Nonalcoholic beer is more than just a fleeting trend—it’s a movement, driven by Gen Z’s shift towards mindful drinking and a general pivot towards living a healthy lifestyle. Leading this surge is Athletic Brewing, now valued at $800 million, and standing as the largest nonalcoholic beer brand in the U.S. Cofounder and CEO Bill Shufelt shares his insights on the rise of the nonalcoholic category and how not to just ride a cultural wave, but to create it.
This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode.
Were you always into brewing beer or was this more like a business opportunity that you saw that you, like, became passionate about?
My roots are even less qualified and more delusional than that would even appear at face value. I resigned from a great job in the financial world without ever having brewed a batch of beer in my life.
Eleven years ago, I stopped drinking for lifestyle reasons. I had this very busy day job. I was about to get married. I wanted to be a little bit healthier. I wanted to sleep a little better. I wanted to eat a little better. Work out a little better. Like, all very average adult goals, and found all those things a lot easier to do without alcohol at all my work dinners and social things and everything.
And so I was off on my way, living a slightly healthier, busier life. Except I still loved going to bars and restaurants and doing things socially with colleagues. And there were no options, which blew my mind because the whole beverage world and grocery store and everything had adapted into these like really exciting local organic amazing products, except this one extremely dusty corner of the bar or the grocery store.
And I started to say this out loud a little bit, and my wife had seen this transformation in my life. Finally, we were walking to dinner one time, and I was just complaining about how we’re gonna have this amazing meal, and I’m gonna have to have, like, a sugary soda or virgin cocktail with it. And I was like, “Why can’t someone just fix this?” And I was so exasperated. And she stopped me in my tracks and spun me around and was like, “You should fix it.” And I was like, “What?” Like, I never, ever intended to be an entrepreneur without this very acute pain point in my life and decided to fix that.
How much do you think about like, “Oh, we’re riding this wave,” versus like, “Oh, we’re making this wave happen.“
I’d like to think it’s a little bit of both. I saw the trends in my own life in the financial world. When I came into the financial world, it was very expected that people were out at boozy dinners, clients entertaining multiple times a week. And 12 years later, I saw the whole shift playing out where there was just such a focus on productivity, alertness, like performance at the desk.
We came into the market in 2018, there were no name brands in the nonalcoholic category. It was all sub-brands. Now, I think with a lot of the work on the marketing front, it’s permissioned that Heineken, Bud, Stella, Corona, Guinness have all put their main brand in the nonalcohol category. The destigmatization is happening really fast, and we’ve been really lucky to have a lot of celebrity endorsers, like J. J. Watt, the NFL star, David Chang, the chef, Karlie Kloss, the supermodel, who’ve really helped us break through some of those ceilings and the stigmas before.
You mentioned you came from the financial world. When you announced you were leaving to go and do this, did people look at you like you were crazy? Or was it like, “Oh, that’s great!”
At first, they definitely thought I was joking. So my boss who sat next to me came back from vacation. It was the first day of the year back in January, and he said, “Did anyone have any epiphanies over vacation?” And I was like, “Actually, Jeff, could we, uh, catch up for a second?” But I think everyone just knew I was serious. So, at that firm, I really thought I was going to be there for the next 25 years. I don’t think anyone had resigned voluntarily from the desk I sat on like the 20 years prior. So I think it was generally a big surprise. But also, everyone there was so supportive, and we have a great board member from that firm and a number of great supporters as well.
Yeah, I mean, I guess it’s a good resource to build initial funding from, too, right?
You would think so, but Athletic Brewing was a very bad investment profile to start. It took me a lot of fundraising meetings. I did about 120 meetings over a nine month period. I got a lot of no’s. We were building the first nonalcoholic beer brewery in the country ever for basically a category that didn’t exist.
At the sampling booths that first summer we were on the market, I got a lot of no’s, very little interest at the tent. Like, it was hard to get people to walk over. So I knew in the first five seconds I had to have something compelling to say to people to get them to try the beer. And I’m thankful for how tough that is, too, because I think it really helped me refine how I talk about and sell to retailers at the end of the day, also.
So you raised a round of capital this summer. So what are you going to do with it?
This summer, we’re really excited to welcome General Atlantic to our cap table. They helped us by another production facility on the West Coast, which basically doubles our overall company capacity. Right now, Athletic Brewing owns and operates the two biggest nonalcoholic beer breweries in the world. So we’re just continuing to lay the tracks out ahead for the category that we hope to build.
With all this growth and all the potential that you see, like, how do you know if your plans are getting ahead of themselves? Like you need to expand ahead of demand, but there’s always a risk in that, too, that you’ve gone too fast or too far.
That’s really been the question the whole time. Scaling manufacturing ahead of demand and having accurate forecasting has been one of the hardest things we’ve had to do as a company.
I’d say one of the most pivotal decisions John and I ever made was that we were operating a 8,000-square-foot brewery in Connecticut that was capable of making 5,000 barrels of beer. And it took us forever to finance and build that brewery. And then we outgrew it in 10 months, and we doubled the capacity and outgrew it again in three months.
So we decided we had to make a much bigger facility. The two of us walked around, we saw the facility and we walked around San Diego for about eight hours. We sat in a coffee shop and mowed through our Microsoft Excel for a while. And basically we agreed that we just have to do this. It’s the right move.
And we’ve come to a number of those moves and have had great advisors. But we’re at another one of those crossroads. And ultimately we have to believe in the trend. And this is our life’s work. And we’re so close to our customers that I think we have a really good pulse on what the future looks like there.
But sometimes, you just have to make the bet, right?
Yeah, and at the end of the day, we’re wrong all the time on all sorts of things. Even the best stock traders or baseball hitters connect between 30 and 60 percent of the time, and so, we’re wrong all the time. It’s how fast we course correct and recognize our mistakes. As long as we’re trying to do good and we’re honest and accountable, there’s very little we can do wrong, I think.