Yes, it's fermenting, but it's not the same fermentation as alcohol. It's a lactic acid ferment, which has a much lower alcohol content.

"The ancient Greeks understood that important chemical changes took place during this type of fermentation. Their name for this change was "alchemy." Like the fermentation of dairy products, preservation of vegetables and fruits by the process of lacto-fermentation has numerous advantages beyond those of simple preservation. The proliferation of lactobacilli in fermented vegetables enhances their digestibility and increases vitamin levels. These beneficial organisms produce numerous helpful enzymes as well as antibiotic and anticarcinogenic substances. Their main by-product, lactic acid, not only keeps vegetables and fruits in a state of perfect preservation but also promotes the growth of healthy flora throughout the intestine. Other alchemical by-products include hydrogen peroxide and small amounts of benzoic acid."

Many traditionally-fermented, low alcohol "soft" drinks were made with fruits and grains.

http://www.westonaprice.org/images/food_realthing4.jpg
Source(s):
http://www.westonaprice.org/foodfeatures/lacto.html

http://www.westonaprice.org/foodfeatures/Realthing.html

And the book Nourishing Traditions, which has a whole chapter on traditionally lacto-fermented drinks

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