Sioux Falls Bars Add Nonalcoholic Drinks

SIOUX FALLS, S.D. — Bars and breweries in Sioux Falls are adjusting their drink menus as demand grows for nonalcoholic beverages and alcohol alternatives, a shift that reflects changing habits among American consumers and new pressure on businesses to decide what belongs in limited cooler space.

The trend has been building for several years, according to industry data cited by local operators. IWSR, a global drinks data provider, says the United States added about 37 million new consumers of nonalcoholic drinks between 2022 and 2024. At the same time, Gallup polling shows alcohol use has fallen to a new low, with 54% of Americans saying they drink.

For some bar owners, the change is tied to health concerns, tighter household budgets and shifting social habits among younger adults. Jon Oppold, co-owner of Orion Pub, said people are paying more attention to wellness and are also more cautious about spending.

“People are getting more health-conscious,” Oppold said. “I think the economy hasn’t been great lately and when people don’t have discretionary income, going out to the bar is usually one of the things that kind of falls by the wayside.”

Oppold said he also thinks younger adults may be less attached to bars as a default social setting than earlier generations were, in part because they grew up with smartphones and different patterns of socializing.

In response, local bars and breweries have added more nonalcoholic choices, including N/A beer, hop water, soda and kombucha. Some of those drinks were even entered into Downtown Sioux Falls’ Mash Madness competition last month. Businesses have also seen more interest in THC drinks, which are treated as a separate category from traditional beer and spirits.

Scott Heckel, owner and head brewer at Severance Brewing Company, said his taproom has not seen a major shift away from alcohol overall, but it has expanded its offerings.

“I can’t say that we’ve necessarily seen a big shift to N/A in the taproom itself,” Heckel said in a statement to Dakota News Now. “We do offer house-made root beer and dry-hopped lemonade, along with N/A beer and hop waters from other breweries. The biggest shift we’ve seen has been in alcohol-alternative drinks like THC seltzers, but again, we get those from an Iowa company.”

The future of THC beverages remains uncertain because Congress could move toward federal regulation or a ban. For now, though, business owners say they want customers to have choices so they can still gather together even if they are not drinking alcohol.

Oppold said that role is central to what bars do.

“To be able to provide them with options that can kind of make it accessible for everyone, whether or not you drink alcohol or you don’t, I think that that’s very important,” he said. “We like to have a welcoming environment here and part of having a welcoming environment is having options for everyone.”

That has left operators balancing customer demand against shelf space and inventory costs. Oppold said distributors regularly pitch new products, but bars ultimately rely on sales data to decide what stays on the menu.

“There’s only so much cooler space,” Oppold said. “We kind of defer to the sales numbers to see what stays and what goes.”