As part of The Drum’s latest deep-dive, Marketing Secrets of Fast-Growth Brands, we sit down with Bill Shufelt, CEO and co-founder of Athletic Brewing, who shares his vision for the non-alcoholic beer brand that adds capacity, marketing dollars and legions of fans per day.
“I already had two today!” Normally, a respondent admitting they’re two beers deep when you catch up with them in the early afternoon might be cause for concern. But for Athletic Brewing Company CEO and co-founder Bill Shufelt, it’s just positive proof of the opportunities we have in the non-alcoholic beer segment.
“If you put a six-pack in your fridge, you’d be surprised how often you go there, and all the different beer occasions there can be,” he told The Drum. “The beer world, in general, was missing 80% of potential drinking occasions. It’s a nice reward in the afternoon or at the end of the workday, but it doesn’t derail you at all.
Not too long ago, the idea of a non-alcoholic beer in the United States was an O’Douls with the label tactfully turned inward so no one would know what you were drinking. Overseas, meanwhile, some major brands such as Heineken were successfully replicating their alcohol-free staples, and today this trend is spreading to American shores where Heineken 0.0 has become the category leader. Overall, the non-alcoholic beer trend is rapidly gaining momentum with AB InBev pushing hard behind Bud Zero and a host of other craft brewers brewing their own products.
But Athletic Brewing and its “Beer Without Compromise” edict is by far the leader in the craft segment with its bold packaging, flavor and vision. And he plans to quadruple his production this year and start marketing his product on a large scale.
Athletic Brewing was “in the right place at the right time,” says David Steinman, editor of Beer Marketer’s Insights. “You can give him credit for starting the non-alcoholic craft beer trend.”
No more ordering drinks from the children’s menu
It all started about five years ago when he realized in Shufelt that “it was like ordering from the kids’ menu if you didn’t drink alcohol.” He says, “Having a drink option to go with the meal is a big part of the experience.”
At the time, Shufelt was starting to take his workouts and his relationship seriously, with a wedding on the horizon. He also quickly became less serious about his financial work. “I just thought there were a lot of people left out of the beer world. Nearly 50% of adults do not drink. And then another 15 million Americans suffer from alcohol use disorders. I began to see the real potential to positively impact tens of millions of Americans.
He found a partner with a similar vision in brewmaster John Walker. Together they settled into an empty warehouse and spent a year working on the product. “Once it started to taste good, we took it to Whole Foods. They understood it immediately and have been racing ever since.
It’s been a bit of a perfect storm of opportunity ever since. Between the rise of the dry January and the sober and curious movement, there seems to be a zeitgeist happening. At the very least, the stigma that was attached to drinking a non-alcoholic beer is fading as new options abound.
“There’s the curious sober movement and the fact that young people don’t like to be crushed all the time,” says Gerry Khermouch, editor of Beverage Marketer’s Insights. “They are looking for a drink to avoid this. It’s a broader trend that affects whiskeys and gins… The revelation [for Athletic Brewing] was the wide range of consumer occasions it serves and the breadth of consumer demographics receptive to it.
Great competition equals great opportunity
To date, Heineken 0.0 and Athletic Brewing account for the majority of non-alcoholic beer sales in the United States. Plus, Khermouch says, “there’s a whole flotilla of products coming to market that have totally changed the conversation.”
Athletic Brewing sold over 100,000 barrels last year, placing it among the top 25 brewers nationwide. Run Wild IPA is its most awarded and best-selling beer. Free Wave Hazy IPA and Upside Dawn Golden Ale are also top sellers.
It purchased the Ballast Point production plant in San Diego and is in the final stages of building a new brewery in Connecticut. This will allow the company to produce 200,000 barrels, on each coast, by the middle of the year. And the Connecticut facility can be expanded. “It shows you how big he thinks,” Steinman says.
It’s about meeting demand, says Shufelt. “Our ambition is to put our beer in the hands of everyone who wants it. We haven’t been able to deliver that yet.
Three different funding rounds that led to “godly amounts of capital” will certainly help, Khermouch says. “It’s going bankrupt, building major interchange capacity on both coasts. He doesn’t seem intimidated by Bud and Heineken alternatives…Although it’s a double edged sword with these big companies because they spend huge amounts of money to advertise their category, but at the same time they try to put you bankrupt.
Indeed, Heineken 0.0 is the category leader, growing 30% to 240,000 barrels in 2021, according to Beer Marketer’s Insights. It started massive marketing in the United States in 2019. Bud Zero was launched last July. Guinness 0.0 is expected to arrive in the United States this summer.
Athletic Brewing is preparing by preparing its marketing plans as well as new product innovations. It hired its first marketing manager, Andrew Katz, in October. Katz is an advertising industry veteran who spent more than 10 years at PepsiCo marketing everything from sparkling water to SoBe to Mountain Dew and the Pepsi brand. He was also Vice President of Marketing at Heineken Company, working on Dos Equis. Definitely on brand, Katz is a cycling instructor and founder of Instructrr Live, a virtual studio platform for fitness creators.
The brand will “focus on all drinkers”, but with an ideal target audience under the age of 44. He currently has a 50-50 gender split.
It will stay true to the athletic appeal true to the brand’s DNA, says Shufelt. “It’s super authentic to who we are.”
So much so that the brand’s initial marketing consisted entirely of Shufelt handing out cans of beer at races. “My goal was to get the 1,000 beers into people’s hands every weekend, tell them about the brand and blow them away. It wasn’t like I had to google where our target demo would be. It started with me doing 75 events that first summer and it built to sample at 1,000 races last year.
Athletic Brewing will also continue to build on its charitable efforts. Its “Two for the Trails” program dedicates 2% of all sales to building and cleaning up trails and parks. So far, he has donated $1.4 million to communities and environmental causes. “We have a big impact wherever we sell beer,” says Shufelt.
And of course, as always in the beverage category, there will be innovation. She is currently piloting her Daypack hop-infused sparkling water which comes in four flavors: black cherry, blood orange, lime and mango. His first “emerging brand” “is doing incredibly well,” says Shufelt. “There’s a lot of white space during the day because people are almost mixing sugary sodas with cigarettes these days… We’ll continue to see how the pilot plays out and then consider taking it bigger ladder.”
Athletic Brewing also has a new beer coming out next month that’s still under wraps, along with a handful of other products in the works. Overall, Shufelt is optimistic about their brand and the category as a whole. “Alcohol-free beers could be beer’s main growth driver for more than a decade.”
For more marketing secrets on fast-growing brands, check out The Drum’s latest Deep Dive. And you can sign up for The Drum’s daily US newsletter here.