Italy’s Dealcoholized Wine Output Is Set to Surge

Italy’s dealcoholized wine sector is expected to expand sharply in 2026, with production projected to rise 90% as producers in Veneto and other regions move to meet growing demand in export markets, according to an analysis by the UIV-Vinitaly Observatory.

The forecast points to a fast-changing corner of the wine business that remains small but is drawing more attention from retailers, importers and consumers looking for alcohol-free options. The category, often grouped under the No-Lo label for no- and low-alcohol drinks, has been gaining ground in markets including the United States, the United Kingdom and Germany. In 2025, those markets generated more than €1.2 billion in retail sales, equal to about 160 million bottles, according to the report cited by Wine-Intelligence.

Italy entered the segment later than some of its European neighbors because of regulatory delays, and domestic production only began recently. That left the country with an estimated market share of about 2.5%, far behind Germany and Britain. But Italian wineries are now trying to catch up. In a survey of producers developing dealcoholized wine lines, 91% of expected output was tied to exports, while 77% of sales were expected to move through retail channels. About half of the wineries surveyed said they planned to start or expand production inside Italy, suggesting a shift from a mostly export-driven model toward a broader domestic base.

Veneto appears to be at the center of that effort. The region has become a key hub for wine processing and bottling, and its role in dealcoholized wine reflects both industrial capacity and access to established supply chains. Producers there are investing in technology that removes alcohol while trying to preserve aroma and structure, a process that remains one of the main technical challenges in the category.

The market is also changing in what it sells. Alcohol-free wines now make up 54% of offerings, while wine-based beverages have grown from 3% in 2025 to 27% today, according to the observatory’s findings. That shift suggests that consumers are increasingly choosing products positioned as fully alcohol-free rather than lower-alcohol alternatives. The trend is strongest in sparkling wines, which have outperformed still wines in several markets.

In the United Kingdom, overall No-Lo wine sales rose 24%, while Italian products grew 17%. In the United States, overall growth reached 15%, and Italian dealcoholized wines increased by 200%, according to the report. Those numbers point to stronger acceptance abroad than at home, especially in settings where sparkling wine already has a place at celebrations and social gatherings.

Health concerns remain the main reason consumers choose dealcoholized wine, but moderation and lifestyle choices are becoming more important as well. Better product quality and greater awareness of the category are also helping sales. Still, taste remains a barrier for 25% of potential buyers, showing that producers still need to improve flavor and mouthfeel if they want to win over traditional wine drinkers.

Younger consumers appear more open to the category than older ones. In markets such as Britain and the United States, Generation Z shoppers are showing more interest in alcohol-free wine than beer in some situations. That shift matters for producers looking for long-term growth, since younger drinkers may shape demand over time.

Italy’s domestic market remains difficult to crack. Traditional wine culture still dominates drinking habits, and many consumers have not embraced alcohol-free alternatives. The report said 94% of non-alcohol consumers had not bought alcohol-free beverages in the previous six months, rising to 98% among younger consumers. Driving was cited as the main reason for choosing alcohol-free drinks, at 50%, increasing to 56% among younger consumers.

Restaurants have also been slow to adopt the category. In a separate Fipe-Uiv “Wine & Catering” Observatory survey, 71% of restaurants said they were not interested in listing dealcoholized wines, and only 3% had successfully added them to their offerings. That leaves retail as the main channel for growth in Italy for now.

For producers, the outlook is mixed: strong demand abroad, limited traction at home and a need for continued investment in technology and marketing. If the projections hold, 2026 could mark an important step for Italy’s role in a segment that is still small but moving quickly across global wine markets.