There are indeed religious connotations with why we use alcoholic beverages (i.e. the mead of inspiration, and the tale that explains its origin), that being said I think both our Gods and ancestors know that we can't always use such. Perhaps we're simply at an impasse, where we don't have access to alcoholic beverages for whatever reason, any libation and offering given with respect will be recognized. I don't think we're going to get a snubbed nose at anything, unless we make offerings complacently, and with little thought and care given to it.
Perhaps there exists some sort of medical or legal reason why we do not do so. It may be a case that there's something in it your allergic too, or it may cause a bad reaction to medication you're on, you may be pregnant and deciding to honor the latest wisdom that one shouldn't imbibe while pregnant. Maybe you're just sick and courteously don't want to spread your contagion to others. Alcoholism is defined as an illness by many, and I don't think our Gods or ancestors would have us do anything that risks our overall health.
So in my mind when need presents itself, substitutions of drink are acceptable. The important thing is that our rituals are designjed to share, bind and link. There are symbolic reasons behind sharing a communal horn (as it's a physical link to the metaphysical and symbolic connection to the well and through the act ties the communal threads of our wyrd, orlog and hamingja between us, the Gods, the ancestors, and our kindred.
Kissing the horn, touching it reverently, or even just holding it up to give it a little nod to the Gods can work in a pinch. However, if this person becomes a regular member of your kindred, based on our traditions, I'd say you need to go to some sort of communal drink all may have and share. At least that's my own opinion on the symbolism behind the sharing of the drink that ties our wyrd/orlog/hamingja (if I'm spelling that right) together.
I've known of one group, who gave alcoholic drink to the Gods/ancestors in a separate bowl during rite, but no one in the group imbibed anything alcholoic. As soon as the rite was over, the drink would be deposited at the designated place outside.
Really what you need to do is balance things and find what is the best solution for your group, considering everything from is this a one time visitor, or is this someone who may potentially become a long-term member? Ultimately, the best way to decide is to talk frankly with both your kindred members to see what their opinions are on the matter, and to talk to the recovering alcoholic in question to see what s/he is able to handle and does not think it will prove a problem.
Among some of the other responses posted to this initial question were a couple of folks who were recovering alcholics (well one claimed to be recovered). Both (one more eloquently than the other) said that certain members of the community actually helped them detach themself from the mindset that alcohol equates booze and profane drinking, to having the alcoholic drink in a horn used in a ritual setting as something that was sacred and so today they do take a modest sip in ritual when the horn reaches them. Makes me wonder if there is a similar attitude among some recovering alcoholics who take Catholic communion.
Another group brought out the point that kissing the horn still can work symbolicly with the communal need for drinking, because the act of kissing, lips touching a shared thing is still intimate.
Anyway, I felt like sharing my rambling thoughts, as all too often I think there is a misperception among outsiders that Asatru is not a serious religion that truly does honor and treats our Gods and Ancestors with a concept of the sacred. It's not at best a nominal excuse for a kegger, where we also thump our chests with neanderthal grunts and war-crys as we discuss, demonstrate and display our warrior prowess and mad death-frenzy skills. RAWR!