Root Beer Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, Canada, UK, Germany, France - Size and Forecast 2024-2028

Root Beer Market Size 2024-2028

The root beer market size is forecast to increase by USD 143.6 million, at a CAGR of 4.28% between 2023 and 2028. Market expansion hinges on a multitude of factors, with significant influences including the burgeoning global beer market, reflecting evolving consumer tastes and preferences worldwide. Additionally, the increasing demand from millennials, a demographic known for its penchant for exploration and variety, fuels market growth by driving innovation and diversification within the beverage industry. Furthermore, the emergence of low-ABV cocktails addresses evolving consumer lifestyles and preferences for healthier options, contributing to the expansion of the market by catering to a broader audience base. These factors collectively shape a dynamic market landscape, where the interplay between consumer trends, demographic shifts, and product innovation propels the growth and evolution of the beverage sector. It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.

What will be the Size of the Market During the Forecast Period?

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Market Dynamic and Customer Landscape

The market continues to expand with a wide array of offerings catering to diverse consumer preferences. Traditionally brewed with roots, herbs, berries, and barks, modern variations often incorporate synthetic sassafras tastes to comply with regulations. Widely popular as a carbonated soft drink, root beer appeals to both non-alcoholic and low-alcoholic beverage consumers. Key players target various channels, including the foodservice market, supermarkets, hypermarkets, and online sales, to reach consumers. While restaurants, hotels, and liquor shops offer diverse selections, specialty stores and departmental stores provide a curated range of root beer options. Variants such as alcoholic root beer and non-carbonated versions are gaining traction, leveraging ingredients like sassafras root bark, wintergreen leaf, and honey to offer unique flavor profiles in the ever-evolving root beer landscape. Our researchers analyzed the market research and growth data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The emergence of low-ABV cocktails is notably driving market growth. Low-alcohol beverages are driving the global alcohol drink market as consumers have become more health-conscious. Many consumers are substituting hard drinks with light drinks. In addition, they also read the nutritional labels on products and demand those that contain lower alcohol content. Root beer, an excellent carrier of flavor, is often used by bartenders and home drinkers to bring out the flavor and depth of a drink without using high-ABV spirits or mixing them with fruit juices. Thus, the emergence of cocktails is helping the global market grow at a fast pace.

Furthermore, root beer is usually used in classic cocktails. Millennials are gradually rediscovering these cocktails with the comeback of Italian cocktails like the Negroni and the Americano. Currently, it is also increasingly used in modern craft cocktails. Bartenders in pubs and bars across several countries are introducing new cocktail recipes based on this beer. Thus, factors like these are expected to drive the growth of the global market during the forecast period.

Significant Market Trend

The increasing prominence of root beer floats is an emerging trend in the market. The increasing prominence of floats among consumers will have a positive impact on the growth of the market during the forecast period. This trend has become popular among consumers. Some of the popular floats include Bailey float, Barbarian, Black and Brown, Dirk Diggler, and others.

Furthermore, the practice of using the drink with ice creams to make floats is also growing. Non-alcoholic root beer is one of the popular drinks among children in the US. These floats are prepared by mixing vanilla, chocolate, or other flavors of ice creams with the drink. Moreover, alcoholic floats are becoming popular among adults, which will also have a positive impact on the growth of the market during the forecast period.

Major Market Challenge

The low awareness and the lack of a standardized definition of quality are major challenges impeding the market growth. Root beer is still relatively unknown to the masses. Building brand loyalty and adopting new brands takes almost 2-3 years. If new and smaller manufacturers want this to change, they need to invest on a large scale. Currently, many new players are introducing marketing initiatives to highlight their offerings. However, it will still take some time to become popular among the masses.

Additionally, one of the major challenges for the regulators of this market is the lack of a standardized definition of quality for the drink. With the increasing popularity, regulatory bodies are expected to come up with a standardized definition during the forecast period. Therefore, the low awareness and the lack of a standardized definition of quality are expected to hamper the growth of the global market during the forecast period.

Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

Market Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

AleSmith Brewing Co. - The company focuses on handcrafted ales prepared in a variety of styles. The key offerings of the company include root beer such as San Diego State Ale.

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Anheuser Busch InBev SA NV
• Beerwulf BV
• BrewDog Plc
• Cloudwater Brew Co.
• Diageo Plc
• East 9th Brewing Co.
• Forbidden Root Restaurant and Brewery
• Iconic Brewing Co.
• Keurig Dr Pepper Inc.
• Kirin Holdings Co. Ltd.
• Mikkeller APS
• Mission Brewery
• Molson Coors Beverage Co.
• Saranac Brewery
• Sprecher
• Stone Brewing Co. LLC
• Swinkels Family Brewers
• The Boston Beer Co. Inc.
• Wild Beer Co.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segmentation 

The market share growth by the decaffeinated segment will be significant during the forecast period. With the increasing awareness of the harmful effects of consuming caffeine, the demand for and sales of decaffeinated products will remain high during the forecast period. 

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The decaffeinated segment was valued at USD 452.80 million in 2018. Players operating in this space are coming up with decaffeinated products to cater to the demand of consumers. Most of the new products launched in recent times are decaffeinated. The majority of contemporary variations are caffeine-free. Other types of soda caffeine come from kola nuts, a nut that is frequently utilized in carbonated beverages. The caffeine stimulation comes from the kola nut. However, filtered water, sugar, and sassafras extract are now used in current recipes. These are merely a few basic elements, although they may differ based on the particular brand. Thus, with the increasing demand for decaffeinated products is expected to drive the growth of the segment in the global market during the forecast period.

Regional Analysis

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North America is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The US and Canada are the leading countries in the market in North America. The growing number of breweries in the country is driving the growth of the market in the US. For instance, the number of craft breweries that serve the drink in the US increased from 6,661 in 2017 to 8,275 in 2019. Thus, the presence of key companies and the rising number of breweries in the region will drive the growth of the market in the region during the forecast period. Moreover, companies are strengthening their market presence by launching new products and opening new breweries in the region. The launch of new flavors of the drink in the region will also increase consumption which will propel the growth of the market in the region during the forecast period.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Product Outlook 
  • Decaffeinated
  • Caffeinated

• Distribution Channel Outlook
  • Off-trade
  • On-trade

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

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Market Analyst Overview

The market is evolving with a blend of tradition and innovation, offering a variety of options to consumers. Root beer, traditionally brewed with ingredients like sassafras tree and volatile oils, has adapted to modern tastes with artificial flavors and sweeteners, catering to the demand for carbonated soft drinks. Craft root beer and artisan beers have gained popularity alongside traditional varieties, offering unique flavor profiles enriched with ingredients such as anise, sarsaparilla, and black cherry bark. The market caters to diverse preferences with non-alcoholic beverages and low-alcoholic varieties, appealing to health-conscious consumers. Root beer enthusiasts can enjoy classic combinations like root beer floats with vanilla ice cream, while health-conscious options feature plant sterol supplements and gluten-free formulations. With distribution channels spanning from supermarkets to e-commerce platforms, the root beer market continues to thrive, resonating with consumers seeking nostalgia and innovation in their on-the-go beverages.

Further, the market is a vibrant segment within the beverage industry, offering a diverse range of options to consumers. Modern root beers are crafted with a blend of ingredients, including root spice, vanilla extract, cinnamon, and licorice root, resulting in unique flavor profiles. Recipes often feature botanicals like smilax medica plant and sweet birch, contributing to the beverage's distinctive taste. However, concerns arise from the presence of safrole, a potential carcinogen found in traditional root beer ingredients. To address health-conscious consumers' preferences, manufacturers offer sugar-free and low-sugar options sweetened with artificial sweeteners or molasses. The market caters to a wide demographic, including teenagers seeking non-alcoholic varieties and those reminiscing about the prohibition period and opting for alcoholic versions. Distribution channels span from supermarkets and hypermarkets to clubs and coffee shops, reflecting the beverage's popularity across various settings and demographics. As health and wellness awareness grows, root beer continues to evolve, adapting to changing consumer preferences and dietary trends.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market report during the forecast period
• Detailed information of market analysis and report on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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