The start of “dry January,” a month when many people avoid drinking alcohol, usually draws attention to soft drinks. But the CEO of one of the leading non-alcoholic beer companies said that the demand for soft drinks has been growing for months.
“This is the moment we’ve been waiting for in this category,” Bill Schufelt, CEO of Athletic Brewing, said on CNBC’s “Squawk Box” on Wednesday.
Long a sleeper category in the broader beer industry, non-alcoholic beer has grown rapidly in recent years, with major beer giants such as AB InBev and Heineken launching new products and the emergence of independent breweries such as Athletic Brewing. AB Inbev, which owns brands such as Budweiser, Corona, Michelob, and Modelo, has previously set a goal of making 20% of its beer volume non-alcoholic and low-alcohol by 2025.
The lack of quality non-alcoholic beer was the impetus for Schufelt, a former trader at Steve Cohen’s Point72 Asset Management, to found a Connecticut-based company in 2017 that focuses exclusively on non-alcoholic brewing.
“[Non-alcoholic beer] has gone from something that was 0.3% of the beer category and completely an afterthought and a penalty drink to something that’s really exciting and inspiring and kind of redefining the way modern adults think,” Schufelt said.
Schufelt said that non-alcoholic beer now accounts for more than 2% of all beer sold in U.S. grocery stores, and in some national retailers it is more than 8% of their beer category.
The growth of the non-alcoholic beer category
With more and more consumers choosing non-alcoholic beer in search of healthier alternatives to alcohol consumption and safer habits, the global non-alcoholic beer market grew to USD 22 billion in 2022, according to GMI Insights, which forecasts that it could reach USD 40 billion by 2032. According to Nielsen, non-alcoholic beer in the US grew by 20% at retail last year.
Still, non-alcoholic beer represents a small percentage of the total global beer market, which is estimated at more than $750 billion.
But the growth of the overall category has helped Athletic Brewing, which Schufelt says has a 55% share of the craft non-alcoholic beer market. According to Inc. Magazine, in 2021, Athletic Brewing’s revenue amounted to $37 million, an increase of 13,071% in three years.
In November, Keurig Dr. Pepper invested US$50 million in Athletic Brewing, taking a minority stake in the company, along with other leading brewery investors such as TRB Advisors and Consumer Growth Alliance. To date, Athletic Brewing has raised more than $175 million.
This latest investment allows Athletic Brewing to invest in its Connecticut and San Diego facilities, helping the brewery “to be a completely differentiated producer of non-alcoholic beer,” said Schufelt.
“It’s an investment that no one else is making in this category, so Athletic is really driving it forward,” Schufelt said. “We’ve overtaken the biggest of the big brands in the overall category, and this year we intend to be the number one player.”