At a time when the U.S. beer industry is facing the lowest consumer demand in over 40 years, “Athletic Brewing” has plans to double its annual capacity in 2025. The company is the 20th largest brewery in the U.S. overall but it’s giving even the most well-entrenched brands a run for their money. Athletic Brewing’s key to success is all tied to a missing ingredient – alcohol. In fact, Athletic is now the largest non-alcoholic brewery in the U.S. after jumping on the low-to-no alcohol trend long before it was on most people’s radar.
Athletic Brewing got its start after hedge fund trader Bull Shufelt left his job in 2017 to pursue what he felt was a huge, untapped market – nonalcoholic (NA) beer that people would actually want to drink. Shufelt, who is also an ultramarathon runner, quit drinking in 2013 and thought it could be an easy win, considering the awful tasting stuff that companies were passing off as NA “beer” at the time.
“I had this very positive life choice, but I genuinely loved great beer and great food and I wanted that beer again and it blew my mind that it didn’t exist, Shufelt recalls. “And I saw all the health information that used to be totally hidden was now at people’s fingertips on phones and fitness wearables, iWatches and everything, podcasts.” He felt that exposure to the positive effects of not drinking alcohol was destined to spark “a huge megatrend.”
Shufelt’s first hurdle – and enormous by any count – was finding a brewing partner that was interested in making a nonalcoholic beer. Shufelt himself had spent two years researching the business side but knew nothing about making the actual product. At the time, NA beer sales accounted for less than 1% of total U.S. beer sales and was considered a very small market. However, Shufelt’s own research showed that a majority of beer drinkers would buy NA beer if it tasted like the real thing.
After being turned down by hundreds of brewers, Shufelt in desparation posted a job listing to an online message board for professional brewers. It caught the attention of craft brewer John Walker, who was one of the first to listen to Shufelt’s pitch. Walker hesitated at first but, after discussing it with his family, decided it was not just a technical challenge he was interested in, but it could also do some good in the world.
Shufelt and Walker both are attracted to the possibility that their product might actually help millions of people. Part of Shufelt’s research dove into the downsides of alcohol consumption in America. He cites some shocking numbers:
- Some 15 million U.S. adults suffer from documented alcoholism.
- 1 in 5 deaths under the age of 50 is related to alcohol.
- Research suggests that alcohol may cause over 5% of cancers.
- Employees miss 232 million work days a year due to alcohol.
- 40% of incarcerated people were drunk when they committed their crimes.
After spending around nine months of painstaking work to perfect their brewing process, they had their first beers – Upside Dawn Golden and Run Wild IPA. Shufelt then set out to find the financing for a proper brewery, something he thought would take only a few weeks, considering his extensive network of wealthy investors. In reality, “It took 120 meetings and nine months.”
In that time, Shufelt set up tasting booths at marathons while the company pursued building an online following. Being able to sell online and ship anywhere in the country, unlike their alcoholic competitors, became a huge leg up. They started releasing limited edition beers every Monday, resulting in as many as 50 one-off beers a year. That ballooned to 90 limited edition varieties in 2022.
This approach was an absolute phenomenon for the brand with some batches selling out in under a minute! In its first year, more than half of the company’s sales came in through this channel as opposed to retail stores. And as the brand’s recognition grew among beer lovers, it helped Athletic get its products on even more retail shelves.
Today, Athletic Brewing owns roughly 20% of the U.S. NA beer market after generating more than $130 million in sales last year. The company has raised almost $224 million in total funding that puts its total valuation at around $800 million. Some of Athletic Brewing’s investors include Keurig Dr Pepper, ex-NFL stars J. J. Watt and Justin Tuck, TOMS Shoes found Blake Mycoskei, celebrity chef David Chang, and supermodel Karlie Kloss. Country singer Walker Hayes, more than eight years sober, made Athletic his tour’s official beverage last May. Athletic Brewing in August of last year also became to first non-alcoholic beer partner of Arsenal F.C. (The Wall Street Journal, Fast Company, The Founder Spirit)
