These San Diego Breweries Lead the Charge in the Fast-Growing Non-Alcoholic Craft Beer Segment
There has long been a stigma attached to non-alcoholic beer. Most of the products in the category are bland versions of German-style lagers, which are really indistinguishable from each other.
The stagnant category has never seen much innovation, but a series of new-school alcohol-free breweries are changing the game by applying a craft beer approach. And the two most awarded of these groundbreaking operations – Athletic Brewing and Two Roots Brewing – are right here in San Diego.
Athletic Brewing was founded in 2017 in Stratford, Connecticut, on the initiative of Bill Shufelt, who did not initially intend to lead the non-alcoholic beer uprising. All he originally wanted was a good beer or non-alcoholic lager option.
“When I was working in finance I had an incredibly busy schedule and it became evident that alcohol was not compatible with my goals and what I wanted to accomplish professionally or personally,” says Shufelt. “All of the soft drink choices were what you would find on the kids’ menu, and none of the non-alcoholic beers offered the true craft beer flavor profile that I loved. Athletics was born out of a genuine need in my life. I wanted a good non-alcoholic beer but couldn’t find one on the market.
After teaming up with co-founder and chief brewer John Walker – who agreed to Shufelt’s offer to go into business after more than 200 other brewing professionals turned him down – the couple spent years leading home brewing research and prototypes. This, despite being told by friends, family, and market data that there is no demand for non-alcoholic beer. The duo claimed there was no demand for the non-alcoholic beer available, believing their possible products – ales and lagers of American, English and German origin, ranging from light to dark, malty to hoppy – would rejuvenate the segment.
They were right. When Athletic’s brewery and valve room opened in Stratford, Shufelt and Walker thought it would take them at least five years to exceed capacity, but they did so in less than a year . By year two, they were at the point where they desperately needed to grow to meet the demand for products. To determine where to set up their second manufacturing plant, they decided to do so in an area where the majority of their customers were located: the West Coast.
In March 2020, Athletic purchased an 80,000 square foot building on Trade Street in Miramar. Formerly a pilot brewery, barrel and packaging warehouse for Ballast Point Brewing, it suited the business perfectly, getting it up and running quickly. Today, this facility is capable of producing up to 150,000 barrels of beer per year, as much as the Stratford Brewery and a second Connecticut brewery, which is currently under construction. It’s also home to more than 60 employees, including brewers who previously worked for craft beer companies in San Diego.
In 2021, Athletic launched more than 50 different beers, including flagship products Run Wild IPA, Upside Dawn Golden Ale, Free Wave Hazy IPA and All Out Stout, as well as seasonal beers such as its Mexican-style lager Cerveza Athletic. canned, small-batch and non-alcoholic seltz offerings. That’s a far cry from the unique archetype established by longtime leaders in the non-alcoholic beer segment, and it continues to work well for the bi-coastal brewing company.
Athletic currently has a 45 percent share in the alcohol-free craft beer category and about 8 percent in the overall non-alcoholic beer category in the United States. They also distribute their products in Canada, Australia, Spain, France, Ireland and UK, and intend to launch Japan and Brazil while expanding European distribution to other countries in a near future.
“We have been the fastest growing brewery in the country for two consecutive years now. In 2020 we were among the top 50 craft breweries in the country and this year we should be in the top 25, ”said Shufelt. “We’ve set out to revolutionize beer for the active, modern adult, and we’d like to think we’re off to a great start. “
A road rooted in THC
While the impetus behind Two Roots Brewing was similar to that of Athletic – a desire for quality craft beer without the unwanted side effects of alcohol consumption – the road the company took to make its mark in the industry. alcohol-free segment was different. Two Roots was originally created to produce cannabis-infused beers and sold its first THC-infused non-alcoholic beers at dispensaries in Nevada in 2018. This process involved brewing and dealcoholizing the beer at the Kearny Brewery. Mesa Two Roots bought from the former Helm’s Brewing operation, then shipped the beer to a facility in Las Vegas where it would be infused with THC.
“To perform product demonstrations for shoppers and dispensary staff, we canned our non-infused product, alcohol-free craft beer, and the feedback we received over and over again was just amazing,” said Maikel de Mortel, Director of Marketing and Revenue at Two Roots. . “In 2019, we decided to test our beer against the best of the best, introducing our basic styles in the Great American Beer Festival, where our Enough Said Helles won gold.”
The Great American Beer Festival is the world’s largest and most prestigious annual brewing competition. The rise of non-alcoholic beer has been so rapid that in 2021, the festival added a Non-Alcoholic Beer category, where Two Roots’ Enough Said again clinched gold, and a pair of Athletic beers won. silver and bronze for a San Diego sweep. . Together, the two companies have amassed over 50 beer and brewing awards over the past four years, with Athletic holding over 40 alone.
Critical and public praise for Two Roots’ THC-free products became such that in late 2020 the organization focused on alcohol-free beers, parting ways with the cannabis efforts of its Sorrento-based parent company. Valley, Lighthouse Strategies. Two Roots currently employs 16, including master brewer Kevin Barnes (formerly of Green Flash Brewing).
“We realized that consumer mindsets were shifting rapidly from alcohol consumption to moderation and conscious consumption,” explains de Mortel. “For years, we’ve been following this trend closely in the functional drinks and food categories. Well-being of body and mind continues to guide consumer buying behavior.
Since its switch to non-alcoholic beer production, Two Roots has experienced significant growth. Its beers are now available in 28 states and seven international countries, and its revenue is expected to increase fivefold during this year. In 2022, the company will also expand its portfolio to include a pair of specialty beers as well as limited-time offers, which will be available through the company’s website.
Last month marked the launch of the Adult Soft Drink Association, or ANBA, an industry group founded by a coalition of more than 30 brands, including Athletic, to overcome challenges in the emerging segment, including the lack of universal regulations, industry standards, and guidelines for international trade and market expansion.
According to Global Market Insights, the global adult non-alcoholic beverage market is expected to reach $ 30 billion by 2025. ANBA hopes to position the segment for success by educating and engaging stakeholders to further accelerate the growth of the industry. ‘industry, creating industry and regulatory compliance standards, advocating and developing government business strategies to protect producers of non-alcoholic beverages.
“Non-alcoholic beer is the first major segment that has grown the category in over a decade. We open up beer drinking opportunities from very specific days and times of the day on Friday and Saturday any day and any occasion in just about any location ” said de Mortel. “Now you can have your favorite beer any night, including Sunday through Thursday, and feel good.”
Non-alcoholic beers have been available for decades, but the key to the new interest in the segment is a greater variety of styles and tastier beers and lagers. The main challenge that remains for producers is to convince consumers to let go of their long-held impressions of non-alcoholic beer and to sample modern offerings.
“It’s time to get the (non-alcoholic) beer off the penalty bench,” says Shufelt. “Forget what you knew about (non-alcoholic) beer in the past and treat yourself to a high quality product that tastes great and makes you feel even better.”
Brandon Hernández is the founder of San Diego Beer News (www.sandiegobeer.news), a site providing daily coverage of the county’s brewing industry, an area he has covered for 15 years. Follow him @sdbeernews or contact him at: [email protected]