There’s been a change in the air. Have you felt it?
A growing base of the population is demanding moderation without compromising on flavor. A generational shift in drinking habits driven by health concerns, social shifts, and economic factors has Gen Z drinking 30 percent less than Millennials, according to a recent Morgan Stanley report. At Yakima Valley Hops, we like to think we’re hop people in the business of beverage. Beer may be down, but overall beverage consumption is up, and brewers are feeling the effects. The question is how to diversify your lineup.
What’s Driving the Shift:
- Health first: low-ABV or alcohol-free options with functional ingredients
- Social moderation: mindful drinking in gatherings and events
- Economic sense: lower cost-per-occasion without sacrificing experience
Enter the rise of the functional beverage. Newer generations seek an alternative kind of buzz – non-alcoholic or low-ABV beers, hop waters, cannabis- or hemp-forward drinks, or whatever mood-enhancing beverage fits the moment. Functional beverages deliver a clear “function” outside traditional norms – energy, hydration, better sleep, more clarity or just a good-natured buzz without the next-day drag. Above all, these drinks are flavor-focused.
Non-Alcoholic Beer and Hop-Forward Hydration
One group of functional beverages sits very close to beer. Hop waters and non-alcoholic beers offer the health-forward balance consumers crave – the experience of beer without the buzz. Non-alcoholic beer is picking up steam globally, and most large breweries already have NA counterparts in their portfolio.
Hop water in particular is approachable and easy to make – most breweries already have the equipment and hop inventory on hand. It requires less capital than brewing an NA beer and can be tailored to your house style. A few reasons to consider adding hop water to your tap list:
- Minimal setup: cold-steep pellet hops in carbonated water
- Customizable flavor: adjust bitterness, aroma or mouthfeel batch by batch
- Broad appeal: attracts beer lovers, sober-curious guests and newcomers alike
Ryan Coleman of Hike Hopped Seltzer puts it well: “Why not make something that is still super interesting to taste but doesn’t remind you of the old stuff?”
THC, CBD and Botanical Beverages
Hops and cannabis are botanical cousins, but consumers reach for a THC or CBD drink for different reasons than they do for beer. Since the 2018 Farm Bill legalized industrial hemp, hemp-derived beverages have taken off. In Minnesota alone the hemp drinks market is approaching $200 million, and Surly Brewing in Minneapolis saw 91 percent year-over-year growth on their hemp-derived THC lineup last summer. Research firm Euromonitor projects U.S. hemp-derived beverage sales jumping from $232 million in 2023 to $4.1 billion by 2028.
These botanical beverages give brewers a way to innovate in taprooms, reach new customer segments, and experiment with hybrid flavor profiles. Whether it’s a hop-CBD tonic or a THC-infused seltzer, this category is expanding the definition of what a brewery can pour.
There’s a whole new landscape out there for brewers willing to explore functional beverages that provide a flavorful buzz and open doors to new consumers. From NA IPAs to hop-infused waters and hemp-forward tonics, the future of brewing is as much about purpose and experience as it is about alcohol content.