Brewing company

Keurig Dr Pepper invests $50 million in Athletic Brewing Company, takes minority stake in non-alcoholic beer maker

Non-alcoholic beer maker Athletic Brewing Company has received a $50 million investment from Keurig Dr Pepper (KDP) that will make the publicly traded CPG giant a minority shareholder in the company.

KDP will also receive a seat on Athletic’s board of directors. Sports leaders declined to share the total number of board members.

“We are thrilled to welcome Keurig Dr Pepper as an investor and strategic partner,” Athletic co-founder and CEO Bill Shufelt said in a press release. “Their team brings tremendous expertise and truly embraces our mission to brew great-tasting non-alcoholic beers that are suitable for all weathers. This investment will allow Athletic Brewing to further accelerate its growth in North America.”

KDP’s investment in Athletic is part of a Series D investment round in which the fast-growing non-alcoholic beer producer has raised a total of $75 million.

Over 25 existing investors, including major investors TRB Advisors and Alliance Consumer Growth (ACG), and several celebrities, such as NFL player JJ Watt, restaurateur David Chang, tennis star Naomi Osaka and model Karlie Kloss , participated in the round.

Athletic said the $75 million investment will help the company “accelerate its growth across the United States and prepare the business for a stable financial future as it continues to move toward profitability.”

Across five funding rounds, Athletic has now raised approximately $173.5m, including a $75m Series C round in May 2021 (led by ACG, TRB and over 25 existing investors), a round $17.5 million Series B round in 2020 (including TRB Advisors and over 25 existing investors), a $3 million Series A round (including TRB Advisors, Tastemaker Capital and Blake Mycoskie) and a $3 million seed round in 2017 (including over 60 angel investors).

Speaking to Brewbound, Shufelt called the investment “the culmination of a multi-year relationship” that has brought together two companies with shared values, a mutually aligned vision for non-alcoholic beer and partners with a “communicative spirit.” , collaborative and fast”.

“It really prepares Athletic for our future financial stability and leaves many options open on the road ahead,” he said.

Athletic considered a number of options – such as venture capital, private equity, family office, strategy, an initial public offering, etc. – and decided that KDP was the “best partner for our business” today. Shufelt described Athletic as “methodical” about capital structure decisions.

At the Brewbound Live 2021 business conference, Shufelt said he would like to take the company public one day. Today’s news doesn’t take away an IPO for the future, he said. However, he said the company was “super focused on the opportunity” with “so many growth opportunities ahead” in the non-alcoholic beer segment.

Shufelt called the investment “growth capital” that will be used to invest in the marketing and growth of the NA beer category, as well as the financial stability of Athletic’s 200-member team across the country. .

“With this capital, it gives us enough to achieve profitability and have a very long-term sustainable business,” Shufelt said.

What KDP brings to the table is scale and expertise in areas such as supply chain and logistics for the fast growing but still young Athletic.

“We’re trying to get some insight on the road ahead as we emerge into new territory for our business,” Shufelt said.

“There is a lot to learn from each other in every department of our company. And hopefully we have a lot of innovative and fun things to share the other way,” he continued. “But I would say from day one it’s not an overhaul of how we go to market or how Athletic works. It’s a supplier partnership. They invest in us. They love what they see us as the supplier and leader of the future in this category.

Looking ahead, Shufelt said the roles the two companies will play in the relationship are “undefined.”

“It’s a lot of mutual respect; it’s a lot of values ​​alignment, a lot of excitement about the future of soft drinks. And from there, I think we will build and learn together.

Shufelt added that he views the KDP investment as another bold move in Athletic’s history, which included opening the first non-alcoholic brewery and tasting room in the United States in 2017 and then the opened two full-scale production facilities dedicated to producing NA beer in San Diego. and Connecticut.

“In this, we have found a partner who recognizes this audacity and believes in this future like us.”

Athletic has historically come close to profitability, but the commissioning of new breweries on both coasts has slowed that rise. Nonetheless, Shufelt said he expects the business to be profitable in about 12 months.

“If we hadn’t brought a huge brewery to the East Coast, we’d probably be there already,” he said.

In 2021, Athletic ranked 27th among craft breweries defined by the Brewers Association by volume, producing 104,000 barrels, a 177% year-over-year increase. Athletic hit the 100,000 barrel milestone in year four, going from 875 barrels in 2018 to 7,500 barrels in 2019 and then to 37,500 barrels in 2020.

With the additional capacity coming online with its bicoastal production facilities, the latest fall resets marked the first time Athletic was comfortable opening additional states (it’s now national) and taking large-scale retail partners lest it is not. to properly manage these accounts, Shufelt said.

“This fall reset period has been a great time, and next spring will be even more so as many national retailers revise their non-alcoholic beer sets,” he said.

This year, Athletic expanded its presence in Walmart stores, while adding major retailers such as Costco, Publix, Target and CVS.

Athletic surpassed its 2021 production numbers in August, setting the company up for another year of outsized gains, Shufelt said.

Year-to-date through Oct. 1, Athletic increased off-site sales by nearly $17 million, to $32.225 million (+109.6%), according to NielsenIQ data. Athletic is now the third largest non-alcoholic beer brand, behind Heineken 0.0 and Budweiser Zero.