As the alcohol industry braces for what some executives are calling its “tobacco moment,” there is a quieter but potentially more transformative conversation to be had—not about prohibition or polarisation, but about the rights of consumers to make better choices. The Financial Times’ recent coverage of how major alcohol groups are countering public health concerns highlights the growing tension between regulators and producers. But there’s a more promising path forward: the rapid emergence of the functional drinks sector.

While the WHO’s hardline stance on alcohol—claiming “no safe level”—has sent tremors through the industry, framing the issue as a binary choice between abstinence and alcohol is a false dichotomy. A third category is growing in prominence: low and no-alcohol functional drinks that deliver benefits beyond alcohol, offering consumers smarter, safer, and more socially adaptive options. This is not a threat to the alcohol industry—it is an opportunity.

“Alcohol plays an important part in the social life of so many people and we are not here to knock alcohol,” says David Orren, CEO of GABA Labs. “We’re here to expand the playing field—offering consumers more ways to socialise, and giving producers more tools to respond to shifting health and lifestyle priorities.”

“Alcohol has played a central role in human culture for millennia—bringing people together, fuelling creativity, enabling celebration,” says Professor David Nutt, co-founder of GABA Labs and former Chair of the UK Government’s Advisory Council on the Misuse of Drugs.“We fully recognise the benefits it confers in social settings. What we’re doing is building on that heritage to create something that offers the same upsides, but with a significantly better health profile—more appealing to today’s health-conscious consumer.”

Consumption data tells a compelling story: most consumers of low and no-alcohol products are not quitting alcohol altogether. Instead, they’re moderating, mixing and matching depending on the occasion. Whether for weekday socialising, wellness routines, or post-exercise recovery, functional beverages—those infused with mood-enhancing compounds like GABA enhancers, adaptogens, or nootropics—create an entirely new use-case: drinks for how you want to feel, not just what you want to escape from.

“Functional drinks are helping consumers rebalance,” says Orren. “Like choosing a beer on Friday night, and a GABA-enhancing drink on Monday. That kind of dual-track behaviour is creating a space where both traditional and alternative producers can thrive.”

The Financial Times' intervention rightly notes the unease among alcohol producers about the parallels with Big Tobacco. But there is a crucial difference: tobacco companies largely failed to embrace alternatives like vaping until it was too late. Shares in British American Tobacco have seen a sharp decline since 2017, and the conglomerate anticipates a $6.3 billion bill to settle an ongoing lawsuit in Canada this year. Altria’s share price has stagnated as smoke-free product uptake lagged behind competitors. This refusal to adapt to changing consumer habits cost them both market share and moral licence.

Alcohol companies still have the chance to lead, not lag, in innovation. By investing in and collaborating with functional drink brands—rather than treating them as outsiders—established producers can future-proof their portfolios, regain public trust, and align themselves with consumer health trends.

“This isn’t about displacing alcohol,” notes Orren. “It’s about creating real freedom of choice. We've had positive outreach from established alcohol producers. If we get this right, we’ll see better health outcomes without economic contraction.”

As the UN, WHO, and national governments consider tighter regulations on alcohol, the functional drinks category offers a vital middle ground. It speaks not only to risk reduction but to the positive experiences consumers are looking for: enhanced sociability, improved mood, better sleep. These are needs alcohol has traditionally met—but no longer exclusively.

The path forward lies not in defensiveness or denial, but in diversification. The functional drinks space represents a win-win for consumers and for producers: it reduces the societal harms of overconsumption while enabling producers—legacy or new—to innovate and grow.

“We’re in an age of empowered consumption,” Orren concludes. “Let’s meet people where they are—not with fear, but with better options.”