle the mood. Calme’s sister product, Arise, is infused with adaptogens for “moments of revelry.” “We start with, ‘OK, what is the occasion for our spirit and what would our consumer want from a functional effect on that occasion?’” Fudge explains.

To deliver on that functional promise, Aplós is deploying Suntheanine from Ethical Botanicals and a branded ingredient form of moringa. Aisha Chottani’s formulation for her Moment “Drink Your Meditation” canned beverage includes Sensoril ashwagandha from Kerry Group.

Chotanni, who launched her brand in 2020, says she worries about fairy-dusting in beverages, whether they are marketed directly to the nonalcohol category or are simply being embraced by the sober community. People who don’t get the expected benefits might walk away from the category, she says. That makes nailing the efficacy a strategic matter. “Brands that are just putting ingredients in for the sake of being fancy are going to sell it one time, but this is a long-term game, right? It’s very competitive,” she says.

Moment isn’t as NA-forward as Aplós or Tranquini, but Chotanni says she is being embraced by the sober and sober curious. “We started in 2020, and between 2020 and 2022, the tide completely turned and the non-alc movement has blown up.” There was a time, she contends, “when people were thinking about non-alc, they weren’t thinking about a holistically healthy product. It was just, ‘let’s replace alcohol with sugar.’”

That time is over for many, she insists.

“There’s a lot out there, and some of them taste good. But the functionality and the lack of sugar is what keeps people coming back to us.”

Taking out and putting in

Conor Godfrey’s Rasāvāda could easily be mistaken for a traditional spirits brand and not the “restorative spirits” Godfrey invented in his kitchen. Presented in dark glass bottles with elegant fonts and product names like Rose Bergamot, Rasāvāda would not look out of place on a shelf in a high-end liquor store. But the “restorative” part is the brand’s most important component, Godfrey says.

An emphasis on ingredients is the proof of that, he explains.

Godfrey does not utilize branded ingredients and instead focuses on “straight-up plant herbs” of the highest quality, he says. “Nothing is chemically processed. No preservatives are used. The unprocessed herbs fits with the craft spirit’s promise. There’s nothing else in our products. We believe that’s the future.”

The point of the product, he says, is those herbs. Godfrey conceived of Rasāvāda when he was experiencing a difficult time in his life that he describes as a personal “inflection point.” He dove into herbalism and set out to share the benefits he discovered. The nonalcoholic aspect is secondary.

“When we first launched, we focused on being a nonalcoholic spirit, but now it’s much more focused on how we can help people on their life’s journey.”

Godfrey took a pass on branded ingredients, but other emerging beverage brands are focusing on the tweaked herbs for efficacy, says Angela Getzel, business development director for beverage at Kerry. People want more than a taste experience; they want the type of calming experience they might otherwise look to beer or wine to find, she says. “That’s how people are looking at it. It’s ‘I want something to take the edge off the day.’”

Getzel believes consumers will look for products that give them that experience, and Kerry is looking to work with the brands committed to delivering it. “There is a lot of fairy-dusting out there because it’s expensive to add a lot of functional ingredients, and with the nutritional facts panel, you can’t make a hard claim,” Getzel says. “So, because you can’t make the hard claim, people aren’t putting in enough to even get the results.”

Because these are beverages, there are also taste challenges around herbal ingredients, branded or not. Kerry sells sweeteners designed to mask bitter notes in addition to formulas that mimic the taste and mouth feel of alcoholic beverages. Ingredient makers with deep expertise, like Kerry, will have an advantage as the market expands and competition rises, she says. “I would say that, in the last two years, it has really gone up,” Getzel says of the market, “to the point where you’re at places like BevNET and you see an entire tasting table of all different products that are all in that space. Every one of them had benefits.”

Market momentum

Beyond Brands founder Eric Schnell also noted the array of nonalcohol beverages at BevNET and says it’s part of what tells him the category “100% has legs.” His confidence is also rooted in generational trends. “I don’t think it’s going to slow down anytime soon because this next young generation who’s sober curious, or is also fine not having any alcohol in their life, is definitely open to herbs and functional ingredients to give them that effect you would get from a typical spirit—maybe not the drunk effect, but the mood-elevation effect.”

Schnell points to Three Spirits as a brand he’s been watching and says the mood effects are crucial. “You can drink a glass of that on ice versus drinking a glass of a real spirit. You definitely feel something, without the drunk side. You just kind of feel better.”

Branded ingredients are likely to be crucial to the most successful brands, Schnell says. “If I were formulating a drink like this for clients of ours at Beyond Brands, I would tend to go with at least a branded patented ingredient or two so that I guarantee the functional effect. If you’re going to spend $10 to $15 for a bottle, it’s nice to have a nice taste from the herbs, but I think the consumer wants to get some kind of mood boost.”

Beyond the mood effects, presentation is a primary selling point. Without the liquor-like packaging, Schnell isn’t sure the nonalcohol category would be booming the way it is. The liquor-like bottles convey an exclusiveness and sophistication, he explains.

Fudge was certainly looking for that sophisticated appeal when he brought Aplós into being. A “reluctant” drinker, Fudge says he often felt “like I was being sentenced to the kids table.” Aplós is never going to be mistaken for a juice box. “I wanted something that was really elevated and had a craft quality to it.”

As the category grows, he says, that sophistication will be crucial. If nonalcoholic adult beverages are going to be more than a passing novelty, the products need to look, taste and feel adult while delivering a mood experience.

“Our vision is to reinvent and help create the bar of the future,” he says, “and we believe the bar in five or 10 years is going to look very different than it does today.”

This article first appeared in the Emerging Markets issue of Nutrition Business Journal. For more insights, subscribe today.