Keurig Dr Pepper has invested $50 million in Athletic Brewing Co., the nonalcoholic beer-maker, as part of a $75 million fundraising round by Athletic, the companies announced Wednesday.
The investment by Keurig, which also owns the brands Canada Dry, Snapple and Green Mountain, is the beverage giant’s second foray into the nonalcoholic beverage category, after a deal to acquire a nonalcoholic cocktail brand called Atypique this summer. Keurig has said it wants to make more acquisitions and has about $20 billion to do so.
The deal is a sign of continued interest in the fast-growing category of nonalcoholic beer, as younger consumers drink less and care more about their waistlines. Sales of nonalcoholic beer are skyrocketing in the United States, growing almost 70% from 2016 to 2021, to about $670 million in annual sales, according to Euromonitor.
That is still a tiny portion of the beer market, but the popularity of nonalcoholic beer stands in stark contrast to overall sluggishness in beer sales. Beer giants such as Heineken, Budweiser and Sam Adams have released nonalcoholic alternatives in the last five years.
Athletic Brewing was founded in Stratford, Connecticut, in 2017 by Bill Shufelt, a former trader at the hedge fund Point72, and John Walker, a former craft brewer. It now sells its products – including lager, light beer and sparkling water – at retailers such as Trader Joe’s. With its new backer, Athletic is looking to expand in Australia, France and Spain.
The company was founded with an eye toward people like Shufelt who do not want to drink alcohol nightly. That desire came into full effect when he was training for an ultramarathon in 2013, he said.
“I stopped drinking for a month and felt incredible,” Shufelt said. “And it was kind of a no-brainer for me to not go back to drinking – but then I was at all those drinking occasions, and there was nothing on the menu for people who were not drinking.”
Shufelt said he sought to create a nonalcoholic beer that could be enjoyed as a beverage, not simply stand in as a replacement. He says that 80% of his customers drink alcohol, and three-fourths are between the ages of 21 and 44. About half are women.
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