Speaker 1: This is Bloomberg Business Week from Bloomberg Radio, a Bloomberg
Speaker 1: News team writing during the pandemic that after long days
Speaker 1: of zoom calls and homeschooling, people are finding ways to
Speaker 1: keep their spirits up to him literally with spirits. And
Speaker 1: we know this has been one of the big stories
Speaker 1: of the pandemic. We've talked a lot about alcohol and
Speaker 1: the consumption of it. Yeah, and look, I think that
Speaker 1: January is a time when we think about ways to
Speaker 1: reset and dry. January is something that we've certainly seen
Speaker 1: a lot of people attempt to do exactly right. It's
Speaker 1: a time to kind of maybe cleanse the head, the
Speaker 1: bind all of it. Someone who knows about that is
Speaker 1: our next guest, Bill Shufelt. He is co founder and
Speaker 1: CEO of Athletic Brewing. He's maker of craft non alcoholic beers,
Speaker 1: and he joins us on the phone in San Diego. Um, Bill,
Speaker 1: so good to have you here with Tim and myself.
Speaker 1: First of all, Happy New Year. How are you hi, Carolinton?
Speaker 1: Thanks so much, trying me Happy dry January, doing wild
Speaker 1: dry January. So tell us about that, because it's often
Speaker 1: it follows what is often a busy holiday season where
Speaker 1: there is lots of beverages of the alcoholic kind. Uh
Speaker 1: this year maybe a little bit differently because of or
Speaker 1: it was a little bit different because of COVID. Tell
Speaker 1: us about dry January and what it means. Yeah, it's
Speaker 1: exactly that. I mean. Going into the new years such
Speaker 1: a great time for people to kind of hit pause
Speaker 1: goal toe and thinking about what they want to achieve
Speaker 1: in the year ahead. That could be professionally, it could
Speaker 1: be with their diet, it could be workouts, it could
Speaker 1: be sleep, mindfulness, relationships, anything. And there's one pretty consistent variable.
Speaker 1: If you pull alcohol and some unhealthy eating out of that,
Speaker 1: it makes it really easy to focus on what your
Speaker 1: goals are and like really kick start the year in
Speaker 1: a productive way. And it's a trend that's been increasingly popular,
Speaker 1: like exponentially so over the past few years. UM over
Speaker 1: US adults participated in dry January last year, and anecdotally
Speaker 1: it feels much higher this year. Bill, I know the
Speaker 1: company's in sort of growth mode right now. Um do
Speaker 1: you see a big uptick in sales in January? Typically
Speaker 1: we do, um YEA. So the average uptick month over
Speaker 1: month from January to December the past two years has
Speaker 1: been about thirty UM. I will say this year, our
Speaker 1: website traffic is up about month month over months even Wow.
Speaker 1: So what does that mean in real numbers? UM? Yeah,
Speaker 1: so in terms of so it's estimated that over fifty million,
Speaker 1: So over fifty million Americans specifically participate in Drive January.
Speaker 1: But in the broader population of US adults have point
Speaker 1: one drinks or less per week. So there's a big
Speaker 1: misconception about the like the pool of adults who don't
Speaker 1: drink on any given week, UM, where non alcoholic beverages
Speaker 1: has always been thought about these really small penalty box
Speaker 1: markets like people in recovery, people who are currently not
Speaker 1: drinking first very specific medical reason, where really it's actually
Speaker 1: the majority of adults and the majority of the days
Speaker 1: of the week where not drinking may make sense. And
Speaker 1: then at the beginning of the year almost more south
Speaker 1: where like those markets triple basically UM in terms of
Speaker 1: the category growth for non alcoholic beer, non alcoholic gear
Speaker 1: as a whole, including all the big macro brands that
Speaker 1: have been out forever UM it for so Athletic bring
Speaker 1: launched in two thousand eighteen, UM non alcoholic beer grew
Speaker 1: six in two thousand, two thousand nine, and in it
Speaker 1: grew over across the country. UM were but like as
Speaker 1: our company goes, were having a bigger and bigger impact
Speaker 1: on those numbers. UM the craft segments specifically grew three
Speaker 1: hundred and nine percent last year in craft non alcoholic beer,
Speaker 1: and athletic had a sixty one percent share of that market. Tim,
Speaker 1: you're a non alcoholic I am, and and it's interesting.
Speaker 1: I'm not exclusively a non alcoholic beer drinker. But that's
Speaker 1: the reason why I wanted to get Bill on our
Speaker 1: show is because the way that my own habits have
Speaker 1: changed during the pandemic and also with with starting this
Speaker 1: new job, which requires me to get up so much earlier.
Speaker 1: So what I've decided to do is actually not drink
Speaker 1: alcohol during the week. A friend of mine made the
Speaker 1: recommendation to me, who hosts radio very early in the morning,
Speaker 1: and he said, that is the key to a good
Speaker 1: night's sleep. Um. And I actually drink. I do drink
Speaker 1: athletic athletic brewing beer. UM. But it's also interesting because
Speaker 1: I've noticed that the marketing is is not traditional beer marketing, right.
Speaker 1: This is a company that that seems to embrace the
Speaker 1: idea of UM. It's sort of like you know, Bill,
Speaker 1: I think of Patagonia, like the company Patagonia. When I
Speaker 1: see your marketing, it's very focused on like the outdoors
Speaker 1: and skiing and mountain biking. UM environment tied to the environment.
Speaker 1: What is the message that you're going for, because, as
Speaker 1: you mentioned, it does seem like non alcoholic beer has
Speaker 1: has gotten a really bad rap because in the past,
Speaker 1: bad taste has been associated with it. Yeah, it's so funny,
Speaker 1: and it's like what the company was born out of.
Speaker 1: It's exactly the occasion set that you're talking about. I
Speaker 1: was a huge foodie, craft beer guy. I loved all
Speaker 1: sorts of social family every like all sorts of normal occasions.
Speaker 1: But I also had this very serious stage job at
Speaker 1: a large hedge fund. I loved waking up at five o'clock,
Speaker 1: working out, being on point all day. I was starting
Speaker 1: to run ultra marathons on the weekend and really in
Speaker 1: that alcohol had a smaller and smaller place, but I
Speaker 1: still wanted a great beer I could have during the
Speaker 1: week and wake up at five o'clock. And I quickly
Speaker 1: realized in cutting back on alcohol, I was sleeping right
Speaker 1: through the night for the first time in years. I
Speaker 1: was on point all day. My workouts were great, and
Speaker 1: it was like the best life pack I'd ever uncovered.
Speaker 1: And so like my very normal modern adult lifestyle led
Speaker 1: us in this direction to discover non lcohol beer. And
Speaker 1: then when I got there, I found out non alcoholic beer.
Speaker 1: If you take out the alcohol, which is a diuretic
Speaker 1: and super dehydrating, non alcoholic beer is actually full of electrolytes,
Speaker 1: it's anti inflammatory, it's super low in calories. Our flagship
Speaker 1: Goldenhil's fifty calories and removed um, so you can kind
Speaker 1: of have your cake and eat it too and get
Speaker 1: a great night sleep, not of all the calories in
Speaker 1: the weekend and stuff. Um. In terms of the brand
Speaker 1: ethos um, we really want to make non alcoholic beer
Speaker 1: positive and aspirational for the first time. And we're all about.
Speaker 1: The thing that made me go from like even considering
Speaker 1: quitting a very stable financial job was the positive impact
Speaker 1: we could have. And that's all positive impact on our
Speaker 1: customers health, activity, fitness, and ultimately then their communities in
Speaker 1: the environment. And yeah, we donate two percent of all
Speaker 1: sales the trail and park cleanups. And it's like in
Speaker 1: terms of being all about being healthy, active, outdoors and inclusive. Um,
Speaker 1: we only get one chance at this environment, and we
Speaker 1: are making a huge den as a company having it
Speaker 1: hard coded in our ethos from the start, and we'd
Speaker 1: really like to see more companies do that, honestly, Like
Speaker 1: two of sales isn't the biggest number in the world,
Speaker 1: but it makes a huge den But if you get
Speaker 1: enough people doing it, that two percent becomes something significant
Speaker 1: and impactful. Hey, but one thing I want to ask you.
Speaker 1: When I said, like, give me some more of the numbers,
Speaker 1: you said, website traffic up month over month. So are
Speaker 1: you guys profitable? And I'm trying to just get an
Speaker 1: idea because the non alcoholic beverage market, um, whether it's
Speaker 1: beers in spirits and things like that or just water
Speaker 1: and juices, I mean, it's massive. We have so many
Speaker 1: choices nowadays. So I'm just trying to get an idea
Speaker 1: of the financials for you. I'm thinking about our audience
Speaker 1: who are like certainly into this and they're looking for
Speaker 1: alternatives and disruptions, certainly in the beverage market. So give
Speaker 1: me an idea. Are you profitable? What kind of sales
Speaker 1: are you seeing? And where are you selling? Yeah, Um,
Speaker 1: so we are nationwise on our website. Um, we're pretty
Speaker 1: much the only true e commerce care platform there is
Speaker 1: because not alcoholic beer, we can ship direct the customer
Speaker 1: nationwide off our website, which is a huge advantage and
Speaker 1: that's been soaring during covid UM and with everyone shopping
Speaker 1: from home in we grew over despite having pretty much
Speaker 1: our marketing ideas taken off the table. Um. And yeah,
Speaker 1: we finished in the mid double digit millions in revenue UM,
Speaker 1: and we're planning to do over three times that year ahead. UM. Yeah,
Speaker 1: So we're super excited that we're basically able to exceed
Speaker 1: our goals for the year, even even with the environment
Speaker 1: we're currently and and in terms of profitability, we weren't
Speaker 1: profitable last year, but a big part of that is
Speaker 1: we purchased a big facility in southern California where we
Speaker 1: could connects our production and really go national. Well let's
Speaker 1: talk about this production. Um, what are the what is
Speaker 1: the product lineup that you have right now? And how
Speaker 1: are you thinking about expansion? Yeah? So we have two
Speaker 1: flag three flagships that have won awards all over the
Speaker 1: US and internationally. UM World Beer Awards, International Beer Challenge.
Speaker 1: Our flagship run Wild ip A just won the gold
Speaker 1: in the US Beer Championship. They're all very approachable. UM
Speaker 1: are so our upside don golden nails, fifty calories crafted
Speaker 1: to remove gluten. It's incredibly like drinking slightly hotty pills
Speaker 1: are basically UM a great crisp beer for any occasion.
Speaker 1: Our run Wild i p A is a super approachable
Speaker 1: West Coast I p A seventy calories crafted U made
Speaker 1: with all organic grains. UM and that's probably our top
Speaker 1: selling beer. And then UM, probably our hardest to get
Speaker 1: beer is our freewave Hazy I p A, which is
Speaker 1: now year round as well. UM that's available for subscription
Speaker 1: on our website. Do you have UM plans to continue
Speaker 1: to add to the product lineup and and how do
Speaker 1: you also make sure that you you don't keep running
Speaker 1: out of these beverages that people want. Yeah, so capacity
Speaker 1: always was our biggest problem, especially in two that's nine
Speaker 1: UM and through we have limited releases where they sell
Speaker 1: out online in thirty seconds and people would be extremely
Speaker 1: frustrated by that. Yeah, that's good. It's kind of a
Speaker 1: good problem to have. I think it's good, but it's
Speaker 1: super frustrating. If people are actually on the website refreshing
Speaker 1: it and can't buy it, it's it's not a great
Speaker 1: outcome because they move on. They can move on. Yeah,
Speaker 1: and so that is a big part of why we
Speaker 1: increase production this year is just to better serve our customers. Um.
Speaker 1: But yeah, it's we own the only two facilities in
Speaker 1: the country that are dedicated entirely to non alcoholic beer. UM,
Speaker 1: so we can pretty much right now make as much
Speaker 1: beer as the entire category is. So we are definitely
Speaker 1: investing for the future. Are huge believers in it. UM.
Speaker 1: Relative to the rest of the world, the US has
Speaker 1: an enormous non alcoholic beer gap um. The European non
Speaker 1: alcoholic beer market is over thirty times as big as
Speaker 1: the US non alcoholic beer mark. UM. So there's a
Speaker 1: ton of potential for a very durable growth trends here. Hey,
Speaker 1: last question, can you go it alone? And Haser Buscher,
Speaker 1: one of the big guys, calls you and said, listen,
Speaker 1: we want you as part of our portfolio. Can be
Speaker 1: a good thing. Um, But I don't know if that's
Speaker 1: the kind of identification you want, because you guys seem
Speaker 1: like you're going your own way here. We're so focused
Speaker 1: on our own growth and goals and we've been laying
Speaker 1: bricks forever UM for like a break that year, like
Speaker 1: it's coming ahead. UM. We feel like we're in the
Speaker 1: second or third anything I could see an I t
Speaker 1: o at some point. Our team is super proud of
Speaker 1: what we've built UM and behind that, like we have
Speaker 1: an incredible investor team who we haven't even gone public with. UM,
Speaker 1: do you want to do you want to go public now?
Speaker 1: Because I was going to ask you who's behind you guys?
Speaker 1: Is it Angel investing? It doesn't sound like you guys
Speaker 1: are only you're not bootstrapping it. Yeah. So I've actually
Speaker 1: never talked about this publicly, but we do have a
Speaker 1: We have been incredibly fortunate about the people who have
Speaker 1: found our beer in the world and reached out UM.
Speaker 1: Some huge names in that including J. J. Watt isn't
Speaker 1: the early investor of ours supporter he posts sometimes he
Speaker 1: like sneaks it into his Instagram stories sometimes Lance Armstrong
Speaker 1: UM who Lance was famously a very early Valtra and
Speaker 1: has become a huge fan of athletic growing UM. David Chang,
Speaker 1: the famous chef, he just like a huge foodie and
Speaker 1: the big beer guy, and he got it right from
Speaker 1: the start. And then we've been super lucky to have
Speaker 1: Justin Tuck, the New York Giants defensive end, multiple Super
Speaker 1: Bowl winner. He he's been a super early investor and advocate.
Speaker 1: I met him last year actually at the Super Bowl.
Speaker 1: So I mean, these guys are fascinating in terms of
Speaker 1: where they end up investing their money. Yeah, and most chance,
Speaker 1: most times they've found us, which is like they are
Speaker 1: on it and super and like ready to support things
Speaker 1: they believe in. And along those lines, Blake Makowsky the
Speaker 1: founder of People Our First. He was one of our
Speaker 1: first investors and a long time board member and advisor UM.
Speaker 1: The common thread through that whole group really is that
Speaker 1: our tooth of the Trails and Impact program really spoke
Speaker 1: out to them, like the impact we're having. All those
Speaker 1: guys are hugely charitable and like from j J and
Speaker 1: his Hurricane Harvey relief to what David Chang has done
Speaker 1: for mental health. Blake Makowsky was Tom's UM lance with
Speaker 1: with Strong, It's like a hugely charitable group and that
Speaker 1: has been a big threat. So we're really excited to
Speaker 1: start doing some time and stuff publicly with them in
Speaker 1: their head. But first place I've talked about that, well,
Speaker 1: thank you so much for sharing that with us, because
Speaker 1: it really does. I love getting an idea of who's
Speaker 1: all behind it because it does give an idea of
Speaker 1: what they're thinking in terms of future trends. And Tim, yeah,
Speaker 1: just before we go, how much money in total? Have
Speaker 1: you guys raised a good amount? Are we talking tens
Speaker 1: of millions or you know? Well, yeah, publicly we have
Speaker 1: raised four million through last March UM, but we are
Speaker 1: definitely stacking bricks for a huge year ahead and have
Speaker 1: some exciting plans will be breaking around in the middle
Speaker 1: of this year. Probably we'll come back in UK with
Speaker 1: us we have We have just launched our first of
Speaker 1: five overseas countries too. We are shipping UM nationwide to
Speaker 1: Canada with free shipping now also um yeah, like Tim said,
Speaker 1: definitely come back bail and share with us. We love
Speaker 1: these kinds of stories, We love these kind of growth stories.
Speaker 1: And I do also feel like you guys are tapping
Speaker 1: into that wellness craze in a big way that has
Speaker 1: I think certainly gotten a gonna pants because of COVID,
Speaker 1: and we're all just focusing on both our mental wellness
Speaker 1: but definitely our physical health as well. So great stuff,
Speaker 1: good luck, happy New Year, and uh I know Tim
Speaker 1: and I will be reaching out to you again in
Speaker 1: the future. M