The onset of “Dry January,” a month when many people don’t drink alcohol, usually brings an increased level of attention to non-alcoholic beverages. But the CEO of one of the leading non-alcoholic beer companies said demand for non-alcoholic beers has been booming for well over a month.
“This is the moment we’ve been waiting for in this category,” Athletic Brewing CEO Bill Shufelt said on CNBC’s “Squawk Box” Wednesday.
Long a sleepy category within the broader beer industry, non-alcoholic beer has seen rapid growth in recent years, just as bigger beer giants like it AB InBev Spirit Heineken Introduction of new products as well as the emergence of independent breweries such as Athletic Brewing. AB Inbev, which owns brands such as Budweiser, Corona, Michelob and Modelo, had previously set a goal of making 20% of its beer volume alcohol-free and low-alcohol by 2025.
The lack of quality non-alcoholic beer options was the impetus for Shufelt, a former trader at Steve Cohen’s Point72 Asset Management, to start the Connecticut-based company in 2017, which focuses solely on non-alcoholic brewing.
“[Non-alcoholic beer] has gone from something that was .3% of the beer category and a total afterthought and penalty box drink to something that’s really exciting, ambitious and kind of redefining how modern adults think,” Shufelt said.
Shufelt said non-alcoholic beers now make up more than 2% of all beers sold in US grocery stores, and at some national retailers it’s over 8% of their beer category.
Beer cans are packed at Athletic Brewing’s non-alcoholic brewery and manufacturing facility in Stratford, Connecticut on March 20, 2019.
Spencer Platt | Getty Images
Growth of the non-alcoholic beer category
As more consumers turn to alcohol-free beers for healthier drinking alternatives and safer drinking habits, the global alcohol-free beer market has grown to $22 billion in 2022, projected to reach $40 billion by 2032, according to GMI Insights could. Alcohol-free beer in the US grew 20% in US dollars last year, according to Nielsen.
Yet non-alcoholic beer makes up only a small percentage of the total global beer market, valued at more than $750 billion.
But the growth of the parent category has helped Athletic Brewing, which has a 55% market share of alcohol-free craft beer, according to Shufelt. Athletic Brewing had revenue of $37 million in 2021, a three-year revenue growth of 13.071%, according to Inc. Magazine.
In November, keurig dr pepper invested $50 million in Athletic Brewing and received a minority stake, similar to the brewery’s other major investors such as TRB Advisors and Alliance Consumer Growth. 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 and helps the brewing company “be a fully differentiated non-alcoholic beer maker,” Shufelt said.
“It’s an investment that nobody else is making in this category, so Athletic is really moving it forward,” Shufelt said. “We’re overtaking the biggest of the big brands in the overall category and we’re on track to be number one overall this year.”