Athletic Brewing and the NA Beer Revolution | Brewing the Impossible | 1

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0:19It's January 2nd, 2017. At the offices of the investment firm Point72 in Stamford, Connecticut, Bill Shufelt pulls up a chair in a glass-walled meeting room. Shufeld has the broad frame of a former college football star and is seen as confident and outgoing, the kind of guy who winds up the center of attention at corporate events and parties. But today, he's full of nervous energy. He has a big announcement to make, and he's not sure how it will go down. Shufeld's boss stands at the front of the room to kick off the team's first meeting of the new year. All right, everyone, welcome back. Hope you all had some good time off, didn't hit the eggnog too hard.

0:58Anyone have any major epiphanies over the break? The room chuckles, and for a second, Shufelt considers letting the moment pass because once he says what he's about to say, there's no taking it back. But then he raises his hand. Actually, I do. Everyone turns to face him. Shufelt takes a deep breath, then says the most important words of his career. I didn't want you to all hear this from HR, but I gave my notice this morning. I'm leaving the company. What? What's this about? You're kidding me. Schufeld is leaving. Schufeld has been with.72 for six years, focusing on health care stocks and doing well.

1:39His boss tries to keep his composure. Well, we'll be sorry to lose you, Bill. Mind if I ask where you're heading? Those cowboys at Citadel aren't stealing you, are they? Schufeld shakes his head, then steals his nerves and finally shares the idea that's been burning inside him. No, I'm going out on my own. I'm going to start a brewery that makes non-alcoholic beer. What's that about, bud? You've got to be kidding me. It takes a moment for the other traders to realize this isn't some kind of post-Christmas joke. One of Schufelt's colleagues leans across the table. Wait, you're serious? I mean, it's great that you don't drink and all, but do you really think there's a market for no-alcohol beer?

2:20Most of that stuff tastes awful. Yes, exactly. I've been researching it, and I think that's the problem. Most non-alcoholic beer is undrinkable. I'm going to change that. The colleague nods, still unconvinced. Well, have you talked to Jackie about this? Shufelt smiles. He understands the implication. He's about to walk away from a very healthy paycheck to sell a product that, as far as anyone in the room can tell, nobody really wants. His colleague's asking him if his wife is truly okay with this decision. Shufelt looks his friend right in the eye. suddenly feeling much more certain, Jackie's the one who's making me do it.

3:01At the moment, Schufelt's plan sounds almost ridiculous because in 2017, non-alcoholic beer isn't a booming new category. It's a punchline. The company that Schufelt's about to start will be called Athletic Brewing and he's betting everything on his belief that millions of people want great beer without the buzz. But brewers have been chasing that idea for decades. So the real question is, what makes Schufeld think he's the one who can crack it?

3:42From Audible Originals, I'm David Brown, and this is Business Wars.

4:08When Bill Shufelt walked away from a high-flying finance career to start brewing non-alcoholic beer, it sounded like madness. A business plan built around removing a product's main selling point. But almost a decade later, his startup, Athletic Brewing Company, has become one of the flag bearers of the non-alcoholic beer revolution, a movement that reflects a huge generational shift in how people relate to alcohol. Today, Athletic is valued at more than$800 million, and it competes head-to-head with multinational beer giants like Heineken, whose rival brew, Heineken Zero Zero, has also been a leader in the Zero Proof Revolution.

4:52But Schufeldt's journey didn't begin with a grand mission to change the drinking culture. It began with something much more personal, a desire to change himself. This is Episode 1, Brewing the Impossible.

5:14It's 2013, four years before Bill Shufelt quits his job. It's 5 a.m. and he's already halfway through his usual morning workout, running on a treadmill before heading into the office. Only today, something feels off. Shufelt feels far more out of breath than he should be. His lungs burn. His legs ache. Anyone who works out knows that sometimes you just have an off day, but this isn't just one bad morning. It's been going on for weeks. Shufelt was a star football player at Middlebury College in Vermont and now runs ultramarathons. Competition gives him a rush, the same kind he gets from his career in finance.

5:58Shufelt always wants to give 100%, which is why this worries him. He's only been running hard for 20 minutes, but he's already huffing and puffing. He has a race in a few weeks and now he's wondering if he'll even be able to finish it. Shufelt steps off the treadmill and leans forward, hands on his knees, trying to recover. When he straightens up, he catches a glimpse of himself in the gym's mirror and suddenly a thought flashes through his mind. It's the alcohol. His job as a trader means entertaining clients at least three or four times a week and that usually means booze plus shufelt is a sociable guy there's also hangouts with friends date nights with his wife birthdays bachelor parties in fact there's rarely a night when he isn't drinking something it's not that he feels out of control or has a problem with alcohol but he knows that when something is slowing him down, he doesn't like it.

6:58So right there in the gym, still catching his breath, he makes a decision. He'll stop drinking for a month to see how it feels.

7:10At first, Shufelt treats the whole thing like an experiment. But within a few weeks, he begins to notice real changes. His work and his workouts improve so dramatically that he decides to carry on. Three months later, he still hasn't had a drink, and he feels great. He's sleeping better, his mood is lifted, and he's feeling more focused and productive than ever before. Shue felt worried that giving up alcohol would make him stand out socially, that people would ask questions or assume something was wrong. It could even affect his career. But to his huge relief, his work colleagues are supportive.

7:49But Shue felt's about to discover that the rest of the financial industry isn't always so forward-thinking.

8:02Sometime later, Shufelt is having dinner at an upscale steakhouse. The food has just arrived and the waiter smiles at the group sitting around the table. Can I get you gentlemen another round of drinks? One of the guys looks around enthusiastically, his cheeks already flushed from the first bottle of wine on top of several pre-dinner cocktails. What do you think, fellas, another bottle of the red? Shufelt smiles and beckons the waiter over. We'll have another bottle of the Barolo and a Diet Coke for me. The guy who asked for more wine catches this and looks over. No wine for you. What's the matter?

8:37You crashed your car or something? The joke lands with a dull thud. Despite himself, Shufelt feels his face flush with irritation. Nah, I'll just have a busy day tomorrow. Besides, too much alcohol affects my ultramarathon times. The slight awkwardness of the moment is smoothed over when the waiter returns with a bottle of Barolo and Schufelt's soda. But Schufelt can't shake his annoyance. Not only has he been singled out for not drinking, but as he looks down at the$200 tomahawk steak in front of him, He suddenly feels foolish for having to pair it with a Diet Coke. This is his second soda of the evening, and the artificial sweetness is beginning to taste sickly in his mouth.

9:25Ordering soft drinks in a nice restaurant always makes him feel like a six-year-old sitting at the grown-up's table. Still, he doesn't want to let his irritation show, so he keeps his expression neutral, takes a bite of steak, and returns to the conversation buzzing around him. But that frustration lingers in the back of his mind.

9:50It's 2014, and Shufelt and his wife Jackie are walking along a Caribbean beach as the sun sets. They've had the perfect vacation day, swimming in the sea and relaxing on the white sand. And now they're looking forward to dinner.

10:04Bill Shufelt:So, what do you think? Shall we head back to the hotel, or we could try the crab shock? It's supposed to have the best seafood on the bay. Shufelt doesn't answer. Instead, he stares out over the waves, clearly somewhere else in his head. Bill, you there? Huh? Oh, sorry. Yeah, let's go for the seafood, I guess. You okay? What's going on? By now, Jackie has learned to recognize when something is troubling her husband. It's just, you know, we're going to go to the restaurant and I'm going to have, what, a virgin pina colada? then the food will come and I'll either have to get another one which gets kind of gross or switch to a coke or seltzer which just gets boring.

10:48Honestly, I don't know what I wouldn't give for a really nice cold beer right now. I don't want to drink alcohol again or anything, but I do feel kind of silly always ordering sodas. I just wish there was a really excellent beer with no alcohol in it so I could have that taste again. Somebody should make one.

11:06Bill Shufelt:Why don't you? Shufelt is so lost in his own thoughts, he almost misses his wife's words. What? Why don't you? If you want a beer with no alcohol, why don't you make one yourself? People start businesses all the time. You're smart. You could do it. Shufelt stops in his tracks. A new vision already beginning to form in his mind.

11:35Later that year, Shufelt is sitting at his kitchen table, long past midnight, bathed in the glow of his laptop. Ever since he and Jackie returned from their Caribbean vacation, the idea of creating a high-quality, non-alcoholic beer has taken over every spare minute of his life. He's still working at.72 and hitting the gym every morning. But now, when he gets home, he dives into his research every night, trying to understand why non-alcoholic beer has always been so disappointing. Jackie, who is studying for her MBA, has taught him how to analyze potential market opportunities. And, combined with his own background in forensically scrutinizing companies, a fascinating picture starts to come together.

12:22Shufelt learns that non-alcoholic beer first gained traction in the U.S. after alcohol was banned in the 1920s. With their products now illegal, many breweries survived by producing non-alcoholic beer, known back then as near-beer. To make it, they'd brew regular beer, then boil off the alcohol. But this boiling process also tended to destroy the flavor of the beer itself. The result was something that resembled beer but tasted terrible. And crucially for Schufeldt, no one in the U.S. has really updated this process for nearly a century. Back in 1990, Anheuser-Busch, the brewery behind Budweiser and Michelob, introduced a non-alcoholic beer called O'Doul's, brewed using a similar method.

13:09But O'Doul's never really took off. By 2017, O'Doul's had become that dusty bottle at the back of the cooler that everyone has kind of forgotten about. But while this has all been useful research for Schufeld, what really captures his attention are the numbers he's looking at right now. He's been gathering data about what people think about non-alcoholic beer, and the results are blowing his mind. According to industry data, non-alcoholic beer accounts for just 0.3 % of beer sales in the U.S. And yet over half of the people he surveyed say that if there were a great-tasting non-alcoholic option, they would buy it.

13:54That is an enormous gap. Shufelt realizes there's a huge potential market out there that the major breweries simply aren't serving. Maybe because they've never bothered to imagine it exists. As he stares at the data on his laptop screen, Shufelt feels a wave of excitement wash over him. Because, for the first time, the idea that began as a casual complaint on a beach vacation is starting to look like something bigger. Maybe even a once-in-a-generation opportunity.

14:34It's New Year's Day 2017, more than two years after Schufeldt and Jackie's Caribbean vacation. Since then, Schufeldt has become a man-possessed. Every spare moment has been devoted to investigating what it will take to make a high-quality non-alcoholic beer and how it might transform the entire sector so that not drinking is no longer a source of stigma, but instead a healthy, positive lifestyle choice. That evening, he sits down with his wife and makes his pitch, outlining the huge gap he sees in the market that's just waiting to be filled. Jackie listens carefully, and then gives him the same answer she gave him on the beach.

15:18Go for it. But Shufelt wants to be clear with her about what that really means. This is not a side hustle. It'll mean quitting his job, walking away from his Wall Street salary, and risking everything they have. And there's another complication. He's never brewed beer before, not even with a home brewing kit. Now he's talking about setting up a commercial brewery to make a product that, for all he knows, might not even be possible to make. Once again, Jackie tells him to go for it. She doesn't want to be sitting here in 20 years listening to how he never followed his dreams and wondering what would have happened if he tried.

16:00For a moment, Shufelt feels almost overwhelmed by the depth of his wife's unconditional support and belief in him. He embraces her, knowing that the next day, he's going to walk into work, quit his job, and throw everything at a new adventure that could make or break his family's future.

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17:37It's February 2017, and Bill Shufeld is in trouble. It's been six weeks since he left his lucrative career in finance to follow his dream of creating a high-quality non-alcoholic beer. Based on his market research, he figured he would do what almost all craft beer companies do, which is to partner with a contract brewer who will help him develop the recipe and actually produce the beer. The only problem is that every single contract brewer he contacts laughs at him. They say there's simply no way to make a non-alcoholic beer that doesn't taste like garbage. They want nothing to do with it. Schufelt tries to explain that brewers in Germany have developed new techniques to create non-boozy beer that actually tastes great.

18:24But the answer is always the same. No way. At the beginning of this process, he put a map of the United States on his wall, covered in pins, each one signifying a potential partner. but gradually each pin has come off one by one and now the map is virtually empty. Several of the contact brewers even rubbed salt in the wound telling him with a smirk that they're doing him a favor by saying no because there's simply zero demand for non-alcoholic beer and if he keeps pursuing this idea he's going to lose all his money. Now when people in any industry say you can't get there from here they might really be telling you you're onto something.

19:09Perhaps you remember our series on FedEx. It, too, faced disbelief and mockery from people on the inside. Of course, it always makes sense to ask, if this is such a great idea, why aren't others doing it? But sometimes, the most valuable signal in business isn't excitement. It's the one flashing, give it up, there's nothing here. Instead of giving it up, Shufelt doubles down. If he can't find a contract brewer to work with, he'll just have to do it himself. And that means raising money, finding a master brewer, and building an entire new brewery from scratch.

19:52A few weeks later, Shufelt is staring down at the blue glow of his phone, stealing himself before answering. Hello, Bill Shufelt speaking. Hi Bill, it's John Walker here, calling from Santa Fe. Nice to finally connect. Shufelt feels a surge of excitement and nerves. John Walker is a master brewer who has won numerous awards for his original and daring approach to craft beer. After being rebuffed by every commercial brewery he approached, Shufelt has been advertising for a master brewer to come in and help him develop a new kind of alcohol-free beer. The only problem is he gets the exact same response every time.

20:30As soon as they hear the words non-alcoholic beer, they laugh and hang up. So Schufelt has been forced to resort to a little underhanded trick. He began posting job ads without mentioning he was working on non-alcoholic beer. Instead, his ads talk about how it's a chance to explore, quote, the most innovative sector in craft beer. Now, he finally has a talented master brewer on the line. But everything depends on keeping him there long enough to explain the idea. Hi, John. Thanks so much for getting in touch. But before we start, promise me one thing, okay? No matter what, don't say no right away.

21:08Whatever we talk about, just take the weekend to think about it first, okay? Um, okay. All right. Well, now what I'm trying to create is a brand new non-alcoholic craft beer. Uh, sorry. Wait a minute. Did you just say non-alcoholic? You mean like O'Doul's? That stuff's awful. Thanks, but I think it... Now, come on. You said you'd hear me out. Shufelt can feel Walker slipping away. That same knee-jerk rejection he's come to know so well. But he has to keep Walker interested. He's running out of options. I'm not talking about making another O'Doul's. I agree, it's swill. What I'm talking about is something brand new.

21:46A genuinely great-tasting beer that just happens not to have alcohol. Something you'd actually be proud to drink and proud to make. Is that even possible? Well, not using the old methods, where you make a regular beer, then boil a life out of it. But I've been talking to some master brewers over in Germany, and they've figured out new ways of approaching the process. There's a whole new world of techniques out there, but no one over here even knows about it. Germany, huh? Well, they do know their beer. It's just, do people even want non-alcoholic beer? Schufelt can feel the change in Walker's tone, and knows it's time to play his ace card.

22:26That's just the thing. I've been doing market research, and 55 % of people say they would regularly drink a no-alcohol beer if it tasted great. But we don't need to capture 55 % of the market. We just need 1%. The U.S. beer market is worth about$115 billion a year. Do you know what 1 % of that is? A lot? Exactly. This is a space the big breweries have missed, and it's there for the taking. Think about it. Budweiser, Brooklyn Brewery, all those guys, they all chase the one hour a day when people drink beer. But what about the other 23 hours? What about all those moments when you'd love a beer, but you don't want to get drunk?

23:09That's all up for grabs. Well, listen, Bill. This is all a lot to take in, but I did promise to hear you out. So give me the weekend to think about it, and I'll get back to you on Monday. Schufelt feels a wave of relief. It's not a yes, but it's also not a no. And right now, that's progress. I want to underscore something here so it doesn't slip away. One thing experienced founders learn is that you don't always need to dominate a market to build a huge business. Non-alcoholic beer barely registers in the current market, but Schufelt isn't pitching that market. He's pitching the whole U.S. beer industry.

23:52You capture even 1 % of that, and you've got a massive company.