The largest non-alcoholic beer model within the U.S. simply acquired extra precious thanks partly to Gen Z’s efforts to make sobriety cool.
Athletic Brewing, cofounded by hedge fund dealer turned chief government Invoice Shufelt in 2018, practically doubled its valuation to about $800 million in simply two years following a $50 million fairness financing spherical led by development fairness agency Normal Atlantic, the Wall Road Journal reported, citing folks conversant in the matter.
A spokesperson for Athletic stated the corporate couldn’t verify or deny the brand new valuation.
The corporate will use the brand new financing to develop its staff and fund renovations at its third U.S. brewing facility positioned within the San Diego space, Shufelt stated in an e mail to Fortune. The brand new facility will enable the corporate to double its brewing capability within the U.S. Shufelt stated.
The upstart firm has punched above its weight, beating out established names like Heineken and Budweiser to assert the title of the highest non-alcoholic beer model by gross sales in U.S. grocery shops, in keeping with a Journal evaluation of NielsenIQ knowledge. With 258,000 barrels offered final 12 months, Athletic ranked within the prime 20 breweries within the U.S. The corporate stated it topped $90 million in gross sales final 12 months.
Whereas the extra well-known beer manufacturers focus simply a part of their operations on non-alcoholic beer, Shufelt stated its single-minded give attention to the class has allowed it to get a leg up on the competitors.
“Non-alcoholic beer was previously thought of as a very small market, but we see an enormous opportunity to add both occasions and populations to the adult beverage world by opening new days of the week for existing consumers and actively recruiting new consumers to the category altogether,” Shufelt informed Fortune in an e mail.
Other than Normal Atlantic, Athletic’s different huge identify backers embrace beverage firm Keurig Dr. Pepper, which invested greater than $50 million in 2022, in addition to celebrities comparable to former NFL participant J.J. Watt, Momofuku founder David Chang, and bicycle owner Lance Armstrong.
Athletic’s gross sales success, and buyers’ confidence within the model, is thanks partly to Gen Z’s rising curiosity with a sober life-style and non-alcoholic drinks. On TikTok, #sober and #sobercurious have racked up hundreds of thousands of posts with many influencers raving in regards to the well being advantages of their transition to sobriety. Greater than 60% of younger folks born between 1997 and 2002, up from 40% final 12 months, stated they plan to reduce on their alcohol consumption this 12 months, in keeping with a January survey by promoting firm NCSolutions. Athletic’s chief government, Shufelt, stated that 75% of the corporate’s clients are beneath 45 years outdated.
Whereas in years previous, the emphasis on sobriety could have peaked throughout “Dry January,” Shufelt stated summer time is definitely one of many firm’s busiest instances. The proliferation of non-alcoholic choices would have been unthinkable only a decade in the past, he informed the Journal.
“Ten years ago, there were no options,” Shufelt stated. “We had to totally change the product and the marketing.”
The rising sobriety, or “mindful consumption,” pattern has turned non-alcoholic beer into the fastest-growing phase of the beer market, whilst total beer gross sales have fallen with altering preferences. As extra younger folks reduce on their consuming, they’ve turned to options, together with mocktails and non-alcoholic wine, but in addition non-alcoholic beer, a lot to the good thing about Athletic.
“We’ve made non-alcoholic beer a positive choice and given consumers a product they are proud to hold in their hands,” Shufelt stated.
