“AMERICANS ARE DRINKING LESS” WHAT DOES THAT MEAN FOR BRANDS?
Why Alcohol Brands Should Invest in BOTH Traditional AND Non-Alcoholic Portfolios Now
New federal dietary guidelines about alcohol signal a fragmenting alcohol market. Smart brands are investing in a catalog and retail media for both traditional and NA products to capture the full spectrum of consumer behavior.
The 2025-2030 U.S. Dietary Guidelines just confirmed what the data already showed: American drinking behavior is fragmenting. But here’s what most alcohol brands are missing: this isn’t a crisis to weather, it’s a dual-track opportunity to capture.
While Americans are drinking less than at any time since 1939, the guidelines stopped short of recommending abstinence. Instead, they validated moderation and with it, a massive retail media opportunity for brands willing to invest across both traditional alcohol and non-alcoholic (NA) portfolios simultaneously.
Why It Matters
The shift from specific daily limits to general guidance isn’t just regulatory housekeeping. It’s a market signal that consumer behavior has evolved beyond binary choices. Today’s drinkers aren’t choosing between “drinking” and “abstaining.” They’re choosing between occasions, contexts, and wellness goals.
For alcohol brands, this fragmentation creates a strategic imperative: become a “Total Beverage” company or risk losing customers every time they moderate.
Key Takeaways at a Glance
- 93% of NA beverage buyers also purchase traditional alcohol. They’re the same customers, not different segments
- Americans drinking less creates premiumization opportunity for traditional products positioned around quality and moderation
- Target’s 30% wellness expansion specifically calls out functional and non-alcoholic beverages as growth categories
- Brands using “zebra striping” strategies capture $213 more in annual spending per household
- Retail media allows precision targeting of “substituters,” the 43% of consumers who alternate based on occasion
What Does “Americans Are Drinking Less” Actually Mean for Brands?
It means the market is smaller but more sophisticated, and brands that adapt will capture disproportionate value.
The data is unambiguous: U.S. weekly drinking per capita has hit lows not seen since the 1990s. Participation in Dry January has grown from a niche UK campaign to a mainstream American movement, with 30% of Americans participating in 2025, a 36% increase from the previous year.
The generational shift is even more pronounced:
- 65% of Gen Z plans to drink less in 2025
- 39% of Gen Z is going fully dry for the entire year
- Nearly half (49%) of all Americans are actively trying to reduce alcohol consumption
But here’s the critical nuance: this isn’t prohibition 2.0. The new guidelines didn’t recommend abstinence. They validated moderation, acknowledging that alcohol “allows people an excuse to bond and socialize,” as federal health officials noted.
For brands, this creates a premiumization opportunity. When consumers drink less frequently, they trade up to higher-quality options. The “top-shelf” migration is already underway, with premium products driving growth across beer, wine, and spirits categories.
How Does the “Substituter” Market Change Everything?
Answer: The 93% overlap between NA and traditional alcohol buyers means these aren’t separate markets. They’re the same customers making different choices based on context.
The most important statistic in the entire alcohol industry right now: 93% of non-alcoholic beverage buyers also purchase traditional alcoholic beverages.
The person buying Heineken 0.0 on Monday is the same person buying regular Heineken on Friday. The customer ordering Athletic Brewing’s non-alcoholic IPA for “Dry January” is likely buying craft beer in February.
This behavior is called “zebra striping”, alternating between alcoholic and NA options during a single occasion or across different social contexts. Research shows:
- 43% of no/low-alcohol consumers identify as “substituters” who switch between full-strength and non-alcoholic drinks depending on the occasion
- 56% of NA drinkers mix alcoholic and non-alcoholic beverages during a single bar or restaurant visit
- Households that purchase both NA and traditional alcohol spend an average of $700 annually on total alcohol, $213 more than those who only buy alcoholic products
The implication is clear: Brands that only invest in traditional alcohol advertising lose the sale every time a customer chooses moderation. Brands with robust NA portfolios capture revenue regardless of the customer’s choice.
Why Is Target’s Wellness Expansion a Game-Changer for Alcohol Brands?
Because Target just validated that wellness and alcohol can coexist on the same shelf and created a roadmap for brands to capture both opportunities.
On January 7, 2026, Target announced a 30% expansion of its wellness assortment, specifically calling out “functional and non-alcoholic beverages” as a core growth category. The strategic bet is backed by compelling performance data:
- Target’s Q3 2025 beverage category rose 7%, with Target specifically crediting increased demand for prebiotic sodas and better-for-you energy drinks
- 70% of Target guests already shop wellness at the retailer
- Target is adding brands like RYZE mushroom coffee, Protein Pop sodas, and Naked Life non-alcoholic cocktails
- Most new wellness products will be priced under $10
But here’s what makes this a dual opportunity: Target isn’t abandoning its alcohol business. The retailer continues to expand its premium NA selection through partnerships like the Sèchey collaboration while maintaining robust traditional alcohol sales.
For alcohol brands, this creates parallel retail media opportunities:
- Traditional alcohol products positioned around quality, moderation, and social connection for Target’s core shopper base
- NA line extensions capturing the same customers during wellness-focused moments, Dry January participation, and everyday moderation
Walmart is making similar moves, with brands like Better Than Booze launching mocktails in 437 stores across key markets and Bero (Tom Holland’s NA beer brand) rolling out at Target at accessible $12/6-pack price points.
What Does the “Total Beverage” Strategy Look Like in Practice?
It’s about meeting the same customer at multiple entry points, using retail media to ensure your brand wins regardless of whether they’re drinking alcohol today.
Major alcohol companies are already executing this playbook:
Molson Coors rebranded from “Brewing Company” to “Beverage Company,” launching both traditional beer innovations AND Roxie zero-proof canned cocktails.
Heineken invested heavily in Heineken 0.0, positioning it not as a compromise but as a lifestyle choice through partnerships with programs like The Bachelor.
AB InBev, the world’s largest brewer, now has the largest non-alcoholic portfolio in the industry, with combined NA market share more than double its nearest competitor.
The retail media advantage: These brands use first-party data from retailers like Target and Walmart to execute precision targeting:
- Confirmed purchase audiences: Target shoppers who buy traditional red wine but haven’t tried the brand’s NA alternative
- Occasion-based segmentation: Serve traditional alcohol ads during holiday periods; emphasize NA products during Dry January and wellness-focused seasons
- Geographic optimization: Use geo-targeting within a 7.5-mile radius of priority stores, which has shown click-through rates as high as 85%
Dynamic ad technology is particularly powerful for NA products. By embedding retailer selection directly into ads using live inventory data, brands can reduce conversion friction by 90%, showing shoppers exactly where products are in stock nearby.
How Should Brands Position Traditional Products in This New Landscape?
Focus on quality over quantity, social connection over consumption, and premiumization over volume.
Smart brands are messaging around:
1. Quality and Craft When consumers drink less frequently, they choose better. Position traditional products as premium experiences worth savoring.
2. Social Connection Federal health officials acknowledged that alcohol’s role in “bonding and socializing” has genuine wellness value. Emphasize the social ritual, shared experiences, and meaningful moments.
3. Moderation as Sophistication Frame responsible consumption as a mark of discernment. Campaigns that celebrate “savoring” and “appreciating” position moderation as aspirational rather than restrictive.
Retail media tactics for traditional products:
- Target Circle offers for existing loyal customers
- Media campaigns emphasizing quality ingredients, craft processes, and heritage
- 1P/3P media using DIGITS’ geo-targeting to reach shoppers near Target stores during key purchase occasions
- Paid search (marketplaces) capturing low-funnel intent
What Retail Media Strategies Work Best for NA Products?
High-precision targeting, frictionless conversion paths, and strategic seasonal timing, all leveraging the 93% buyer overlap.
The most effective NA retail media strategies treat these products as complementary to traditional alcohol, not competitive with it:
1. Leverage First-Party Data for Cross-Selling Use Target Circle and Roundel to identify customers with established brand loyalty in traditional products, then introduce them to NA alternatives.
2. Optimize the Digital Shelf
- SEO overhaul: Move toward common search terms like “smooth” or “berry-forward”
- Enhanced PDPs: Add quick recipes, mixer suggestions, and food pairings to increase engagement
- Review management: Positive reviews are critical for converting hesitant NA first-time buyers
3. Reduce Conversion Friction Third-party delivery platforms (Instacart, DoorDash, Gopuff) offer more creative freedom for NA advertising. These platforms use dynamic inventory to show only in-stock products.
4. Time It Right
- January volumes are more than double the average due to Dry January participation
- Spring and outdoor occasions see NA consumption spikes around Memorial Day
- Back-to-school and fall wellness resets create additional windows
5. In-Store Digital Activation In-store digital display networks are showing remarkable results. Early partners like Mondelēz saw a 14% lift in in-store sales. These screens influence purchasing at the critical final moment.
How Does DIGITS Help Brands Navigate Both Sides?
Through Target expertise, alcohol-specific compliance knowledge, the industry-leading Cheers Network, and data-driven strategies that treat traditional and NA as a unified portfolio.
DIGITS is uniquely positioned to help alcohol brands execute the “Total Beverage” strategy because we understand that success requires both strategic expertise and the right technology infrastructure to reach consumers wherever they shop.
Introducing DIGITS Cheers Network
The Cheers Network is our groundbreaking retail media solution purpose-built for the adult beverage industry. This network consolidates first-party and third-party activations into one streamlined managed service, making it easier than ever for alcohol brands to execute targeted retail media across America’s top omnichannel retailers.
The Cheers Network gives you access to:
- Marketplaces: Activate on-site placements via Instacart, DoorDash, Uber, BevMo, and more
- 1P Retailer Solutions: Utilize first-party audiences and closed-loop reporting for off-site media at Walmart and Kroger, plus grocer aggregators Rippl and CitrusAd
- 3P Preferred Agency Solutions: DIGITS is the preferred agency for 3P media strategy at Target, Schnucks, and other regional grocers
- 3P Retailer Solutions: Leverage proven third-party targeting solutions to drive brand sales at TotalWine, ABC, Costco, Publix, and more
- Paid Social: Run premium Facebook, Instagram, and TikTok campaigns via DIGITS proprietary Cheers pages, Trip, or your own brand page
Why the Cheers Network matters for Total Beverage strategy:
When you’re managing both traditional and NA portfolios across multiple retailers, the complexity multiplies fast. The Cheers Network streamlines this complexity by providing a single point of contact for campaigns that span Target, Walmart, delivery apps, and specialty retailers. Whether you’re launching an NA product at regional grocers or driving traditional sales during peak seasons, you have one unified platform and strategy team.
1. Deep Target Expertise
- We’re a Target Managed Services partner and Roundel Media Studio Certified agency
- Access to exclusive Target sales data for detailed campaign lift reporting
- Proprietary Target Circle analytics showing incrementality and ROI
- Direct relationships with Target’s beverage buying and wellness teams to stay ahead of merchandising shifts
2. Alcohol Category Specialization
- Understanding tied-house laws and three-tier distribution compliance across all 50 states
- Navigation of state-by-state regulations for both traditional and NA products
- Dynamic multi-retailer creative that reduces compliance friction while maintaining brand consistency
- Expertise in age-gating, responsible messaging, and evolving regulatory landscapes
3. Portfolio-Wide Strategy
- Annual planning that allocates budget strategically across traditional, NA, and THC beverage categories
- Campaign calendars that capitalize on both celebratory occasions (traditional alcohol) and wellness moments (NA products)
- A/B testing across the Cheers Network to understand which messaging resonates for which product lines and retail channels
- Unified measurement showing how traditional and NA investments work together to drive total brand growth
4. Data-Driven Optimization
- Monthly Digital Success Scorecards tracking sales, share, and category trends across all retailers in the Cheers Network
- Campaign lift reporting showing true incremental impact for both traditional and NA product types
- Real-time optimization across marketplaces, first-party retailers, and third-party channels
- Cross-channel attribution showing the consumer journey from awareness to purchase
Want DIGITS’ help building your Total Beverage strategy?
Download our free BevAlc Guide to explore the full landscape of retail media options available through the Cheers Network. Or Request a Target Circle Market Share Report to see how your traditional products are performing and where NA opportunity exists in your category.
Action Steps: What Should Alcohol Brands Do Right Now?
1. Audit Your Portfolio
- Do you have NA line extensions? If not, partner or develop them
- Are your traditional products positioned around moderation and quality?
- Is your retail media budget allocated to capture both types of occasions?
2. Segment Your Audience
- Identify “substituters” in your customer base (likely 40% of buyers)
- Map purchase occasions: when do they choose traditional vs. NA?
- Build targeting strategies for both segments using first-party retail data
3. Optimize Your Digital Shelf
- Ensure both traditional and NA products have robust PDPs with recipes and pairing suggestions
- Update SEO to match how real consumers search
- Implement review management strategies for NA products to build trust
4. Plan Seasonally
- Heavy up on traditional products during Q4 holidays and summer occasions
- Invest in NA during Dry January, spring wellness, and back-to-school
- Use Target Circle Week and wellness events as activation windows
5. Measure Holistically
- Track total brand spending, not just product-line performance
- Measure cross-purchase behavior
- Calculate lifetime value of “substituters” vs. single-category buyers
FAQs: Navigating the Traditional + NA Opportunity
Q: Won’t investing in NA products cannibalize my traditional alcohol sales?
A: The data says no. 93% of NA buyers also purchase traditional alcohol, and households that buy both categories spend $213 more annually on total alcohol. NA products capture sales you would otherwise lose when customers moderate.
Q: How do I message both products without confusing my brand identity?
A: Position them as tools for different occasions, not competing values. Heineken doesn’t apologize for Heineken 0.0. They position it as “another option for enjoying time with friends.” The brand remains consistent; the product adapts to the consumer’s choice.
Q: What if my brand doesn’t have an NA line extension yet?
A: Start with retail media strategy for your traditional products while exploring partnership or development options for NA. You can still message moderation, quality, and social connection. DIGITS can help you identify white space in your Target category.
Q: How much of my retail media budget should go to NA vs. traditional products?
A: Many brands start with 20-30% allocated to NA and adjust based on performance. The key is to measure total brand impact. If NA investment increases overall household spending, it’s worth expanding.
Conclusion: The Dimmer Switch Strategy
The beverage market is no longer a binary light switch. It’s a dimmer switch, with consumers adjusting their intake based on the day, the occasion, and their wellness goals.
Brands that only offer traditional alcohol lose the customer as soon as the light feels too bright.
But brands that invest in both traditional and NA portfolios, and use retail media to show exactly when and where to use each, ensure they stay in the room regardless of how much the consumer chooses to dim their intake.
The new federal guidelines didn’t create this market fragmentation. They simply confirmed what the data already showed: American drinking behavior is evolving toward nuance, moderation, and substitution.
The winners will be “Total Beverage” companies that meet the same customer at every point on their wellness journey, from celebratory toasts to mindful Mondays.
The beverage alcohol marketing landscape is complicated, but it doesn’t have to slow you down. The DIGITS BevAlc Look Book brings clarity to the chaos by consolidating channel guidance, compliance requirements, performance benchmarks, and activation strategies into one visual, easy-to-reference resource.
Whether you’re planning a national brand campaign, optimizing on-demand delivery programs, or exploring regional retailer partnerships, the Look Book gives you the foundation to make smarter decisions faster. Combined with the operational expertise of the DIGITS Cheers Network, BevAlc brands now have a clear path to compliant, high-performance marketing that drives measurable sales growth.
Ready to build smarter BevAlc campaigns? Download the DIGITS BevAlc Look Book and connect with our team to start planning your next activation.
References
- Circana, “Sober Curious Nation: Alcohol Survey 2025”
- Morning Consult, “Dry January Has Gone Fully Mainstream”
- NIQ, “Non-Alcohol Is No Longer a Niche”
- Retail TouchPoints, “Target’s New Year’s Resolution: More Wellness”
- Athletech News, “Target Is Adding More Wellness Products”
- BevNET, “Better Than Booze Mocktails Launch at Walmart”
- CNN Business, “Target is taking booze-less spirits mainstream”
- Numerator, “Dry January’s Impact on Shopping Habits”
Dave Glaza, Founder & CEO of DIGITS, remains committed to bringing digital capabilities to physical stores!
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