The fast-growing non-alcoholic beverage segment continues to be a favorite with consumers and investors. The category surged during the height of the pandemic, driven by many consumers’ quarantine-spurred turn toward wellness-centric food and beverage offerings.
Now, it seems that these booze-free alternatives will remain a post-COVID favorite — Connecticut-based non-alcoholic craft brewery Athletic Brewing has raised $50 million in a Series C funding round led by Alliance Consumer Growth (ACG) and TRB Advisors. This fundraise brings the company’s total funding up to $70 million, reports Food Dive.
“We’ve been shorting orders for years, unfortunately, [we are] quite frequently out of stock on our ecommerce site, and have had significant shortages on distributed orders too, so it’s definitely responding to a surge in category demand,” company Co-Founder and CEO Bill Shufelt told the publication.
PYMNTS data find that a whopping 1 in 4 consumers have been drinking alcohol less often since the start of the pandemic, which represents a greater share than those who have been drinking more often, despite buzz (no pun intended) that people were turning to alcoholic beverages to cope with stress during this difficult time.
Sales of non-alcoholic beverages are expected to continue to grow. One report found that the global non-alcoholic beer market is expected to grow to $35.6 billion by 2030, up from its pre-pandemic $9.6 billion estimated value, at a compound annual growth rate (CAGR) of 8.1 percent. Additionally, data analytics company IRI found that, in 2020, sales of non-alcoholic beer in the United States grew 38 percent to $188 million.
This demand is led by younger consumers. A Budweiser Canada study found that millennial and Generation Z consumers were the most likely to seek out non-boozy alternatives to traditional beer, with 64 percent of non-alcoholic and low-alcohol beer consumed by consumers between the ages of 19 and 34.
Health And Values
The choice to drink non-alcoholic beer is typically made for health and wellness reasons, reports beverage insights company IWSR. Athletic targets much of its messaging at athletes and fitness buffs, as the name implies. The company touts its pro athlete investors and sponsors trail grants. However, in addition to making a play for the wellness-conscious consumer, Athletic Brewing may also be targeting the values-minded shopper.
On Tuesday (June 1) the company announced a non-alcoholic IPA for Pride Month. Many have noted with concern the trend of liquor companies targeting LGBTQIA+ consumers, given the disproportionate prevalence of alcoholism within these communities. By providing a non-alcoholic Pride-themed beverage, and by donating net profits to a nonprofit LGBTQIA+ athletic advocacy organization, the company may be appealing to consumers who seek values alignment from their brands. It may be positioning itself in opposition to alcoholic beverage companies’ Pride strategies.
In recent years, beer giants such as Heineken and Molson Coors have been debuting their own non-alcoholic beers in an attempt to win over sober and/or health-conscious consumers. Anheuser-Busch added its own option in 2020, launching a non-alcoholic Budweiser in 2020. In the news release, Budweiser Vice President of Marketing Monica Rustgi noted the “incredible opportunity to propel [the non-alcoholic beverage] movement into mainstream culture,” noting that these drinks have been “quickly rising in popularity.” Guinness, meanwhile, is planning a relaunch of the ill-fated Guinness 0.0 later this year.