Dry January: How a Month of Sobriety Became a Billion-Dollar Opportunity

Every January, millions of people around the world pledge to give up alcohol for the entire month. What started as a small public health campaign in the UK has rapidly grown into a global cultural phenomenon. But "Dry January" isn‘t just a challenge for those who participate. It‘s also a major event for the beverage industry – one that highlights the massive potential of the fast-growing non-alcoholic drinks market.

The Extraordinary Rise of Dry January

The idea behind Dry January is simple: encourage people to abstain from alcohol for the first month of the year as a way to reset their drinking habits and improve their health. Alcohol Change UK, the charity that launched the first official Dry January campaign in 2013, describes it as "our chance to ditch the hangover, reduce the waistline, and save some serious money by giving up alcohol for 31 days."

At first, participation was modest – a reported 4,000 people took part in the initial campaign. But the movement quickly caught on. Participation in Dry January has more than doubled each year since 2015, reaching over 4 million people in the UK in 2020 and over 6.5 million in 2021. In 2022, a record 7.9 million UK adults participated, or about 19% of the adult population that drinks alcohol.

Dry January UK participation
Dry January UK participation has more than doubled each year since 2015. Source: Alcohol Change UK

The trend has also spread far beyond the UK. In the US, 15% of adults participated in Dry January in 2021, up from 10% the previous year, according to a survey by Morning Consult. That equates to roughly 30 million American adults. Significant participation has also been reported in Canada, Australia, France, and other countries.

So why has this one-month sobriety challenge exploded in popularity so quickly? A few key factors are driving the growing interest in Dry January and mindful drinking in general:

Health Consciousness: More people are looking to reduce their alcohol intake as part of a healthy lifestyle. Over 1 in 5 Americans are actively trying to drink less, according to Nielsen data. Dry January provides a motivated and supportive environment to experiment with drinking less or not at all.

Wellness Priorities: In the wake of the COVID-19 pandemic, many people are placing a higher priority on their physical and mental well-being. Reducing alcohol consumption is increasingly seen as an important part of self-care. A 2021 survey found 79% of Dry January participants said they saved money, 62% slept better, and 49% lost weight.

Sober Curiosity: Younger generations are drinking less alcohol than older cohorts did at their age. The share of college students who drink alcohol has fallen from 82% in 2000 to 64% in 2021, according to Monitoring the Future. Many young people are "sober curious" and regularly seeking out alcohol-free options as part of their social lives.

Social Sharing: The rise of social media has made it easier than ever to discover and participate in month-long challenges like Dry January. People proudly share their Dry January intentions and progress, creating a sense of community, accountability, and momentum. In January 2022, there were over 60,000 #DryJanuary Instagram posts and 90,000 Tweets.

The Dry January Effect on Alcohol Sales

With millions of people cutting out alcohol for an entire month, one might think Dry January is terrible news for the beverage alcohol industry. After all, January has always been a slow period for alcohol sales even before the Dry January boom. Many consumers take a break from drinking after the excess of the holidays, and the cold weather keeps more people at home. In the US, January typically sees the lowest monthly alcohol sales of the year.

The rise of Dry January has undoubtedly exacerbated the January slump for alcohol brands. An analysis by Nielsen found that US off-premise alcohol sales were down 6.7% in January 2022 compared to the previous January. Beer sales were hit particularly hard, down 11.5% year-over-year. In the UK, the Dry January effect is even more pronounced: alcohol sales fell by 20% in January 2022 compared to the previous year, according to data from Kantar Worldpanel.

January alcohol sales decline
US off-premise alcohol sales decline in January 2022 vs. January 2021. Source: NielsenIQ

However, the full story is more nuanced. While Dry January clearly puts a short-term dent in alcohol sales, the long-term impact is less clear. In fact, some evidence suggests that Dry January could actually be good for the beverage industry in a few key ways:

Boosting February Sales: Many Dry January participants report that they celebrate completing the challenge by treating themselves to a nice bottle of wine or a cocktail out with friends. This "rebound effect" can give a boost to alcohol sales in February. One UK retailer reported a 40% increase in sparkling wine sales in February after a slow January.

Encouraging Moderation and Premiumization: For many people, the goal of Dry January is not to quit drinking entirely, but to become more mindful and cut back on excess. After experimenting with sobriety, many people end up moderating their alcohol intake longer-term and focusing on quality over quantity when they do drink. This aligns with the growing premiumization trend in the alcohol industry.

Providing a Gateway to Non-Alcoholic Options: Perhaps most importantly, Dry January introduces millions of people to the rapidly expanding world of non-alcoholic beverages. For consumers taking a break from alcohol, discovering a satisfying alcohol-free alternative can be a revelation. Many end up permanently integrating these products into their lifestyles. As Laura Willoughby MBE, co-founder of mindful drinking community Club Soda, puts it: "Dry January is a perfect introduction to the world of non-alcoholic drinks and can really help embed lasting change."

Non-Alcoholic Drinks: The $30 Billion Opportunity

While Dry January may bring a temporary lull for alcoholic beverage sales, it highlights the massive business opportunity in non-alcoholic drinks. Consumers abstaining from alcohol for a month still want to enjoy the taste and experience of their favorite cocktails, beers, and wines – just without the booze. Increasingly, they have an array of sophisticated alcohol-free options to choose from.

The global non-alcoholic drinks market was valued at $923 million in 2020, according to Fior Markets, and is projected to reach $1.7 trillion by 2028. In the US, NielsenIQ reports that off-premise sales of non-alcoholic beverages grew 33.2% in 2021, significantly outpacing the 9.5% growth in alcoholic beverage sales.

non-alcoholic beverage growth
Non-alcoholic beverage sales growth outpaces alcoholic beverage growth. Source: NielsenIQ

Globally, the non-alcoholic drinks market is projected to grow at a CAGR of 7.6% from 2022 to 2030, according to Grandview Research. Much of this growth is coming from the "high end" of the market: premium non-alcoholic spirits, craft non-alcoholic beers, and alcohol-removed wines. These upscale offerings are a far cry from the syrupy "virgin" drinks of the past. Many are designed to closely mimic the taste, aroma, and mouthfeel of their alcoholic counterparts using cutting-edge flavor and extraction technology.

Part of the appeal of these premium non-alcoholic drinks is their perceived health benefits. Consumers are increasingly looking for functional beverages that offer nutritional or wellness advantages. Many alcohol-free alternatives contain adaptogens, nootropics, and other trendy wellness ingredients. For example, Kin Euphorics markets its alcohol-free cocktails as "brain care" that "elevate mood, boost brain power, and promote longevity."

Major beverage alcohol companies have taken note of this fast-growing market and are rapidly expanding their non-alcoholic offerings:

  • AB InBev, the world‘s largest brewer, expects to make 20% of its global beer volume non-alcoholic by 2025. Its popular non-alcoholic beers include Budweiser Zero and Hoegaarden 0.0.

  • Heineken launched its 0.0 alcohol-free lager in the US market in 2020 and saw double-digit growth. It recently debuted Heineken 0.0 Draught, an alcohol-free draught beer now available in 7,000 bars and restaurants across Europe.

  • Diageo, the largest spirits company in the world, acquired premium non-alcoholic spirit Seedlip in 2019. It also launched zero-alcohol variants of Gordon‘s Gin and Tanqueray.

  • Pernod Ricard debuted its Celtic Soul non-alcoholic dark spirit in 2022. Celtic Soul mimics Irish whiskey and can be served neat, on the rocks, or in a variety of zero-proof cocktails.

As Mark Meek, CEO of industry group IWSR Drinks Market Analysis, told the Wall Street Journal: "No- and low-alcohol serves are rapidly becoming more of a staple than a trend."

Strategies for Success in the Non-Alcoholic Category

For beverage alcohol brands, the rise of Dry January and the booming demand for alcohol-free options represents both a risk and an opportunity. To stay ahead of changing consumer preferences and capture the growing non-alcoholic market, here are a few key strategies to consider:

1. Promote Non-Alcoholic Offerings During Dry January and Beyond

While non-alcoholic beverages should be available year-round, Dry January is a key moment to attract new customers to the category and promote your offerings. Many bars and restaurants create special Dry January menus featuring alcohol-free cocktails and mocktails. Retailers often highlight their non-alcoholic selections with dedicated shelf space and promotions.

Heineken encouraged beer drinkers to "Join the Dry January Challenge" by giving away 15,000 free 31-packs of Heineken 0.0 to help them complete a month of alcohol-free drinking. The promotion not only supported participants‘ Dry January goals, but introduced many to Heineken‘s popular alcohol-free beer.

2. Focus on Taste, Variety, and the Drinking Experience

One of the biggest barriers to consumer adoption of non-alcoholic drinks is the perception that they don‘t taste as good as "the real thing." Brands must focus on creating alcohol-free products that provide a truly satisfying sensory experience, with sophisticated flavors, aromas, and mouthfeel that can stand up to their alcoholic counterparts.

Offering a variety of non-alcoholic styles and flavor profiles is also key. Just as consumers expect a range of options for beer, wine, and cocktails, they want to be able to explore and discover different alcohol-free alternatives for different occasions and taste preferences.

On-premise, the presentation and service of alcohol-free drinks should be given just as much care and attention as alcoholic ones. Glassware, garnishes, and the theater of preparation all contribute to the drinking experience.

3. Premiumize with Quality Ingredients, Process and Packaging

While cost remains a barrier for some non-alcoholic beverages, many consumers are willing to pay a premium for high-quality, artisanal products. Brands can justify higher price points for non-alcoholic drinks by emphasizing their quality ingredients, innovative production methods, and upscale packaging.

For example, Seedlip positions itself as a luxury product, with sleek packaging, premium pricing, and placement in high-end bars and retailers. The brand describes its Spice 94 expression as "a complex blend of aromatic, Jamaican Allspice berry and Cardamom distillates with two barks and a bright citrus peel finish."

4. Connect to the Wellness and Self-Care Trends

Many consumers are choosing non-alcoholic options as part of a wellness-oriented lifestyle. Brands should consider highlighting the health-related attributes of their alcohol-free offerings, such as low calorie counts, natural ingredients, and functional benefits.

Athletic Brewing, a fast-growing craft non-alcoholic beer brand, has built its brand around "Brews Without Compromise" that allow drinkers to celebrate the active, healthy lifestyle they want to live. Its beers are all under 100 calories and positioned as a healthier alternative to sugary sports drinks.

Some non-alcoholic spirit brands are leaning into "psychosomatic" benefits, with ingredients like hemp, damiana, and ashwagandha that are said to lift mood and relieve stress. Brands like Kin, Three Spirit, and Curious Elixirs are aligning themselves with the self-care trend and marketing their products as "euphorics."

5. Integrate into the Full Brand Experience

Perhaps most importantly, non-alcoholic offerings should not be treated as an afterthought or niche category, but fully integrated into the overall brand experience. In both on-premise and retail environments, alcohol-free options should be given equal prominence and visibility. They should also be seamlessly incorporated into brand activations, sponsorships, and communications.

Diageo has added non-alcoholic versions of several of its key brands, including Guinness 0.0 and Tanqueray 0.0% ABV. These line extensions sit alongside their alcoholic counterparts on bar menus and retail shelves, making them a natural additional choice for the brand‘s existing customers.