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3 Stocks to Ride a Booming Non-Alcoholic Spirits Market

Non-alcoholic spirits are gradually penetrating the beverages market, given the rising preference among younger consumers for alcohol-free beverages. A major reason for this preference is the growing awareness of one’s health and the products that may benefit the same.

We have, therefore, rounded up some stocks that are big players in the non-alcoholic spirits market. One may consider investing in them to cash in on the rising popularity of these beverages.

Non-Alcoholic Spirits Market Promises Solid Growth

According to a report by Global Market Insights, the non-alcoholic wine and beer market is expected to increase over $30 billion by 2025 from around $20 billion in 2018. The growth of this market is primarily being driven by an improving standard of living along with the growing awareness of health benefits that non-alcoholic beverages bring to the table.

Factors Driving Consumption of Non-Alcoholic Spirits

Diving deeper into the universe of non-alcoholic spirits, one may realize that the growing number of health-conscious consumers isn’t the only reason that demand for these products are increasing. Stringent regulations on alcohol consumption across many countries are quite instrumental in pushing their demand.

For example, restrictions on alcohol consumption in Islamic countries such as Iran, Egypt and Libya spurred demand for non-alcoholic wine and beer. In fact, Middle East accounts for almost a third of sales of alcohol-free beer around the world. 

In addition, given the inclination of younger generations toward non-alcoholic beverages, countries with a younger customer base could support the industry’s development. For example, a majority of Iran’s population is aged less than 30 years, thus demonstrating high potential for growth of the non-alcoholic spirits market, per the Global Market Insights report.

Going by specific segments in the non-alcoholic spirits market, one may note that the beer segment accounted for more than 60% of the non-alcoholic wine and beer market share in 2018. Higher demand was mostly witnessed across Europe and North America, owing to the beverage’s health benefits.

In addition, the wine segment is expected to witness a compound annual growth rate over 8% up to 2025. More people are opting for mocktails instead of alcoholic beverage-infused ones, which is likely to boost the beverages’ consumption rate and therefore demand.

Also, shifting consumer preference toward flavored wine is also another major factor pushing product sales in the domain. Finally, more availability of premium brands that offer non-alcoholic spirits by wine manufacturers and rapid expansion of distribution network are also likely to boost the market.

3 Stocks to Buy

We have, therefore, chosen three stocks that offer a wide range of non-alcoholic spirits and other beverages. All these stocks carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

National Beverage Corp. FIZZ develops and produces a portfolio of sparkling waters, juices, energy drinks, and carbonated soft drinks. National Beverage, which belongs to the Zacks Beverages - Soft drinks industry, has an expected earnings growth rate of 4.3% for the next quarter. The Zacks Consensus Estimate for the company’s current-year earnings has moved 35.6% north in the past 30 days. The stock carries a Zacks Rank #1. National Beverage’s shares closed the Jul 16 trading session at $67.01.

Celsius Holdings, Inc. CELH is a developer and distributor of functional calorie-burning fitness beverages. Celsius, which belongs to the Zacks Food - Miscellaneous industry, has an expected earnings growth rate of more than 100% for the next year. The stock carries a Zacks Rank #1. Celsius’ shares closed the Jul 16 trading session at $13.85.

Monster Beverage Corporation MNST is a developer and marketer of energy drink beverages and concentrates. Monster Beverage, which belongs to the Zacks Beverages - Soft drinks industry, has an expected earnings growth rate of 14.9% for the next year. The Zacks Consensus Estimate for the company’s current-year earnings has moved 0.5% north in the past 30 days. The stock carries a Zacks Rank #2. Monster Beverage’s shares closed the Jul 16 trading session at $72.62.

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