Yesterday, the Brewers Association released its annual production figures for the U.S. craft brewing industry in 2021. It’s always full of interesting info, including two Top 50 lists that rank U.S. craft brewers (defined here) and overall U.S. breweries by sales volume. The one ranking that immediately jumped out was that Athletic Brewing Co. was No. 27 on the craft list, and Athletic Brewing makes non-alcoholic beer. This speaks to the impressive growth of the non-alcoholic beer sector over the last few years.
“Package sales generally fell in 2021 across the board in the beer category, and the NA sector is the exception,” said Bart Watson, Brewers Association economist, in a video press conference yesterday. “It took share within off-premise sales. You know, it’s still a pretty low share. I think in the last IRI scan data I looked at it was 0.6 share. So, a little bit more than one out of 200 beers sold are now non-alcoholic beers, but that’s up a tenth of a share point. That’s 20 percent share growth from the year before. Athletic has been, you know, within the craft category, the company that’s clearly the biggest beneficiary of that. It’s a huge success story in a new growth opportunity sector.”
Ever since Athletic Brewing was founded in 2018, the brand has been buzzing. Athletic Brewing Co. is a Stratford, Conn.-based brewery that has quickly established itself as a leading NA brand in a time when the sector is opening up in America. The company says it’s the nation’s leading brewer of non-alcoholic craft beers with over 50 percent market share. In 2020, the company grew almost 500 percent year-over-year for the second year in a row. Last we heard, the company employed more than 150 people in 32 states and Washington, D.C.
Athletic Brewing has had lots of support to make it all happen — like when it closed on $17.5M in Series B funding and then $50M in Series C funding or when it came to light that some of the investors in the company are famous folks from athletes to chefs — J.J. Watt, Lance Armstrong, Momofuku restaurateur David Chang.
But the company has also been innovative. Athletic Brewing’s Stork Subscription service sends nine months of NA beer with cool kid gifts to new parents. Clever. The brand has many strong relationships with athlete and health brands. Athletic is/was a partner with USA Triathlon. The brewery secured a partnership with run specialty retailer Fleet Feet to grow awareness of its brand through its stores. The company has also expanded its portfolio with its hoppy sparkling water brand, DayPack, launched in 2020 and sold directly to consumers.
Overall, the non-alcoholic beer sector has been a bright spot in the American beer industry, although a small bright spot. There are a number of factors. The traditional craft beer drinker is getting older and drinking less alcohol. Consumers are rightfully more concerned about health, and they’re often willing to pay more for food and drink that is specifically marketed towards it. There is an increase in demand for low-alcohol and no-alcohol items from people with health illnesses. Non-alcoholic beer is even gaining traction among athletes as a recovery drink.
You might think this is mostly a packaged, off-premise market, but you’d be wrong. According to Forbes writer Kate Dingwall, utilizing on-premise measurement data via CGA Strategy, no- and low-alcohol beer in the on-premise sector could push the NA category further. According to the February feature:
Within the overall beer category, no and low is one of the fastest-growing segments, increasing by 96% over the last 52 weeks … While just 5% of Dry January participants drank non-alcoholic beers in 2019, that number jumped to 29% in 2022. In the fall of 2019, just 12% of beer drinkers were interested in no- and low-alcohol beer. By the fall of 2021, this number had grown to 16%.
Athletic Brewing is leading the charge in craft, but lots of others see the big potential. On the macro side, Heineken 0.0 is a market leader with the company teasing another NA offering next year. On the craft side, everyone from Boston Beer to Brooklyn Brewery has an offering, but there are many brands focused only on making NA beer products — brands like Hairless Dog, Partake and Surreal — because it’s not easy to do, which makes Athletic Brewing’s No. 27 spot even more impressive.
“In presentations I’ve been giving to craft brewers, I’ve been highlighting non-alcoholic beer,” said Watson. “It’s difficult to produce. You know, it’s clearly challenging to make delicious NA beers, but companies are increasingly doing it. I think it’s one area where small brewers can effectively play as that category shifts from one that is defined by its lack of alcohol to one that’s defined by things like flavor and variety that craft brewers have long done very, very well. So, I do think Athletic at 27 speaks to the strength there. I can’t predict if we’re going to see any other brewers rising up the list that quickly any time soon, but I do think we’re going to see many of these Top 50 companies looking at non-alcoholic if they’re not already.”