Club Soda's first-ever benchmarking report reveals a fast-growing industry investing in jobs, manufacturing and innovation, while highlighting the challenges that could shape its future.

New research from mindful drinking movement Club Soda has revealed that the UK's no, low and mid-strength drinks sector now generates an estimated £2.2 billion in annual turnover, providing the first comprehensive snapshot of the industry's economic impact.

The inaugural Benchmarking Report for the UK No, Low and Mid-Strength Drinks Sector brings together data from producers across the category to establish the first benchmark of a sector that has seen significant growth in recent years. Club Soda believes the £2.2 billion estimate is conservative, suggesting the market could be approaching £6 billion as the rapidly expanding mid-strength beer category becomes more accurately measured.

Among the report's key findings, participating producers employ more than 6,400 people and generate more than £172 million in annual turnover. The average business surveyed was founded in 2018, employs four people and has an annual turnover of around £500,000, highlighting the strength of the UK's growing independent drinks sector.

The research also found:

• 53% of businesses have secured external investment, with more than £38 million invested across the companies surveyed.

• 86% plan to expand production, with three quarters expecting to recruit additional staff.

• Businesses are currently operating at around 60% production capacity, indicating significant room for growth without major infrastructure investment.

• On average, 73% of production takes place in the UK, underlining the sector's contribution to British manufacturing.

The report points to an increasingly international outlook, with almost a third of producers already exporting to overseas markets. Europe and North America are the most common destinations, with exporting businesses generating an average of 40% of their sales internationally.

However, the findings also highlight a number of barriers facing the sector, including rising production costs, regulatory complexity and the need for greater consumer awareness. Producers identified tax incentives, research and development support, grants and proportionate regulatory reform as key measures that could help unlock further growth.

Federico Dellafiore, Portfolio Director for Food, Drink & Hospitality Week, said:

"The no, low and mid-strength category has become an increasingly important part of the drinks conversation, and this report provides valuable evidence of the investment and innovation taking place across the sector. At the same time, it shows that there is still considerable potential for growth, with businesses facing challenges around regulation, costs and consumer awareness that will need to be addressed.

"We're continuing to see interest from producers of all sizes, and these findings reinforce why it's important that the wider hospitality and retail industries stay engaged with how consumer drinking habits are evolving. It remains a developing market with plenty of opportunities still to be explored."

Club Soda plans to repeat the benchmarking exercise annually, creating an ongoing evidence base to track the sector's progress and support conversations with government, retailers, investors and the wider drinks industry.

The findings will also inform Club Soda's forthcoming policy recommendations for the UK no, low and mid-strength drinks sector, due to be published in September, setting out proposals to help support one of the UK's fastest-evolving drinks categories.