How Athletic Brewing Sells Beer for a Post-Alcohol Generation

0:00The browser is your business's first line of defense against online threats. Keep your employees and data safe with Chrome Enterprise, the most trusted enterprise browser. Create controls that enforce company policies, like rules that prevent employees from printing, pasting, or sharing company data. Access in-depth reports that show the apps and extensions your employees are using and where data is going and coming from. And prevent phishing and malware attacks from reaching your employees with automatic, proactive protections. Visit ChromeEnterprise.Google to learn more. It was just so obvious to me that there was an unmet need in the world.

0:35You know, I was evidence of that. I started to voice that to my wife and friends. So you were like, I want beer for breakfast, lunch, and dinner. How can we make this happen? Yeah.

0:50This week on Bold Names, we've got Bill Schufelt, the CEO and the co-founder of Athletic Brewing. For those of you who don't know, Athletic is a non-alcoholic beer maker, which makes my 10 a.m. beer drinking that much more respectable. For the record, I already respected your 10 a.m. beer drinking. Bill is going to talk to us about Gen Z and their drinking habits, or lack thereof. He's going to talk about the future of the whole non-alcoholic brewing industry, and he's going to talk to us about where his company in particular is going. From the Wall Street Journal, I'm Christopher Mims. And I'm Tim Higgins.

1:23This is Bold Names, where you'll hear from the leaders of the bold name companies featured in the Wall Street Journal. Today we ask, what is the future of beer in an increasingly health-conscious world?

1:41Well, Bill, welcome to the show. When you got into this almost a decade ago, the market for non-alcoholic beer was very small. It was less than 1 % of the overall American beer market. Who did you consider your competition back then? The funny thing is I almost never thought about non-alcoholic beer until I was in the business of non-alcoholic beer almost. I loved good beer, good food, socializing with colleagues and friends and family, and never, ever thought about not drinking really or needing non-alcoholic drinks. And I assume a lot of people didn't. But as I was turning 30, about to get married, taking my career, my health, my sleep, envisioning myself as a future parent, all these things kind of laddered up to less drinking.

2:27And the category really needed a whole reimagination on both product and marketing. So I would actually say you could almost totally restart the clock on the category starting in 2018. Now, there's a few statistics about how far you've come that kind of really blow my mind, right? Right. So as of 2024, you're the eighth largest craft brewer in the U.S. You were valued at roughly$800 million. I'm just curious, you know, who is your competition today? Because it seems like the category has exploded. Yeah. So as you said, we were one of the smallest of the nation's brewers when we launched. In 2017, we were founded.

3:052018, we launched. So we went from under 10 brands in the category to over 200 brands in the non-alcoholic beer category. there's over 150 different non-alcoholic craft beer brands. Athletic Brewing is actually 52 % share of that category. So we outsell the whole rest combined. In that though, yeah, this has gone from about 0.3 % of the beer market to 2 % of the beer market. But most of our national retailers have started to pass 4%, 5%, 6 % of all beer is now non-alcoholic beer. We had our first national retailer pass 20 % of all beer this year. and I looked at that and I was like, wow, this is such an unmet category.

3:45People are not drinking alcohol 99 % of the time they're awake. Wait, I'm hearing a moment there. Previously, people were not drinking alcohol 99 % of the time they're awake. So it sounds like you were like, how can I get people to drink beer the other 99 % of the time? Well, it hit me as such an intuitive moment that people are not drinking alcohol 99 % of the time they're awake. But the alcohol industry treats people as if 99 % of the people are drinking alcohol 99 % of the time. Where I saw this enormous TAM of normal, modern, healthy adults. TAM, total addressable market. Yeah. Which I thought I was just like the perfect average person, poster child for that new future market as health and wellness really emerges.

4:29And it was just so obvious to me that there was an unmet need in the world. And, you know, I was evidence of that. I started to voice that to my wife and friends. So you were like, I want beer for breakfast, lunch, and dinner. How can we make this happen? Yeah. And, but in more seriousness though, I wanted beer every day of the week, but I didn't want to like miss my morning workouts, feel groggy at work. I didn't want, like on the health side, non-alcoholic beer tends to be 30 % of the alcohol equivalent styles calories. So I wanted to be able to hit all my goals, have all the fun, have all the social connection without all the sacrifice of it.

5:07So then I took it to actual data. I was like, okay, is this just me or is this a broader thing? And my wife happened to be in business school and guided me towards all these different survey softwares. And I started to just run actual surveys and get data around this. And I found the consumer base for non-alcoholic beer wasn't 0.3 % of people. It was actually upwards of 50 % of people, almost no matter how I asked the question. And so then it was staring me in the face that there was one of the biggest disconnects and a category hiding in plain sight where the industry was just not hearing the consumer.

5:42Or maybe the consumer didn't yet know they wanted it also. And then that's the lane I was hoping to drive through. It's interesting, your wife's business school experience. I too studied a lot of beer when I was in business school, but I didn't have the same kind of results. I'm curious, what were your sales last year in 2025? So our trailing sales in 2025, we don't typically report out as a private company, but I can say our volumes were up about 24 % year over year versus 2024 in a historically bad beer year. This is probably the worst alcoholic beer year of our lifetime. I think I read the last time in 2024, you did something like more than$130 million in sales.

6:25And that is pretty exciting at a time when brewers your size are really struggling, right? According to the Brewers Association in 2024, more craft breweries closed than opened for the first time in years. And I think here in San Francisco, where there's a lot of breweries and I'm seeing a lot of favorites go away, Anchor Steam, kind of the original craft brewery out of business. They got purchased now. Maybe they'll come back. We don't know. Why are you growing when others aren't? Yeah, and I'm optimistic for Anchor. I hope they've landed in a good spot. And I care so much about the industry and, in general, social connection.

7:03As to why we're seceding and others maybe aren't or maybe there's consolidation or plateauing before the next leg in the alcoholic industry, I think it does come back to like a shifting of generational trends perhaps. And I'm certainly not here to ever stand on a prohibition soapbox. I don't think a 5 ,000-year trend of drinking beer is going away. But what I do think is it looks like moderation is just coming out of nowhere because moderation was totally inaccessible 10 years ago. You couldn't go to a bar and restaurant and get a great, delicious, socially acceptable beverage. and all of a sudden now you have a generation turning 21 who doesn't know what those stigmas of the past 80 years have looked like.

7:48They just look at a menu and athletics on over 20 % of Michelin star restaurants in this country. So you have the best chefs in the country saying, this is a really good beer. And that really like, so you have a generation who there's no stigma about making this choice. They're presented proudly on menus. It's widely available. And then you also have the health and wellness perception. We saw in Gallup data over the summer that for the first time ever, over a majority of US Americans view drinking one or two alcoholic drinks a day is unhealthy. Yeah, I gotta say, I was recently at a social event where the kids were with babysitters.

8:28Everyone was there intentionally to connect with one another, multiple tables in a ballroom. And I looked around and maybe half the people there were toasting with water. And I was like, this is nuts. This is such a departure from where we were. But one thing you're not addressing, though, is there also isn't there also a generational trend for Gen Z to just get together less? I mean, is some of this just the fact that Gen Z is taking fewer risks, socializing less, getting out less? And isn't that a counter trend that potentially endangers your product long term? Well, I think tying back to social connection, I think a lot of recent data is skewed by COVID and like a one-time three to five-year impact there.

9:16I totally feel for this generation that missed a lot of college is maybe missing out on some of the mentorship and work happy hours that my generation had such easy access to. Yeah, work happy hour is dead, according to the Wall Street Journal. Yeah. And then there's like different socioeconomic pressures. I lived above a bar in New York City for two years, and I knew I could get dollar graphs. Wow. Geez, heaven. That would have ended Tim's career. More on the economic side, a pint was so affordable and accessible that it wouldn't make a budget. Cheap wings and beer, right? Yeah. But what we are seeing is as we get a little farther out from COVID, we're starting to see a little more of those trends normalized.

9:58People love to get out in the world looking for that connection. They're finding it in new ways. We're seeing run clubs, sauna clubs, cold plunges at different things like morning get-togethers. But athletic is really trying to drive support for the bar and restaurant industry as well. And I think people are saving those dollars in tight socioeconomic times for those experiences. And those are meals, live music, venues, sports. And so people may be getting together in different ways also. But we're here to add to those occasions, not take away. And like putting that to words differently, almost all BevAlk innovation over the past 50 years is like a one-for-one substitution.

10:39It is the same customer, same occasion, and just trying to them to get them to drink a different product in that moment. Seltzer or hard seltzer or liquor or whatever, right? Yeah, you've seen like hard seltzer and spirit RTDs come for like the light beer market. Right, right. And what Athletic has brought is new consumers. Your additive. Yeah, new occasions, new consumers, new rounds, and bring more people to the table. So we are like pure industry growth for both the off-premise and on-premise. I think that's really exciting for the world. After the break, Gen Z is drinking a whole lot less.

11:18How does Athletic cater to a generation that doesn't like beer? One of the funniest things is when I hear people say, oh, I don't like the taste of beer, one of the ingredients people don't like the most about beer is actually just the alcohol. Stay with us.

11:52pasting, or sharing company data. Access in-depth reports that show the apps and extensions your employees are using and where data is going and coming from. And prevent phishing and malware attacks from reaching your employees with automatic proactive protections. Visit chromeenterprise.google to learn more.

12:15I was talking to a friend the other day who who, because of health reasons, was feeling like maybe he should cut back on drinking alcohol. But he still wants to go to the bars, right? And so he sees it as maybe he'll have an alcohol beer and then a non-alcohol beer, right? And kind of that. And I think you all have talked about kind of the market being a chaser, a pacer, and a replacer, right? Yeah, zebra striping and pacers, chasers, replacers. I hear all these things from bartenders in urban areas, especially with younger audiences. Absolutely. One of the things I, you know, when I drink Run Wild, it really, it does taste like an IPA.

12:54And I think one of the things that you're kind of tapping into is that nostalgic for that taste. But I wonder if young people haven't built up a taste for beer or don't have a tradition of drinking beer, how does that appeal to young people? They don't even know about IPAs, really, do they? I was talking to a young person the other day, one of the youths, if you will, and she was like, oh, IPAs. You know, she was like really shocked at what they tasted like. I mean, it is an acquired taste, I think. Yeah. And that's something we hear a lot and it's a question we get. But I think one of the most interesting things is like there's like a reference point to alcohol in that.

13:32And with Athletic, we are a standalone non-alcoholic beer brand. We don't have a reference brand we have to try to mimic the taste of. We don't have that burden or responsibility. we just use these extremely high quality ingredients and we craft them to be most expressive and the best combination of flavor we can. And in many ways, we're like unburdened by that. And one of the funniest things is when I hear people say, oh, I don't like the taste of beer. In most beers, alcohol is the predominant caloric density of that beverage and the flavor. And one of the ingredients people don't like the most about beer is actually just the alcohol.

14:13And a lot of people do like athletic who don't like the taste of beer. And we've seen that over and over again. I just popped open your Mexican style. You call it Mexican style copper. I think that's because you can't call it a lager, right? For sure. Yeah, there's a whole range of words we can't use per the TTB. Because you're not an actual alcohol beer, right? Yeah, a lot of them have a threshold alcohol content. Um, but you know, most CPG brands are born out of consumer package goods for those who aren't in the industry. Sorry, I'm on a real roll with the abbreviations. I, what I'm going to do is take a shot of beer every time you use one of those words, keep going.

14:53While I'm knee deep in the industry, I could say, so most innovation in the CPG or beverage world comes out of companies looking to hit quarterly earnings, drive results, and it's like focus group generated. What's different about Athletic is we didn't start with that burden. We started with passion, with authenticity. We started from the ground up trying to create something that is literally going to be like a change-making beverage. And we really set out to change the way the world drinks, change expectations for what non-alcoholic beer could be. And that gave us like a total freedom for those expectations.

15:32That said, though, you don't have the brand recognition. You don't have a show on Netflix right now, which is about the genesis of your brand, House of Guinness, for those who haven't seen it. Guinness is doing non-alcoholic beer, Heineken. You have these extremely large mainstream competitors with incredible brands. I mean, we've seen this many times before in CPG, but in tech also where you will have a pioneer that ironically gets eclipsed by the fast following giant, right? Apple is a master of this. So what kind of threat do they represent, right? I mean, are you going to potentially get eclipsed by these brands who have that brand recognition because they can just come in and be like, oh, this is a category?

16:18Fine. We'll do that. Yeah, totally fair. And that's the advice my dad gave me too. When I was about to quit a great finance job to go into this. He was basically, he gave me the version of like, what if Google does it? Like, and I, what if Google releases a non-alcoholic beer? Yeah. And in many ways, we are finding that out like in the past five years that, so we started really scrappy, like very under-resourced and, you know, it was all us with our horsepower on everything we did. and we made the absolute best quality beer we could. We saw basically at that same time Heineken, one of the world's biggest global brewers, launched with their Heineken Zero Zero and has done a great job with that, marketing it and helping build the category.

17:01Since then, we've seen basically every major beer brand in the world, every major craft beer launch into this category over the years. And we're driving a lion's share of the growth year in, year out. And I think that comes soon, the authenticity, the dedication to the quality of the product. And consumers these days also love to know who's like who and what is behind the products I'm drinking. And I think that kind of all comes together with like a really passionate, authentic story. How are you handling the broader economic policies like tariffs? Some of your competitors out there like Constellation Brands, for example, which owns Corona and Modelo, they took a hit last year in part because of tariffs on aluminum, a key ingredient in those cans.

17:41I mean, athletic, we've been in business seven or eight years. I think we've seen six economic cycles since then, including COVID. And I would say one of the hardest decisions we ever made as a company, which turned off a lot of investors. We were going to build our own manufacturing and do everything ourselves with full-time athletic teammates and put the steel in the ground ourselves rather than outsource, where most CPG and beverage outsources to contract manufacturing, which is almost infinitely scalable. It's very rapid. And so we took a punitive economic approach to that, but that was in 2018.

18:18But that's turned out to be very lucky, not only from a quality standpoint, we own every piece of our quality and can just keep reinvesting in our own quality. But when COVID hit, we were operating all our own breweries and we controlled so much more of our supply chain and operations than most companies. And then we've doubled down on that decision now four times. We just finished building our fourth brewery in San Diego. And similar to COVID in the tariff situation, we have a much more onshore domestic athletic run supply chain than most CPG companies. So that has turned out to be the right decision over and over again.

18:56Where it's the wrong decision is when you're growing 200, 300 % a year and your financial models model the brewery as if you're operating at full utilization. Just ahead, Bill says Athletic isn't trying to upend the alcohol market, but he does believe we're in the midst of a shift. We're in such an attention economy, and we think we're on the emergence of an enormous megatrend that's going to take a very long time to play out. That's next.

19:38you know it's interesting i mean you started off i think we're helped by the fact you're non-alcoholic you could do direct to consumer mail people could get it through the mail easier than perhaps uh alcoholic beverages um really did well with whole foods getting into that market i think helped you uh start to build an audience and but you're also doing some marketing things that I think are typical of beer companies. We're accustomed to seeing beer brands sponsoring baseball teams or soccer teams. And you're there, you've got deals with 100 Live Nations, so your concerts, the Seattle Mariners.

20:14You also see you partnering with stuff like the Ironman, the endurance race until 2028. So help me understand there. What's your branding position there? Are you a traditional beer kind of marketing or are you an athletic drinker? Are you going to be the next Gatorade or Prime or something like that? I think we take notes from a lot of different directions. But I think mostly from the start, I tried to think about marketing authentically to who we were as a company and who we were trying to reach. And then with extremely limited resources, we started with the most influential dollars we could, which to me was elite endurance athletes.

20:55And so we teamed up with Ironman and Spartan. Why is that? I mean, because anybody that's done a race, there's tradition to have a beer at the end, I guess, right? Yeah. And then, well, I was also thinking about this trend being the future of health and wellness, like a big part of that. And so as people look for health and wellness guidance, life hacks and stuff, they look to these elite athletes and top performers and fitness influencers. And I thought in limited resources, we'd love to start there with our marketing dollars, but then also sampling, talking to people face to face. because no one was visiting the non-alcoholic beer shelf.

21:30We had to go find those people in the world and bring them back to the non-alcoholic beer shelf. So I was looking for people who are happy, sweaty, thirsty that I could put 1 ,000 cans in the hands of on any given weekend. That's why the name Athletic Brewery? Well, the name actually is just meant to be generally positive, aspirational. I thought athletic was a nice, positive word that fit my lifestyle. but also would resonate with a lot of different people in a lot of different areas. And I thought it was about as broad and positive a tent as you could put up. So take me into the future. You said, you know, I don't think we're going to upend this 5 ,000-year trend of drinking beer.

22:10But I just want to point out that others have upended that trend in the past, right? Like, you know, there was a long period when everyone in Europe, especially the French, obviously, wanted to drink wine instead of beer because it was classier. So these shifts do happen like on a civilization scale. So take us into the future. Like, are you envisioning a future where, you know, we all live to 200 because none of us drink or smoke or suck on Zin pouches? Where are we going? Where do you want to go? I think there's a lot of micro trends in beverage and CPG. There are these fly-by-night celebrity brands.

22:46They have one-year successes and all sorts of different categories and come and go. And we're in such an attention economy. And what we've always tried to do is create a, we think we're on the emergence of an enormous mega trend that's going to take a very long time to play out, similar to maybe like the energy drink category or something like that. And it was this new modern lifestyle fit that was needed, apparently. As I look at the beer industry analog of that, going back 50 years, you had basically lager beer in America, and it was very few breweries. and then light beer emerged. And why light beer was so popular was because it met the nutritional preferences of that next generation.

23:28And light beer is one of the biggest megatrends we've ever seen in beer. Oh, you're really taking me back to the light beer age. But coming right on the tails of that, people wanted the flavor though. They didn't just want the nutritionals and light beer has been declining for the last 25 years because it doesn't really meet those flavor expectations. Yeah, good riddance. So you see different categories come for the flavor and you see artisanal craft brewers bring more flavor and more styles. You see the flavored RTDs and beverages like that. Where I see non-alcoholic beer coming in here is the confluence of the light beer nutritionals and the flavor of the more recent trends into one enormous big new trend that can meet both of those preferences and really aligns with modern health preferences.

24:11And that's an enormous marketing responsibility on us. It's a quality responsibility. We can't say those things and then not deliver on it. So we focus relentlessly on the resources to deliver on quality, and we're working on educating the next generation of consumers to evolve the culture with us. But if we can meet there and deliver, we've won 185 Global Taste Awards now. This is going to be a really big trend. It's just going to take a time to play out. You're getting me thirsty, Bill. Thanks for coming on the show. It's great talking to you. Thank you so much. It's an honor. I had a lot of fun.

24:46And that's bold names for this week. Our producers are Alexis Green and Danny Lewis. Our video producer is Kasha Brusalian. And our fact checker is Aparna Nathan. Jessica Fenton is our technical manager. Jessica and Michael LaValle are our sound designers. Jessica also wrote our theme music. Our supervising producer is Katie Ferguson. Our development producer is Aisha Al-Muslim. Chris Sensley is the deputy editor and Falana Patterson is the Wall Street Journal's head of news audio. For even more, check out our columns on WSJ.com. We've linked them in the show notes. I'm Tim Higgins. And I'm Christopher Mims.