Not Quite Soda, Not Quite Alcohol: A New Boozeless Booze Is Finding Its Fit

On Sunset Boulevard, scattered among Parachute Home, Dr. Martens and a slew of other Instagram-able boutiques and coffee shops is Soft Spirits, Los Angeles’s first nonalcoholic bottle shop.

You wouldn’t know it doesn’t sell alcohol by entering the store. Rows of whiskeys, gins and wines in apothecary-like glass bottles line the walls. If you didn’t bother to peer at the labels, which often say “zero-proof” or “non-alcoholic” in small font, none of these bottles would seem out of place at a liquor store.

The store is tapping into a new kind of 21-and-up consumer: often young, these “sober curious” or “mindful drinking” customers are experimenting less with the hard stuff.

Venture firms have taken notice: In 2022, budding nonalcoholic beverage startups received a record of over $414 million in venture funding as a crowd of millennials and Gen-Z folks are spending less on alcohol.

Celebrities Katy Perry, Blake Lively and Bella Hadid have all founded companies that create low-sugar, botanical-packed nonalcoholic aperitifs.

“We get a lot of people asking, ‘Who is this for?’” said Jillian Barkley, founder of Soft Spirits. “That’s a really interesting question because our demographic so far is a little bit undefinable.”

Pandemic-era buzz around nonalcoholic booze

There was once a time when rejecting a glass of wine or nursing a cup of water came with certain assumptions: Either you were pregnant, recovering from addiction or just  staunchly sober. Options for those nonimbibing adults ranged from water to sugar-packed mocktails.

That began to change during the pandemic. As bars and clubs shuttered, online purchases of nonalcoholic beverages spiked.

From nonalcoholic to cannabis infused

After years of drinking, friends Jake Bullock and Luke Anderson decided they were tired of alcohol — the morning hangovers, the regret and the overall toll on their livers were enough.

“What was hard was that so much of our social world was built around alcohol,” Bullock said. “So it often meant that the choice was either stay and be sober or go out and drink too much and feel terrible the next day.”

The pair founded Cann in 2018, promising a low-dose cannabis-infused drink that could be bought in a six-pack and have the same bubbly, light taste as a canned cocktail (but without the booze). At the time, THC beverages existed in 10-milligram cans that, Bullock said, “is too much for a regular person having a social experience.”

The startup’s two-milligram THC drinks rolled out in California, and slowly moved into other states that allowed the sale of cannabis drinks. The company raised $32 million in funding over the course of two rounds, but still had to work around different state laws carefully as it created distribution strategies. Cann also couldn’t rely on social media marketing due to the nature of the product.

Then, something changed. During the pandemic, online sales for Cann drinks picked up. The company tripled the size of its business, deliveries shot up to 10x more than pre-pandemic numbers, and, in 2022, it sold its 10 millionth can.

“That’s a very small scale compared to alcohol,” Bullock said. “But also alcohol has hundreds of thousands of places where it can sell, and we have a few thousand.”

‘It’s its own thing.’

Cann’s not the only startup to see a shift. Athletic Brewing, perhaps the most well-known nonalcoholic craft beer startup in the U.S., saw massive adoption during the pandemic that stuck even after social distancing norms ended.

“Some of our best weeks of the year are around Memorial Day, July 4th holiday, Labor Day,” said Chris Furnari, communications lead at Athletic Brewing. “So we follow beer trends generally. Just because we’re nonalcoholic, it doesn’t really matter.”

Indeed, Athletic Brewing says 80% of its customers aren’t sober, something NielsenIQ data follows: Around 78% of soft spirit consumers also purchase traditional alcohol.

But companies like Athletic Brewing and Cann aren’t trying to replace alcohol — instead, they’re trying to integrate with other beverages you might see at a cookout or dinner party, like soda and tea.

Companies are making whiskeys that have the alcohol by volume level of a kombucha. Others are making distilled botanical spirits out of herbs and plants that taste nothing like gin or other traditional liquors. As Soft Spirits’ Barkley said, “they’re their own thing.”

“That’s the area that I find exciting because I used to drink alcohol and I know what gin tastes like, I know what whiskey tastes like,” Barkley said. “So this gives you a new avenue to explore [for] a different, unique experience.”

Illustration: Dom Guzman

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