- Athletic Brewing Company raised $17.5 million in a Series B funding round, according to Forbes. The maker of nonalcoholic brews was founded in mid-2018. Athletic has raised more than $20 million so far.
- The business publication said part of the funding will be used to purchase an 80,000-square-foot San Diego brewery once occupied by Ballast Point Brewing. Athletic’s revenue grew tenfold in 2019 and 2020 shipments could near 20,000 barrels once the San Diego brewery comes online.
- In an interview with Forbes, Athletic Brewing co-founder Bill Shufelt said the money also would go toward adding a high-speed canning line, acquiring brewing assets and expanding into states such as California.
The beer industry has undergone a major upheaval in recent years that has seen iconic brews such as Bud Light and Miller Lite struggle while thousands of craft upstarts have attracted consumers with new tastes and flavors.
But as the craft beer space becomes inundated with more competitors — there were more than 7,300 craft players in 2018, nearly double the amount in the U.S. four years earlier, according to data from the Brewers Association — it's no longer enough just to be categorized as one to guarantee success. This has prompted beer makers and budding entrepreneurs to look for other areas of untapped growth such as low- and no-alcohol brews.
The popularity of no-alcohol brews in particular is reflective in the fact that the fast-growing Athletic Brewing raised nearly $18 million in funding roughly two years after it was founded. But hot growth is no guarantee of future success. The 80,000-square-foot space in San Diego it is looking to buy was once occupied by Ballast Point Brewing. The craft brewer was purchased by Constellation Brands for $1 billion in 2015 before the Modelo beer maker sold it for an undisclosed amount last year after a rebrand and price reduction failed to boost sales.
Beer volume slipped 2.3% in 2019, its fourth straight year of declines, led by a 3.6% drop in domestic brews, IWSR said. At the same time, low- and no-alcohol posting gains of 6.6%, outpacing gains in craft and imported brews. It's a major reason why beer companies of all sizes have started looking to low- and no-alcohol brews.
AB InBev announced in January it was adding four no- and low-alcohol craft beers to its portfolio. The new products, which will all debut nationwide by spring, are coming from craft brewers the beer giant owns such as Golden Road and Breckenridge Brewery.
Several other large beer companies now have products in the sector, with Heineken launching its 0.0% MAXX in 2017 and Coors offering its own nonalcoholic brand. Guinness owner Diageo has Open Gate Pure Brew, and Carlsberg has been making no-alcohol beers since 2015. Heineken also recently released a January Dry Pack, containing 31 cans of Heineken 0.0.
Low- and no-alcohol brews have grown in popularity among consumers who are abstaining from alcohol or looking to curtail their calorie consumption. In the case of nonalcoholic beers, brewers are able to ship to all 50 states, something Forbes noted that companies who make alcoholic versions aren't able to do.
If the shipping challenges remain in place for regular beers, nonalcoholic version could have a big advantage, especially if they are able to establish a broader footprint in the U.S. The challenge, of course, will be for nonalcoholic versions to remain competitive with new beer varieties and other alcoholic options such as hard coffee or spiked seltzers. While they will likely never totally replace traditional beers, consumer trends are favorable for them to continue increasing their presence in the beverage landscape.