What a Recession Could Mean for Non-Alc Brands

When the economy slows, consumer behavior shifts. Bars get quieter and restaurant reservations dwindle. But, the desire for social connection and rewarding oneself doesn’t go away. For non-alcoholic beverage brands, this presents both a unique challenge and a surprising opportunity.

As potential indicators of an economic slowdown begin to emerge in 2025, the beverage industry is facing the same question it did in 2008: how do you stay relevant when people are going out less and spending more cautiously? 

The Return of the At-Home Ritual

According to research from Chicago Booth, consumer spending on food consumed at home increased during the Great Recession, while restaurant spending dropped by over 11%. The U.S. Bureau of Labor Statistics further notes that in downturns, the relative importance of at-home food rises. People still spend, but they do it for their kitchens, not from full-service menus.

That means there’s still demand for beverages that support at-home rituals. Non-alc brands that are built for the bar might need to rethink what “occasion” really means.

And many already are.

Brands like Unified Ferments and Savyll have built their products with at-home consumption in mind. Unified Ferments, for example, is deeply rooted in the wine world, with founders Young Stowe and Graham Pirtle originally planning a wine bar before switching to fermentation. 

Their single-origin tea ferments are packaged with the kind of intention that suits solo rituals or low-key dinner parties. Savyll, meanwhile, was designed to replicate cocktail moments in a convenient ready-to-drink (RTD) format. Ready-to-serve and RTD brands like these are uniquely suited for the “homebody” era.

Why DTC Might Matter More Than Ever

As in 2008, direct-to-consumer (DTC) channels may become increasingly important in the months ahead. When people skip the bar, they don’t stop indulging entirely. They just look for more convenient and affordable ways to enjoy their beverages.

And there’s historical evidence to support this: research from Forbes notes that, during downturns, drinking doesn’t disappear—it just relocates. People opt for in-home consumption and trade down to affordable luxuries.

That could mean big things for non-alc brands with a strong DTC presence, especially those offering RTD formats. For example, BREZ has seen high DTC conversion and retention for its THC-infused SKUs, in addition to strong growth across other online platforms like Amazon and TikTok Shop for its non-infused SKUs. 

The Lipstick Effect, But for Beverages

There’s another relevant consumer phenomenon: the lipstick effect. In tough times, consumers may cut back on major spending, but they still splurge on small joys. It’s why skincare products, premium chocolates, and yes, beverages, tend to perform well during recessions.

For non-alc brands, this means there’s room to stay premium if the offering feels like a defensible small splurge. Elevated packaging, sensory flavor profiles, and thoughtful branding can still command attention in uncertain times.

This phenomenon also intersects with seemingly unwavering wellness trends. As more consumers become aware of alcohol’s long-term health impacts, and as wellness culture continues to evolve, premium non-alc beverages hit a sweet spot: indulgence without compromise. In fact, some analysts point to these shifts as one of the key reasons for recent declines in alcohol sales, with Nielsen and IWSR reporting drops across spirits, wine, and beer since 2023. And recall that, in the aftermath of 2008, wellness spending became the new, socially acceptable way to signal status. 

What History Tells Us

The last major recession showed us that consumers don’t simply stop spending; they get more picky. They switch from mid-tier brands to either value-based or ultra-premium ones. They shop deals, but they still want quality. 

Drizly CMO Scott Braun even noted that during the early stages of COVID-19, premiumization actually increased. People were still drinking, they just expected more bang for their buck.

So what does this mean for non-alc?

Brands need to tighten their storytelling, double down on direct relationships, and show up in places that reflect the way consumers are living now. That may mean fewer tasting room activations and more home-based sampling. It may mean smaller packs at better price points. Or it might just mean a deeper investment in quality.

As JPMorgan’s 2024 economic outlook notes, even minor policy shifts, like tariff adjustments, can impact real consumer spending power. Brands that remain nimble, responsive, and consumer-first will be better positioned to weather the uncertainty.