Suggested Prompt

Twenty years ago, most consumers balked at the idea of drinking “nonalcoholic” beer. Premium bottled iced coffee drink options were few and far between. Bubble tea, or “boba” as it’s known, was never heard of outside of Asia, and the idea of sodas infused with anything other than sugar was almost unheard of in the beverage industry.

Flash forward to 2025, and new consumer trends have created an exciting opportunity for beverage leaders to reinvent their brands, reshape their businesses and reinvest in consumer engagement to connect with new demographics. Using AI technology will be essential in building a strong brand identity in the digital world, where most consumers live and seek information.

These are the top trends shaking up the beverage industry in 2025, and strategic advice for executives to raise a glass and prepare for the change through digital business transformation.

The top beverage industry trends in 2025
 

The sober curiosity spectrum: From no and low-alcohol to the rise of mid-strength drinks

Non-alcoholic (NA) beverages such as seltzers, beers, wine and even liquor offer the experience of an alcoholic beverage without the associated downsides. Combined with the marketing power and influence of a celebrity, the demand for these drinks will grow across all markets, as Research and Markets predicts that the non-alcoholic beverage market globally will be valued at 3.4 trillion USD by 2034. 

Young adults are drinking less than they did two decades ago. A study by Gallup found that 59 percent of young Americans between 18 and 34 reported to have consumed alcohol in between 2021-2024 compared to 70 percent of young Americans between 18 and 34 in 2001-2003. .A separate study by Aviva found that 61 percent of U.K adults between 18 and 24 plan to reduce or completely stop their alcohol intake. 

On the other side of nonalcoholic beverages, the popularity of mid-strength or low alcoholic drinks is on the rise. Mid-strength beer and cider sits around the by 3.5 percent to 4.5 percent alcohol by volume (ABV) and spirits around 20 percent ABV, and, like nonalcoholic beverages, consumers find mid-strength alcohol to be “healthier” with fewer calories and a lower (ABV) content.  The market for mid-strength drinks is expected to grow by 3 percent compound annual growth rate (CAGR) in Europe, U.K. and the U.S according to ISWR Drinks Market Analysis.

The economics of NA beverages: different drafts, different tax

Interestingly, the economics of nonalcoholic beverages are subtly different. In most countries, the majority of the price of an alcoholic beverage is tax, including value-added tax or sales tax. In many markets, beverages are progressively taxed based on their strength (percent alcohol by volume), rather than by type, to incentivize decreased alcohol consumption. However, nonalcoholic beverages are not subject to these taxes, making them potentially more profitable for manufacturers, despite the higher production costs due to different supply chains and manufacturing processes. Businesses profit from the nonalcoholic trend by creating their own line of nonalcoholic spirits. For example, if a consumer is a fan of Diageo's gin brands, the company would want to ensure that they choose their nonalcoholic options over competitors' offerings when they’re opting out of alcohol. Consumers are choosing mid-strength as they want the experience of an alcoholic drink but in a more controlled way and are wary of paying the same price (or more) for a zero-alcohol variant of their favorite drink.

The unsweetened truth: Consumers are moving away from sugar-sweetened beverages and embracing zero and natural sugar drinks

The rising tide of health consciousness is washing away the appeal of sugary beverages, prompting consumers to seek out healthier options. Beverages, particularly those high in sugar, are a significant contributor to obesity. This has led to various markets and geographies implementing taxes on carbonated soft drinks. Beverage brands are meeting this shift by increasing investment in the production of zero-sugar or low-sugar beverage options, like Coke Zero instead of Coke Classic.

But it's not just about raw, granular sugar. One of the major sugar culprits for obesity is high fructose corn syrup. This sweetener is used extensively in beverages and is problematic because it's a type of sugar that's difficult for the body to break down. While corn syrup is largely banned in Europe, it remains prevalent in the U.S.—and is also much less expensive to use.

‘Natural’ sweeteners like Stevia and monk fruit derived from plants have grown in popularity over artificial sweeteners such as aspartame and sucralose. While both artificial and natural sweeteners are calorie-free, the plant-based nature of monk fruit and Stevia are perceived as healthier sugar-free alternatives among consumers. 

Less is more: The rise of premium sips

It’s clear that consumers are not only drinking alcohol less, but they’re drinking better, and it’s up to brands to figure out how to market their premium offerings to appeal to consumers. In the on-premise setting, consumers are willing to experiment with unique, premium offerings like craft beers or spirits, or exotic flavors like pomelo or ube. However, for casual consumption, established brands often hold the edge due to familiarity and perceived quality.

This presents a crucial challenge for major players: effectively communicating value to younger consumers who prioritize quality over quantity. This demographic, while not exclusive to premiumization, demonstrates it more pronouncedly. They also consume less alcohol overall, making value exchange even more critical.

Novelty is also key, especially in the spirits category. Partnering with mixologists and hosting recipe competitions can create engaging content and encourage experimentation with premium brands. Consider trending flavors and ingredients to position your product within relevant cultural contexts. Even “nostalgic” flavors like Neapolitan ice cream or root beer can create an amusing sense of novelty for consumers. For example, LVMH has recently released an expression of its Glenmorangie Malt Whisky called ‘A Tale of Ice Cream.’

Functional drinks: Beverages with benefits will dominate the cold (and hot) drink market

Driven by their pursuit of well-being, consumers are gravitating towards nutraceutical beverages, a category within the broader trend of functional drinks.

Nutraceuticals are foods or food supplements that are isolated or purified that have physiological benefits. Brands across categories, from coffee to carbonated beverages, are embracing this trend to infuse their product mix with new ingredients and functional beverages.

This growing category of drinks with benefits has three categories:

Naturally beneficial beverages: drinks that are beneficial on their own, such as green tea drinks, green juice or coffee

Enhanced beverages: drinks that have added ingredients or have been enhanced with special benefits, like bottled lattes infused with lion’s mane mushrooms for focus or a seltzer with added CBD for calming properties

Functional drinks: drinks that have a specific outcome in mind, like protein smoothies designed to decrease appetite or magnesium mocktails designed to help consumers fall asleep

Go-to-market strategy with nutraceuticals

However, businesses should be mindful of how much packaging real estate they have on box to convey these health benefits. The FDA’s new rule on “healthy” food labeling says that the food product must meet these criteria:  

1. Contain a certain amount of food from at least one of the food groups or subgroups (such as fruit, vegetables, grains, fat-free and low-fat dairy and protein foods) recommended by the Dietary Guidelines for Americans
2. Meet specific limits for added sugars, saturated fat and sodium

Businesses should invest heavily in the digital space and continue to build their branding. Connecting digitally is the best way to reach consumers and potentially turn them into brand advocates. 

Consider putting a QR code on each can or packaging consumer can scan that takes them to the brand website. For example, Oatly, a non-dairy oat milk company, has placed QR codes on billboards and newspapers ads challenging dairy companies to match Oatly’s transparency about its environmental impact. In doing so, Oatly has also built a strong, recognizable brand identity letting consumers know that its non-dairy milk alternative is also environmentally friendly and sustainable.  

The AI pour: Generative AI will personalize drink blends through a simple conversation

Generative AI will provide new ways for recreational drinkers to personalize their experience with their coffee and alcoholic beverages in ways previously not imagined.

According to Publicis Sapient’s generative AI consumer research, 27 percent of consumers that have already used a generative AI tool are excited about its ability to improve customer service interactions and personalize product recommendations.

Imagine a virtual barista or mixologist, powered by AI, that can answer any question about a brand or drink, create customized blends based on personal preferences and even provide a detailed explanation of the drink-making process or the carbon emissions impact of a drink.

The ROI of these AI-powered experiences is multifaceted. Firstly, they offer a unique and engaging way for brands to interact with their consumers, fostering a deeper connection and loyalty. Secondly, the data gathered from these interactions provides invaluable insights into consumer preferences, enabling brands to continually refine their offerings and marketing strategies.
 

Investing in this technology can significantly enhance a brand's competitive edge. However, it's important for brands to be aware of the challenges that come with implementing AI.

Fifty-three percent of global consumers are concerned that an increase in generative AI tools will lead to a lack of data privacy and an increase in misinformation.

Building strong data privacy standards, managing the complexity of AI technology and maintaining the authenticity of the brand voice in AI interactions is crucial.

Three opportunities for conversational AI in the consumer goods industry

The Ozempic effect: Protein and fiber-rich beverages pave a new way of consumption

The explosive popularity of semaglutide (also known as Ozempic) is hard to ignore, and it’s affecting consumer diets. Originally approved for controlling blood sugar levels in people with Type 2 diabetes, it’s been approved by the FDA for weight loss management. According to survey data from KFF, 1 in 8 American adults report using or had used a Glucagon-like peptide 1 (GLP-1) drug. Sales for the drug increased 60 percent worldwide in 2023, with shortages facing the U.S and Australia. 

A common feature of this class of drug is a decreased appetite. Consumers who take this medication have less room in their stomachs due to the longer digestive process. These consumers are eating and drinking less with Morgan Stanley forecasting a four percent decline in soft drink, alcohol and salty snacks sales in 2024 —and the beverage industry has taken notice. To cater to this health-conscious crowd, oat-based protein drinks and other beverages are emerging in the market, aiding those who are using appetite suppressing medication and to give choices to those who are following a calorie deficit regime. The rise of clearly targeted, high-protein brands is accelerating, exemplified by Danone’s GetPRO high-protein yogurt range in the U.K. and Oikos yogurt in the U.S.

AI can support meal tracking and calorie counting

Building AI digital assistants that help with meal planning and calorie counting can also help consumers stay on track with their health goals and provide another channel for brands to reach the health-conscious segment. For example, Noom, a weight-loss app, launched an AI personal assistant that offers wellness coaching and 24/7 assistance for wellness-related questions. Noom also launched AI-powered food logging, where users can upload a photo of a food and AI automatically detect and identify the ingredients and quantities, streamlining the logging process. Users have the option to edit, add or swap ingredients to customize their entries.

The loyalty loop: Brands will connect on-premise and off-premise beverage consumption

As beverage brands expand their ready-to-drink beverage options, in terms of products, quality and even purchase points, brand presence across the omnichannel consumer journey becomes much more difficult to connect. In 2025, brands will develop new ways to connect consumer data between on-premise consumption in cafes, bars or restaurants and retail touchpoints.

This journey is not just about the physical route a product takes from the cafe or bar to the consumer, but also about the digital footprints left by consumers across the various purchase channels.

For example, a consumer might buy a chilled Starbucks drink from a convenience store, but this transaction doesn't feed into Starbucks' customer data. The company is still blind to the consumer's behavior in this segment, missing out on valuable insights that could enhance their brand strategy.

These interaction points with the brand present a significant opportunity for beverage companies to better understand their customers and tailor their offerings accordingly. The same principle applies to the alcoholic beverages and premium spirits sector. Whether a consumer is savoring a premium spirit on-premise (in a bar) or off-premise (purchased to drink at home), it's challenging to attribute the consumer identity across both spaces.

The challenges and opportunities of in-store retail technology

Attempts to connect touchpoints and collect consumer data in retail have been rocky, and most in-store technology is still in the early stages. For example, digital cooler screens that display beverage ads on doors in convenience stores can often glitch or become overwhelming for consumers, creating a negative experience that’s difficult for brands to control or oversee. Instacart has also rolled out a pilot program of AI-powered smart carts to automatically track consumer purchases in real time and make recommendations. The carts use computer vision to sense which products are being added to the cart, keeping track via a digital checklist and seeing real-time, personalized ads on a small screen based on the additions.

By leveraging technological capabilities to connect consumer identities and manage first-party data across experiences, beverage companies can gain valuable insights. This not only reduces costs but also provides a competitive edge in the market.

However, if the focus is primarily on the technology rather than the consumer experience, the return on investment from these opportunities may be compromised. This is because the added complexity may not justify the potential benefits. By placing the consumer at the heart of the process and adopting a holistic approach to designing the consumer journey, the integration of new technology can be made seamless.

Publicis Sapient’s customer journey transformation solution

The future of the beverage industry in 2025: how to get started

By adapting to these trends, embracing technology and prioritizing consumer needs, beverage brands can navigate the evolving landscape and secure success in 2025 and beyond.
 

Balancing the investment and testing of new digital capabilities like generative AI, in-store retail technology, data clean rooms and more, while also managing added costs, the consumer experience and the employee experience at the same time will be a challenge.

Connect with a beverage industry expert below to begin your digital transformation journey.