Newsletter · · Ashutosh Agarwal

Non-Alcoholic Drinkers Still Drink as Hemp THC Drinks Face a December 12 Ban - Beverage Alcohol & Nicotine - Week of September 30, 2026

Beverage Alcohol & Nicotine for the week of September 30, 2026. Podcast synthesis on NielsenIQ data showing 94% of non-alcoholic buyers still buy alcohol, BERO's 90% of drinkers who still drink, hemp-THC drinks facing a December 12 federal ban and a likely 5mg cap, ready-to-drink cocktails growing while full-bottle spirits and aged whiskey slow, and craft brewery closures now citing moderation.

Beverage Alcohol & Nicotine

Week of September 30, 2026: Non-Alcoholic Drinkers Still Drink as Hemp THC Drinks Face a December 12 Ban

The most useful number I heard on the podcasts this week was 94%.

That's the share of non-alcoholic drink buyers who also buy regular beer, wine or spirits, according to NielsenIQ household data. It cuts through a year of "Gen Z is quitting" headlines. People aren't leaving alcohol. They're mixing it with other drinks: a real beer in the first half of the game, an alcohol-free one in the fourth quarter so they can drive home.

Meanwhile, the one category that was actually winning shelf space from alcohol, hemp-THC drinks, has about ten weeks left before a federal ban kicks in. And the investors backing it think it could one day be a quarter the size of alcohol.

TL;DR

  • Moderation is a mix, not a walkout. NielsenIQ's Kaleigh Theriault says 94% of non-alc buyers also buy alcohol. Non-alc is now a tracked $1B+ category, and beer makes up about four of every five dollars of it. BERO, Tom Holland's NA beer, says the same thing from the brand side: "90% of our consumers still drink."
  • Hemp-THC drinks are heading into a federal ban on December 12. Brewbound's reporting says the replacement framework now being negotiated in Congress would likely cap drinks near 5mg of THC, down from today's 10mg best-sellers. That cap would also rule out the big multi-serve bottles. At their peak, these drinks were "20, 30%" of some liquor stores' sales, according to investor Jason Sherman.
  • The alcohol that is growing comes in single cans. Sherman says ready-to-drink cocktails are still growing about 15% a year while 750ml spirits bottles and mixing cocktails at home are "on the decline dramatically." Recess's marketing chief went further: bourbon and whiskey makers are "literally stopping production." That's a direct read for Brown-Forman (BF.B), Diageo (DEO) and Pernod Ricard.

What's New

1. The "sober curious" drinker is really a switcher, and the data now proves it.

On the Joshua Schall Audio Experience, "Inside the $1B+ Adult Non-Alcoholic Movement | Kaleigh Theriault (NielsenIQ)" (Sept 24, 2026), NielsenIQ beverage analyst Kaleigh Theriault gave the cleanest data point of the week:

"It's around 94% of non-alcoholic buyers are also buying alcohol-containing drinks of some sort, whether that's beer, wine, or spirits. So it's really becoming this complement."

Some specifics worth keeping:

  • Beer dominates non-alc. "Beer is about four out of every five dollars spent on non-alcohol." Non-alc wine is currently bigger than non-alc spirits.
  • The $1B figure is too low. Theriault said the billion dollars NielsenIQ tracks is "likely understated," because it misses direct-to-consumer and Amazon sales. Those are channels non-alc brands can use and alcohol brands mostly can't.
  • Sales follow the regular beer calendar. Weekly non-alc beer sales "mimic what's happening in beer," with a peak around the 4th of July. Non-alc wine and spirits also spike at year-end for hosting and gifts. Dry January still brings a spike in buyers. After that she described a "stair climb" that keeps going up all year.
  • Where the growth is. She named spirits-based ready-to-drink cans (non-alc margaritas and similar) as the short-term growth leader. Non-alc beer stays "the primary" category, with high trial and repeat numbers, and it has stuck "closest" to the three-tier system. That's the legally required path from producer to distributor to retailer.
  • Gen Z drinks less but buys better. When they do drink, Gen Z "opt for premium products." One line from NielsenIQ's upcoming Gen Z report, which Gen Z staff are writing: on weekends "they live like rock stars," and during the week they don't spend and don't drink.
  • Why people cut back depends on age. Older consumers were more likely to cite money, which surprised her. They're "on a little bit more of a fixed income" and the least willing to pay full-beer prices for a non-alc beer. Health-driven moderators look for low-calorie, no-sugar labels. People cutting back for lifestyle reasons mostly care about flavor.

Why it matters: the bear case for brewers says non-alc is eating their volume. The data says the same customer is buying both. For Heineken (0.0), AB InBev (BUD), Diageo (DEO) (Guinness 0.0) and Molson Coors (TAP), the NA shelf is a way to keep the drinker between rounds, not a sign they've lost them.

2. The first NA beer brand built around a sober celebrity says 90% of its buyers still drink.

On Growth House, "The Philosophy Behind Building BERO | John Herman" (Sept 28, 2026), John Herman, the operator running BERO, told how the premium NA beer came together. A venture fund, the one Herman says was "instrumental" in building Kim Kardashian's Skims, pitched him a one-line brief: "premium non-alcoholic beer." Actor Tom Holland, then "a year and a half sober," came on as a genuine partner rather than a paid endorser. BERO launched October 16, 2024, timed deliberately "in advance of dry January 2025."

The telling line matches Theriault's data exactly: "90% of our consumers still drink, but they'll still pick up BERO." The goal is for BERO to become the "call brand" in bars, so customers ask "what BERO do you have?" instead of "what non-alcoholic drinks do you have?" Herman is relaxed about the fallback: "if they ask for a BERO and we're not there and they get a Heineken 00, that's cool." Partnerships so far include Aston Martin and Chase Sapphire Reserve for Business.

Worth noting: the bar is where this shift is being fought over. The ask isn't a separate NA menu. It's a named brand on tap next to the lager.

3. Hemp-THC drinks: a big category, a hard deadline, and a likely 5mg cap.

This week two podcasts covered the business side of the hemp-drink ban in detail.

On Brewbound Podcast, "Inside the Intoxicating Hemp Beverage Business as Federal Ban Nears" (Sept 23, 2026), Brewbound's hemp reporter laid out where things stand:

  • The deadline. The federal restriction takes effect December 12, with a THC threshold so low it is "basically non-existent." Several bills in Congress aim to fix this before then, but "we have midterms coming in two months."
  • The likely cap. Today's best-sellers settled at 10mg single-serve cans because "you get more milligrams per dollar." Multi-serve 750ml bottles, like those from Willie's, Delta, Uncle Arnie's and BREZ, also "do really well" at liquor retailers. But people close to the Capitol Hill talks told her "10 milligrams is too high" and it "will likely be somewhere closer to the five milligram ceiling." That would also "void out any of the large format multi-serve bottles."
  • Some sellers may ignore it. Some retailers and distributors say they will keep selling after December 12 and claim states' rights: "what are you going to do? Come and knock down our doors?"
  • Money is slowing down. Investment "has been slowing down in the last couple of months." One exception: Uncle Arnie's raised $2 million more, on top of a $7.5 million round from August 2025, because it also sells in licensed marijuana dispensaries. A federal hemp ban could push buyers there.
  • Who buys these drinks. Brands describe their core buyer as "the elusive soccer mom," or more broadly "people over 40 who are reducing or moderating their alcohol or have given up alcohol."

The investor view came from Business of Drinks, "135: The Investor's Test for Scalable Growth With Jason Sherman" (Sept 23, 2026). Sherman is an AB InBev veteran and co-founder of Top Shelf Ventures, which backs both hemp-THC and nicotine-pouch brands. He sits on the boards of "a couple" of hemp THC companies, so read his view with that in mind. His numbers:

"If really given a legal basis to be out and about in everyday life, and every liquor store and every retailer and it becomes mainstream, it could be a huge category, as much as 25% of the size of alcohol even."

  • In the dispensary channel, beverages were "like 1% of sales or less." Put them in liquor stores and supermarkets and demand appeared that "no one knew existed."
  • At the peak, some retailers in his network said hemp drinks were "20, 30% of their sales."
  • He sees "positive signals that at least we're going to get some level of extension." Recess CMO Zach Francis described the same back-and-forth on the Wharton show: regulators push the deadline out, then "they get a 30-day extension."

Why it matters: a 20-30% share of sales at some liquor stores was coming straight out of beer and wine. A hard ban on December 12 would return that shelf space to alcohol. A 5mg framework would keep the category alive but shrink its best value-per-dollar formats. Either way, the answer comes this quarter.

4. The formats that are dying, and the one that's still growing.

In the same Business of Drinks interview, Sherman summed up the shift in alcohol formats:

"The in-home cocktail mixing and making is on the decline dramatically. The full format spirits, the one liter, 750 bottles are on the decline. Why? Because people want convenience."

He said ready-to-drink cocktails "continue their 15% a year growth without any end in sight." People "do not want to go buy a big bottle of Jack Daniels and make their own mixture and put it in a flask." He also sees drinking moving toward fewer, bigger occasions ("the events, the concerts, the shows, the big nights out") and away from "daily consumption."

On Wharton Marketing Matters, "The Rise of Relaxation Beverages" (Sept 24, 2026), Recess CMO Zach Francis, formerly head of marketing at the RTD brand BeatBox, put it more bluntly:

"High ABV ready-to-drink cocktails are quite literally what is saving the alcohol industry. Like beer is in decline, wine is in decline, spirits are in decline. You look at like bourbon and whiskey... they're literally like stopping production because they can't sell the supply that they've created."

Treat that as an operator's color, not a statistic. But it describes a real problem: aged whiskey is laid down years before it's sold, so a demand slowdown shows up as too much stock in warehouses. That's the core issue for Brown-Forman (BF.B) (Jack Daniel's) and the whiskey side of Diageo (DEO) and Pernod Ricard.

On Taste Radio, "Do What The Others Won't. It's Why This Brand Works." (Sept 29, 2026), host Ray Latif traced the same premium ladder over six or seven years: hard seltzer, then vodka and tequila seltzers, then RTD cocktails, because "people are willing to pay for better products." Isamu Kamide, co-founder and CEO of the natural-wine brand Wonderwerk, described what young drinkers tell him: "maybe we don't want to drink a 16 ounce Modelo at a festival or maybe we don't want to have Hennessy at our parties anymore. We want something that's a little bit lighter." Those are two named brands, Constellation's (STZ) Modelo and LVMH's Hennessy, that a Gen Z buyer is choosing to skip.

5. Craft beer's closures now list "moderation" as a cause.

On The True Craft Podcast, "E134: Rethinking Taprooms, Pricing, and Portfolio Focus with Doug Veliky" (Sept 25, 2026), beer-industry analyst Doug Veliky, who has worked at both a wholesaler and a large brewery, walked through his widely shared "Top 12 Reasons Breweries Are Closing." He put them in time order, from roughly 2013 to 2025. The last and most recent one:

"The end is moderation. People are drinking less. People are mixing in non-alcoholic options. People are switching to lagers, more lower alcohol beers, avoiding the hangovers as much. You know, craft beer's core consumers getting older, they have kids now."

His practical point for distributors is that the long tail is gone. "Your fourth bestseller is no longer cutting it." Small breweries that sit in Molson Coors- or Bud-aligned distributor houses need one flagship worth marketing, like Allagash White, not a rotating list of beers.

The Debate

Bull: the decline is structural. This week's evidence builds a behavioral case more than a chemical one. Veliky lists moderation as the latest cause of brewery closures. Sherman and Francis both describe traditional formats (750ml bottles, home cocktails, aged whiskey) losing ground. Kamide hears young drinkers turning down Modelo and Hennessy by name. And the GLP-1 (weight-loss drug) drag keeps spreading. On InvestTalk, "The Weight-Loss Drug Boom Hits Its Middle Age" (Sept 23, 2026), host Luke Guerrero, a pundit rather than an insider, cited one in five U.S. households now including a GLP-1 user. He also cited analyst estimates of a 5-10% cut in calories among users, and 30 million users by 2030. He put "alcohol producers" in the group seeing "consumption patterns changing," and suggested "underweighting food and beverage companies" most exposed to appetite suppression.

Bear: the money moves, and so does the culture. The strongest counter this week was data, not opinion. If 94% of non-alc buyers still buy alcohol, and 90% of BERO's customers still drink, non-alc is adding to the drinking occasion rather than replacing it. Theriault's Gen Z buys less but buys premium, which is the "premiumization offsets volume" argument in plain words. Sherman added a point bulls usually skip: in states that legalized cannabis over the last decade, "you're not seeing a dip in alcohol consumption at all, particularly on-premise consumption." That suggests cannabis is "probably complementary" rather than a substitute.

The Brewbound team also offered a cultural bear case. Generations rebel against their parents, so the kids of today's non-drinkers may swing back. Their example: smoking rates were drilled down for millennials and Gen Z, "and you're starting to see them come up a bit now with the younger Gen Z." (That's a host's impression, not data they cited.)

My take: both sides agree the drinking occasion is getting smaller, more deliberate and more mixed. What's actually for sale is the formats: RTD cans, NA beer, premium single serves. Big-bottle spirits and craft long tails lose.

Read-Throughs

  • Spirits makers (BF.B, DEO, Pernod). Two separate voices, Sherman the investor and Francis the operator, described 750ml bottles and home mixing in decline and RTDs growing about 15% a year. The companies whose portfolios lean on aged brown spirits sold in full bottles are on the wrong side of that. Diageo and Pernod have big RTD and tequila businesses to lean on. Brown-Forman's exposure is more concentrated.
  • Distributors (Reyes, RNDC, Southern Glazer's, Breakthru). Sherman's message to new brands was "the sooner you can get away from self-distribution, the better." He also said "distributors are taking fewer [brands] than ever before" and "shelf space is shrinking for new brands." For wholesalers that means fewer, faster-selling SKUs: his rough bar for investing is $1,000 of sales per retail store per year. Veliky's flagship-first advice points the same way.
  • Non-alc and functional drinks. The category is growing, but some brands are failing. On CPG Week by BevNET & Nosh, "Sol-Ti's $30M Marks Win For Shots & Another Chef-Driven Meal Kit" (Sept 24, 2026), the hosts noted that "even as Athletic Brewing is booming," hop-water and NA brand Hoplark filed for Chapter 7 liquidation. They also flagged C4 Energy's "All Hopped Up," a beer-flavored non-alc energy drink with 200mg of caffeine, and called it "more of a gimmick." On the supply side, Consumer VC, "Why He Invests in the Factories, Not Just the Brands" (Sept 24, 2026) had Monogram Capital's Jared Stein (an investor) describe backing Olipop at about $1 million in revenue. Retailers, shoppers and co-packers were all saying the same thing: "we might need to add another line for this." His aseptic beverage plant, used for protein, coffee and dairy-style drinks, opened in mid-2023 at 330,000 square feet after signing about $800 million in contracted volume. It is "now fully out of capacity," with 250,000 more square feet about to be approved. Functional drinks are growing faster than factories can keep up.
  • The "calm" drink as an alcohol substitute. On the Wharton show, Francis said Recess is phasing out its CBD line at year-end. It's "around 1% of the business," and the brand moved away from CBD because it "is not getting federally legalized." Recess is now betting on magnesium and L-theanine drinks and a "Zero Proof" mocktail line, positioned as a "zebra striping and moderation brand, not a sobriety brand." Zebra striping means alternating alcoholic and non-alcoholic drinks. If hemp-THC gets capped, these legal "relaxation" drinks are the next option, though Brewbound's reporter was blunt that L-theanine and lion's mane "is not going to give you the same effect as low-dose THC."
  • Cannabis/THC and big alcohol. Sherman's point that alcohol didn't fall in legal cannabis states is the most useful counter to the substitution fear. From the cannabis side, policy analyst Anthony Traurig, on Planted with Sara Payan on Radio Misfits, "Planted – Anthony Traurig" (Sept 29, 2026), said it's "documented now that... big alcohol had a big hand in pushing" the federal hemp ban. He also warned the rule on THC levels during processing makes it effectively "illegal to produce even CBD isolate." That's an advocate's claim, but it shows how the ban is being framed as alcohol protecting its turf, which is different from last week's "big alcohol and big tobacco are in and they're hedging."
  • Bars and restaurants. Theriault sees non-alc cocktails as the on-premise opportunity. Bartenders can make something better than "orange juice mixed with some pineapple juice." That keeps the non-drinker spending at the table. BERO's "call brand" goal is the same idea for beer taps.
  • GLP-1 and nicotine. One clinical data point: on Office Hours with David Meltzer, "Office Hours | The Power of Better Information" (Sept 23, 2026), a GLP-1 prescriber who runs a telehealth practice (HelloDose), and so has a commercial stake, said: "I take people off alcohol, stop people from smoking using these medications." She said Ozempic "works much better in the brain" for addiction than Mounjaro, and that she herself stopped drinking on it. It's anecdote, not a trial. But it lines up with last week's VA study linking these drugs to lower nicotine-use disorder, and it's a risk to watch for Philip Morris (PM), Altria (MO) and BAT (BTI).
  • Nicotine pouches as a "vice" venture category. Sherman said Top Shelf has "done very well in nicotine and nicotine pouches, which are a cleaner variant of smoking cigarettes," and uses the same repeat-purchase test it uses for drinks. Venture money treating pouches like any other fast-selling consumer brand points to more challenger brands competing with Zyn, on! and Velo for c-store shelf space.

What Changed

  • Moderation got a hard "both, not either" number. Last week's number was 48% of Americans trying to drink less. This week's was 94% of non-alc buyers still buying alcohol, plus 90% of BERO drinkers. Taken together: lots of people are cutting back, and almost none of them are leaving the alcohol aisle.
  • The hemp-drink debate moved from "will there be a ban" to "what will the cap be." Last week the deadline was a vague "buzzsaw at the end of December." This week it was December 12, with a likely 5mg ceiling under any replacement framework, which would end the 10mg can and the multi-serve bottle.
  • The story about big alcohol and hemp flipped. Last week, incumbents were "hedging." This week a cannabis policy analyst said alcohol lobbied for the ban, and an investor said alcohol never lost volume to cannabis in the first place.
  • Spirits got named as the loser inside alcohol. Earlier issues talked about "alcohol" as one thing. This week an operator and an investor both separated growing RTD cans from shrinking full-bottle and aged-whiskey sales.