Root Beer Market - Forecast(2023 - 2028)

Key Takeaways

• The North America Global Root Beer Market accounted for the highest revenue share in 2021. The growth is owing to high demand as the drink is native to the region, high GDP per capita, independent lifestyles of millennials, better retail network, and the high number of bars and nightclubs.
• The growing trend of nightlife in developing countries with heightening western influence, rising disposable incomes, several flavor options, low ABV content, and augmenting number of bars and nightclubs are said to be preeminent drivers driving the growth of the Global Root Beer Market. Deteriorated production and supply chain and excess health complications of root beer consumption reduce market growth.

• Detailed analysis of the Strength, Weaknesses, and Opportunities of the prominent players operating in the market will be provided in the Global Root Beer Market report. 

Root Beer Market Segment Analysis-By Type

The Global Root Beer Market, based on type, can be further segmented into alcoholic and non-alcoholic drinks. The non-alcoholic segment held the largest share in 2021. The growth is owing to exceptional taste and enlarging demand by millennials. Non-alcoholic beverages have been thrust into the limelight in America since the 19th century’s prohibition period. The root beers are generally non-alcoholic and deemed soft drinks as they contain little to no alcohol by volume content of around 0.5 to 2 percent.

Nevertheless, the non-alcoholic segment is estimated to be the fastest-growing segment, with a CAGR of 5.5% over the forecast period 2022-2027. This growth is owing to authenticity and lower chances of health complications than alcoholic root beers. Moreover, non-alcoholic root beer can help alcoholics sublimate their cravings for alcohol because both alcoholic and non-alcoholic share the same aroma and taste. It is impossible to differentiate both from one another.

Root Beer Market Segment Analysis-By Distribution Channel

The Global Root Beer Market, based on distribution channel, can be further segmented into Off-trade facilities (Specialty stores, Supermarkets, liquor shops, and e-commerce), On-trade channels (restaurants, hotels, bars, clubs, and others). The off-trade segment held the largest share in 2021. Off-trade channels like liquors shops enjoy a monopoly in underdeveloped areas due to the lack of adequate infrastructure where e-commerce and modern retail outlets like supermarkets cannot function. Moreover, supermarkets and specialty stores have across-the-board existence in urban areas, and busy shoppers always prefer these outlets as they offer a one-stop solution. In addition to that, they also extend discounts and other luring schemes that act as a potent trigger.

Nevertheless, the Off-trade segment and on-trade are estimated to be the fastest-growing, with a CAGR of 5.7% over the forecast period 2022-2027. This growth is owing to the resumption of services by on-trade channels as the pandemic is almost eradicated. Additionally, the ameliorating infrastructure of both on-trade and off-trade facilities in densely packed low-income countries is supplementing the market growth.

Root Beer Market Segment Analysis-By Geography

The Global Root Beer Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. North America held the largest share, with 36% of the overall market in 2021. The growth in this segment is owing to the factors such as deep-rooted infrastructure of on-trade and off-trade facilities, a high number of bars and nightclubs in developed countries like Canada and the US, the increased popularity of root beer is native to the region, the increased trend of beer consumption among millennials, appealing disposable income, and easy-going environment and rules when it comes to beer consumption are the prominent factors propelling the market growth in the said region. However, Asia-Pacific is expected to be the fastest-growing segment over the forecast period 2022-2027. This growth is owing to proliferating population, a high number of young people, augmenting western-influence among youngsters, improving disposable incomes with spiraling economic affluence. In addition to that, ameliorating infrastructures such as the presence of cafes, appealing bars, and nightclubs are other factors gravitating people toward them. In addition, mounting demand for drinks with very low alcohol by volume content has its fair share behind the increasing popularity of root beer.

Root Beer Market Drivers

Growing living standards because of rapid migration and better GDP per capita, the availability of various flavors is anticipated to boost market demand.

As of 2022, more than 50 percent (4.46 billion) of the world's population resides in urban areas. Nevertheless, 2/3rd (over 6 billion people) of the total world population is projected to migrate toward cities by 2050. With growing urbanization, people's living standards improve, making more demand for soft drinks like root beers. Also, growth in per capita in developing countries has its fair share in supplementing the market's growth above. For instance, compared to 2020, Indonesia’s GDP per capita in 2022 has grown to $4500 from $3920, whereas China's GDP per capita reached over $12,000 in 2021. In addition to that, the availability of tons of flavors has drawn the attention of millions across the globe.

The growing trend of nightlife and expanding presence of breweries, nightclubs, and pubs are expected to boost market demand.

According to a recent report, with a 1.3% expansion in 2021, the number of liquor stores in the US reached around 43000; moreover, with a slight increase from the previous year, the number of breweries in the US came to over 9000 in 2021. A report claimed that there are more than 60,000 bars and nightclubs in the US as of 2021. The number is expected to increase further in the foreseeable future. In addition to that, the growing trend of nightlife among the younger generation in both developed and developing worlds has its fair contribution to driving the market forward.

Root Beer Market Challenges

As root beer includes a high amount of sugar, it may compromise people’s health and set severe health complications such as insomnia and tooth decay in motion. Due to a high amount of high fructose corn syrup (HFCS), root beer leads to diabetes and weight gain. According to International Diabetes Federation, in 2021, there were nearly 537 million cases of diabetes; moreover, patients are likely to reach 643 million by the year 2030. Therefore, people are turning more health-conscious and avoiding the drinks like root beer. Furthermore, mercury in HFCS deteriorates the body's immune system and crucial organs. The presence of sweeteners like Aspartame leads to rapid mood swings, irritation, and depression. In addition to that, several studies have proven that the caramel color of root beer causes life-threatening complications like cancer.

Root Beer Industry Outlook:

Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies for players in the market. Global Root Beer market top 10 companies include-

1.  Keurig Dr. Pepper Inc
2. Boylan Bottling
3. Best Damn Brewing co
4. Rhineland Brewing Co
5. Sprecher Brewing Co
6. Berghoff Beer
7. Blitz-Weinhard Brewing Co
8. The Dad's Root Beer Company
9. Anheuser-Busch InBev
10. Mill Street Brew Hall

Recent Developments

• On October 27, 2021, Wisconsin, United States-based brewing company “Sprecher Brewing” announced that it had successfully acquired six soda brands from a US-based WIT Beverage company. The company did not disclose the financials of the deal. In addition to that, the transaction has added WBC craft Soda, Black Bear, Green River, and 3 Others to Sprecher’s portfolio; moreover, the acquisition has expanded the companies’ presence outside the Midwest.
• On September 30, 2020, Leuven, Belgium-based well-known drinks and brewing firm “Anheuser-Busch InBev” announced the successful acquisition of Oregon, United States-based brewing company “Crat Brew Alliance.” Anheuser has bought nearly 68.8 percent of the majority stake in Craft Brew Alliance.
• On August 7, 2019, Anheuser-Busch InBev (a Belgium-based multinational brewing company) publicized that it had successfully acquired Ohio, United-States-based renowned beer manufacturer “Platform Beer Company.” The company did not disclose the financials of the acquisition.

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