Costco has officially entered the growing market for nonalcoholic cocktails by introducing Hiyo’s Sunset Party Pack in its warehouses across the United States. This product launch marks a notable shift for the wholesale retailer, which has historically followed trends rather than set them. The Sunset Party Pack features an 18-count assortment of Hiyo’s top flavors: Blackberry Lemon, Peach Mango, and Passion Fruit Tangerine. Each drink aims to provide a “mood-enhancing, stress-relieving lift,” according to the brand.
Nonalcoholic Beverages Gain Popularity
The rise of nonalcoholic cocktails, spirits, and beers has been driven by changing consumer preferences. According to Sherry Frey, vice president of wellness at NielsenIQ, there is an increasing awareness of the functionality of ingredients among consumers. The global nonalcoholic cocktail market was valued at approximately $1.3 billion in 2024 and is projected to reach $5 billion by 2035, reflecting a robust compound annual growth rate (CAGR) of 13%.
A recent report from Allied Market Research highlights that the nonalcoholic spirits segment is anticipated to nearly double from $325.8 million in 2023 to $706.7 million by 2033, as consumers increasingly seek premium flavor profiles without alcohol. The broader category of nonalcoholic beverages, which incorporates zero-proof cocktails and functional drinks, is expected to grow from $1.3 trillion in 2023 to $2.9 trillion by 2035.
Costco’s Strategic Merchandise Selection
Costco’s entry into the nonalcoholic beverage market is part of a broader initiative to expand product offerings. The warehouse club has previously tested similar products, such as Edna’s Non-Alcoholic Cocktail Co. drinks in select Canadian locations and The Tinley Beverage Company’s ready-to-drink cocktails in a limited number of U.S. warehouses. The new partnership with Hiyo appears to be more expansive, aiming to introduce a wider audience to nonalcoholic options.
Bob Nelson, senior vice president of financial planning and investor relations at Costco, explains that the company focuses on delivering the highest quality products at the lowest prices. With only about 3,800 items available per warehouse, Costco maintains a stringent selection process to ensure that every product meets its quality standards. Nelson noted that the company prioritizes operational excellence when evaluating merchandise, working closely with vendors to provide floor-ready products.
The launch of Hiyo’s Sunset Party Pack aligns with the growing trend of wellness and sober curiosity among consumers. As more people seek healthier lifestyle choices, nonalcoholic options are becoming increasingly popular in retail and hospitality sectors.
While the rise of functional beverages comes with potential health benefits, experts advise caution. Joe Zagorski, a toxicologist at the Center of Research on Ingredient Safety at Michigan State University, emphasizes the importance of moderation. He notes that while these beverages may offer health claims, the science behind them can be inconclusive, and consumers should be mindful of their consumption.
Costco’s strategic move into the nonalcoholic space reflects changing market dynamics and consumer preferences, positioning the retailer as a player in the evolving beverage landscape.
