Yesterday the Brewers Association released its annual production figures for the US craft brewing industry in 2021. It’s always full of interesting information, including two Top 50 lists that rank America’s craft brewers (defined here) and all of the American breweries in terms of sales volume. The only ranking that immediately jumped out is that Athletic Brewing Co. was No. 27 on the crafters list, and the Athletic Brewing company makes non-alcoholic beer. This speaks to the impressive growth of the non-alcoholic beer industry over the past few years.
“Package sales have generally fallen in 2021 across all areas within the beer category, and the NA sector is the exception,” said Bart Watson, Brewers Association economist, during a video press conference yesterday. “It took a share of off-site sales. You know, it’s still a pretty small share. I think in the last IRI analysis data I looked at, it was 0.6 shares. Thus, a little more than one in 200 beers sold is now alcohol-free, but this is up by a tenth of a share point. This is a growth of 20% compared to the previous year. Athletic has been, you know, in the craft category, the company that’s clearly the biggest beneficiary. This is a huge achievement in a new area of growth opportunity.
Since the creation of Athletic Brewing in 2018, the brand has been in turmoil. Athletic Brewing Co. is a Stratford, Connecticut-based brewery that has quickly established itself as a leading NA brand as the industry opens up in America. The company claims to be the top brewer of non-alcoholic craft beers in the country, with more than 50% market share. In 2020, the company grew almost 500 percent year after year for the second consecutive year. The last time we heardthe company employed more than 150 people in 32 states and Washington, D.C.
Athletic Brewing received a lot of support for all of this to happen – like when it closed with a $17.5m Series B funding and then $50 million in the Series C financing or when it became apparent that some of the company’s investors are famous people from athletes to chefs – JJ Watt, Lance Armstrong, restaurateur Momofuku David Chang.
But the company was also innovative. Athletic Brewing’s Stork subscription service is sending nine months of NA beer along with cool gifts for new parents. Intelligent. The brand has many strong relationships with athlete and health brands. Athletic is/was a partner of USA Triathlon. The brewery has partnered with specialty retailer Fleet Feet to increase brand awareness in its stores. The company has also expanded its portfolio with its hopped sparkling water brand, DayPack, launched in 2020 and sold direct to consumers.
Overall, the non-alcoholic beer sector has been a bright spot in the US beer industry, albeit a small bright spot. There are a number of factors. The traditional craft beer drinker is getting older and drinking less alcohol. Consumers are rightly more concerned about their health and are often willing to pay more for foods and beverages specifically marketed for this purpose. There is an increase in demand for low-alcohol and alcohol-free items from people with ailments. Non-alcoholic beer is even gaining traction among athletes as a recovery drink.
You might think it’s mostly a packed off-site market, but you’d be wrong. According to Forbes Writer Kate Dingwall, using on-site measurement data via the CGA strategy, zero- and low-alcohol beer in the on-site sector could push the NA category further. According to February feature:
Within the general beer category, non and weak is one of the fastest growing segments, growing 96% in the last 52 weeks…While only 5% of Dry January attendees drank non-alcoholic beers in 2019, this number increased to 29% in 2022. In fall 2019, only 12% of beer drinkers were interested in non- and low-alcohol beer. By fall 2021, that number had risen to 16%.
Athletic Brewing is leading the charge in crafting, but many 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 plenty of brands that focus solely 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 given to craft brewers, I’ve highlighted non-alcoholic beer,” Watson said. “It’s hard to produce. You know, it’s clearly hard to make great NA beers, but companies are doing it more and more. I think that’s an area where small brewers can play effectively, because this category is moving from being defined by its lack of alcohol to being defined by things like flavor and variety, which the craft brewers have been doing very, very well for a long time. So I think Athletic at 27 is a testament to the strength there. I can’t predict if we’ll see any other brewers quickly climb the list any time soon, but I think we’ll see many of these top 50 companies turn to non-alcoholics if they haven’t already. “