Athletic Brewing: The $500M Non-Alcoholic Beer Company
The non-alcoholic beer market is on track to become a $1 billion-dollar plus industry and San Diego-based Athletic Brewing Co. is leading the way.
Learn from San Diego's greatest entrepreneurs and companies. Every week, I write a newsletter breaking down the business and money in San Diego. Join hundreds of entrepreneurs and investors by subscribing below.
Founders,
Today I’d like to introduce you to Athletic Brewing.
It was recognized as one of TIME’s most influential companies in 2022.
The bi-coastal company sold more than 100,000 barrels last year and has earned a reputation as a top 25 craft brewery in the US.
More notably, the company is valued at around nearly $500 million with a goal to become a billion-dollar business.
Please enjoy this breakdown of Athletic Brewing.
High-Level Overview
Athletic is the leader of non-alcoholic craft beer, with products distributed in over 10,000 retailers across the world.
What makes it special? Athletic is the leading non-alcoholic brand that serves quality craft drinks. It sells cans with as little as 25-calories, helping consumers avoid dietary guilt. Its products includes water, hops, barley and yeast.
Currently the most-sold beer at Whole Foods, the San Diego-based beverage company brought in more than $50 million in annual revenues in 2022.
Founder Story
Prior to launching Athletic, Bill Shufelt worked as a former trader for six years at Steve Cohen’s hedge fund, Point72. He became interested in non-alcoholic brews in 2013, when he stopped drinking.
In 2017, poured life savings into the business and recruited John Walker, who was working as a head brewer working in Santa Fe at the time.
Steps taken to launch the million-dollar startup:
Tested more than 100 batches to develop its proprietary recipe
Raised $3 million in seed funding from private angel investors in 2017
Launched the beverage company in May 2018
Starting with Retail
Athletic’s big break came when the co-founders met with the Whole Foods buyer in New Jersey.
Through this interaction, they were able to ink an early distribution deal with several Whole Foods locations in Connecticut.
Once they entered retail, Athletic’s saw white-hot demand for quality nonalcoholic beer, selling roughly 14,000 cases a month.
Only a few breweries have ever reach that output, let alone in the first year of business.
“When we started Athletic Brewing in 2017, we were told that consumers weren’t asking for non-alcoholic beer and that there was no demand for it. But the truth is that the industry had never delivered a product worth demanding,” said Shufelt.
The Products
To date, athletic has released over 50 different non-alcoholic flavors and counting.
Its flagship products include the Upside Dawn Golden Ale and the Run Wild IPA along with seasonal and limited release offerings like the Cervena Athletica Copper, the All Out Stout, and the Downwinder Gose.
Today the majority of the company’s revenue comes from grocery and liquor stores.
Initially, Shufelt said that he would wake up as early as 3 a.m. and attended triathlons and half-marathons to hand out samples and generate sales.
“Our go-to marketing strategy was bringing coolers to race finish lines, anything from a local 5K to an Ironman, and handing out hundreds of samples,” he says. “We probably sampled almost 10,000 people that first summer and built a huge community of direct fans,” said Shufelt.
Off to a Strong Start
Athletic reportedly controls over 40% of the alcohol-free craft beer market, and is one of the few companies competing with beer giants.
Expanding internationally, consumers can now purchase its products in Canada, UK, the European Union, and Australia.
To keep its edge, Athletic plans to sell its products in convenience stores, coffee shops, delis, pharmacies, and even vending machines.
Other top competitors include Partake Brewing, Ritual Zero Proof, and Seedlip.
“We have been the fastest-growing brewery in the country for two years in a row now. We set out to revolutionize beer for the active, modern adult, and we’d like to think we are off to a really good start,” said Shufelt.
Celebrities, Investors See Opportunity
In November 2022, Keurig Dr. Pepper made a $50 million investment into Athletic Brewing, receiving a minority equity stake in the company.
To date, Athletic Brewing has raised more than $175 million. Athletic has also partnered with a wave of A-List celebrities.
Celebrity investors who have also invested into the company include tennis star Naomi Osaka, NFL players J.J. Watt and Justin Tuck, and bicycling legend Lance Armstrong, as well as Tom’s Shoes founder Blake Mycoskie.
“There’s no one else in the craft industry doing nonalcoholic beers that can match his marketing and advertising,” said Greenwich Capital’s Andrew Dickow, when asked about Athletic’s competitive advantage.
Growing in San Diego
In March 2020, Athletic’s co-founders moved to North County San Diego to get further involved in the thriving and sophisticated local craft beer scene.
It also purchased an 80,000-square-foot building in San Diego to serve as its primary production facility in the area. As of today, the company employs more than 180 people, with about one-third based locally.
“San Diego has an incredible and reputable craft beer community that we’re excited to be a part of — it was California’s health-forward and active lifestyle that brought us here to begin with,” he said.
Your feedback helps improve SD Founders. How did you like this week's newsletter?
Are you interested in partnering with SD Founders? Click the button to learn more about sponsorship opportunities.