Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 2: Steneveek on Bloomberg Radio.
Speaker 3: Big Joe, Okay, I don't need to tell you this,
Speaker 3: but if you've recently looked at the drinks menu in
Speaker 3: a bar restaurant, then you know that one of the
Speaker 3: fastest growing parts of the overall alcoholic drinks market is non.
Speaker 1: Alcoholic I know this is because of you.
Speaker 3: Yeah, I can't, still being quite honest, but BCG.
Speaker 2: Has the numbers. Are you ready for him?
Speaker 4: Yeah?
Speaker 3: Okay, seven percent. It's the expected compound annual growth rate
Speaker 3: of non alcoholic drinks globally through twenty twenty seven. That's
Speaker 3: when the drinks will comprise close to four percent of
Speaker 3: the overall market. Surprising to me that it's not higher,
Speaker 3: but it's a big market.
Speaker 5: It's surprising to you.
Speaker 3: Well, I thought it was growing to grow bigger. It's
Speaker 3: a huge market and it's still a tiny part of
Speaker 3: the market, but it's growing extremely quickly. Again, data from
Speaker 3: ida WS are cited by BCG.
Speaker 5: Now, the rise of non alcoholic beer is something we've
Speaker 5: spoken about quite a bit, with smaller players such as
Speaker 5: athletic brewing so small anymore, know exactly? And you are
Speaker 5: a fan fan big time. Yeah, and even the global behemoths,
Speaker 5: including Anheuser Busch in bab Listen, people are looking at
Speaker 5: what's going on in the marketplace.
Speaker 3: Okay, we've never actually had one a guest to talk
Speaker 3: about non alcoholic wines artill today. Rachel Martin is a winemaker.
Speaker 3: She's the founder of Oceano Wines. She joins us here
Speaker 3: in the Bloomberg Interactive Broker's studio.
Speaker 2: How are you?
Speaker 4: I'm great, Tim, Thank you.
Speaker 2: Thanks for joining us.
Speaker 3: Okay, So, I think the joke that everybody would say
Speaker 3: when you talk about non alcal wine is like, okay,
Speaker 3: is it just grape juice?
Speaker 4: It's definitely not just grape juice, because we ferment the
Speaker 4: grapes to wine and then we remove the alcohol.
Speaker 3: How do you do that removing the alcohol?
Speaker 4: It's a spinning cone column. It's a form of vacuum distillation.
Speaker 3: So why do you think that non alcoholic beer has
Speaker 3: seen this rise? But it's like much harder to find
Speaker 3: non alcohol wine. Is it harder to create a good
Speaker 3: non alcoholic wine than it is non alcoholic beer?
Speaker 4: I think it's more difficult because with wine you're starting
Speaker 4: out with a fresh ingredient grapes, and with beer they're
Speaker 4: dried ingredient. So I think from out the gate it's
Speaker 4: a more difficult process. And yeah, the non alcoholic wine
Speaker 4: market is growing, but the quality has been low to
Speaker 4: begin with, and you know now we're seeing more high quality.
Speaker 4: Oceano zero was the first ultra premium non alcoholic wine
Speaker 4: to hit the market.
Speaker 5: So talk to us a little bit about how you
Speaker 5: got here, right, because you've been in the industry for
Speaker 5: a long time doing I'm assuming alcoholic wine, yes, yes.
Speaker 4: And I still do alcoholic wine. I got into the
Speaker 4: industry my family owns a vineyard and winery, and I
Speaker 4: went to the University of Bordeaux School of Anology to
Speaker 4: prepare myself to run their business. And then I fell
Speaker 4: in love with a particular vineyard in San Luis Obispo,
Speaker 4: California called Spanish Springs, and I founded ocean All based
Speaker 4: an homage to that vineyard. And then getting into the
Speaker 4: non alcoholic space, I was looking to reduce my consumption
Speaker 4: of alcohol bit moderating not eliminating alcohol for my life,
Speaker 4: and I tasted other products in the market and I
Speaker 4: realized that fine wine was not being made non.
Speaker 1: Alcohol I love that you went there.
Speaker 5: I was just I think this week and I think
Speaker 5: I was reading through the New York Times app and
Speaker 5: reading a bunch of stories at all. Something something kept
Speaker 5: popping up, and it was a wine, but it was
Speaker 5: less alcohol and less sugars and organic. And I was
Speaker 5: kind of interested in thinking about kind of my own
Speaker 5: world and not that I'm Everybody thinks I'm a whino
Speaker 5: because I talk about it so much, but I'm really not.
Speaker 3: But it's not a promo and it's really hard to a.
Speaker 5: Work week to kind of so I'm beginning to think
Speaker 5: more about this or something that's not alcohol, you know,
Speaker 5: no alcohol, because I like the taste.
Speaker 4: Well, wine is an integral part of our lives and socializing,
Speaker 4: but alcohol maybe isn't the right choice for particular moments.
Speaker 4: And that's why non alcoholic wine is so great because
Speaker 4: you can have it at brunch, or you could you know,
Speaker 4: or you can moderate so you could have you know,
Speaker 4: traditional wines and then at the end of the night,
Speaker 4: you know, moved to non alcoholic.
Speaker 3: Are you trying to replicate the taste of a wine
Speaker 3: that has alcohol in it with these varieties.
Speaker 4: Well, the great thing is that I don't have to
Speaker 4: do that because I'm starting with a traditional wine. So
Speaker 4: in our non alcoholic wines, it's wine and that and
Speaker 4: a little bit of sugar to balance in the absence
Speaker 4: of alcohol, a little bit of tassium carbonate to lower
Speaker 4: the acidity, but everything else is natural to the wine.
Speaker 4: So you're you're smelling charnay and you're smelling peanut and.
Speaker 3: Wine, and you're actually allowed to call it wine, right, yes,
Speaker 3: because it is wine. Okay, Because I've noticed that some
Speaker 3: of the beers that I buy that don't have alcohol
Speaker 3: in them, they don't actually say beer on them. What
Speaker 3: they say they say brew. Oh interesting, And I don't
Speaker 3: know if there's some like type of law that they're
Speaker 3: not allowed to say beer.
Speaker 4: I don't know the answer to that question. But for
Speaker 4: non alcoholic wine, some brands they're adding back juice or
Speaker 4: water or adding flavors. But we don't have to do
Speaker 4: that because the quality of our wines are so high
Speaker 4: to begin with.
Speaker 1: So go back to how you make it so because
Speaker 1: we have we as.
Speaker 3: If you if you're driving on uh, if you're if
Speaker 3: you're if you're driving out to Pismo Beach, Okay. On
Speaker 3: Price Canyon Road. All you do is take a right
Speaker 3: turn and then you find yourself at the I know
Speaker 3: this really well. Yeah, I actually visited the vineyard unknowing, no,
Speaker 3: not even knowing that it was your vineyard.
Speaker 2: Gosh, probably back in December.
Speaker 4: Yes, Well, I fell in love with the vineyard, as
Speaker 4: I said, because of its proximity to the ocean, which
Speaker 4: you can actually taste in the wines. And we'll get
Speaker 4: into that. But it's such a unique place that I
Speaker 4: knew I can make wines that, you know, we had
Speaker 4: a sense of place, which is why wine lovers, you know,
Speaker 4: go to wines for that. You know, it's just it's
Speaker 4: more than beer, It's more than other you know, beverages.
Speaker 4: Wine is something that we know is the greatest beverage
Speaker 4: you know, ever made.
Speaker 5: Well, there's nuances to it, right and as you say,
Speaker 5: like I think about that too, like near the ocean,
Speaker 5: like you pick up those elements.
Speaker 1: So is it okay?
Speaker 5: So go back to the We do have a lot
Speaker 5: of folks on who own vineyards around around the world,
Speaker 5: and we love to get into kind of the nitty
Speaker 5: gritty and there's a lot more of an environmental component
Speaker 5: we've talked with organic wines, is it made exactly the
Speaker 5: same way it is?
Speaker 4: So our grapes are sustainably certified, so they're grown without
Speaker 4: herbicides or pesticides, and all the water is naturally available
Speaker 4: on the site. But we as far as like other
Speaker 4: vineyard owners, it's a great opportunity. You know, if you
Speaker 4: have excess grapes or your winery and you're looking to
Speaker 4: appeal to more customers, then non alcoholic wines is a
Speaker 4: great thing. There is a you know, reduction and consumption
Speaker 4: of alcohol in general and wines in general, So it
Speaker 4: could be a great opportunity for wineries to get into
Speaker 4: the non alcoholics.
Speaker 1: But so how does it become non no alcohol? Like,
Speaker 1: that's why I wud.
Speaker 3: Understand that you made when you explained it, you made
Speaker 3: it sound very easy, but like or something, Yeah, what's.
Speaker 1: The difference in the speak?
Speaker 5: Could like where does all of a sudden, like the
Speaker 5: alcohol gets sucked out or whatever.
Speaker 4: Okay, so you take the wine and you put it
Speaker 4: into a machine. It's called a spinning cone column. So
Speaker 4: that's a stainless steel column with a series of cones
Speaker 4: that spin. And what that does is it spreads the
Speaker 4: wine onto a into a thin layer, so making it
Speaker 4: easier to extract through vacuum distillation the alcohol. So first
Speaker 4: the aroma compounds sit on top of the alcohol. They're removed,
Speaker 4: the alcohol is removed, the aromas are added back into it.
Speaker 3: What do you then do with the alcohol that you remove?
Speaker 4: Yes?
Speaker 2: Can you make hand sanitizer? Like, what can you do
Speaker 2: with it?
Speaker 4: You can clean your tanks with it. You could also
Speaker 4: use it as an alcoholic beverage.
Speaker 2: Like a little moonshine or something something like that.
Speaker 4: You could, you know, I more interesting, honestly, Pour it
Speaker 4: on ice, put on put a little tonic, put a
Speaker 4: wedge of orange or something, and I think we have
Speaker 4: a new product.
Speaker 2: Okay, there you have it.
Speaker 5: Making non alcoholic red white is it as easy?
Speaker 1: Is one harder?
Speaker 4: People say that a great non alcoholic red wine is
Speaker 4: the holy grail, so it is more difficult to make
Speaker 4: better red non alcoholic wines. However, both of ours are
Speaker 4: really great. But but that's what consumers are looking for,
Speaker 4: is that really super high quality red non alcoholic wine.
Speaker 4: Because it's very hard to come by.
Speaker 2: And you think you've pulled it off.
Speaker 1: I do believe I've pulled out. And it's not only
Speaker 1: me that feels that way.
Speaker 4: We have a big waiting list for the next release
Speaker 4: of our Pino noir. So what we're be tasting today
Speaker 4: is our last vintage and it sold out super fast
Speaker 4: at the highest price.
Speaker 3: Non alcoholic wine in the market, and it is relatively expensive.
Speaker 3: I would say for a bottle of wine, forty fifty.
Speaker 4: Five for our Pino noir, forty five for our Shardenay. Now,
Speaker 4: when you remove the alcohol, you're seeing a thirty percent
Speaker 4: reduction of volumes.
Speaker 2: Okay, okay to make that.
Speaker 4: So your costs go up and then the cost of
Speaker 4: removing the alcohol.
Speaker 5: We're gonna continue this conversation. We're gonna sample actually these
Speaker 5: wines in just a moment.
Speaker 3: I want to get right back to Rachel Martin, winemaker
Speaker 3: and founder of Oceana Wine. She's here in our Bloomberg
Speaker 3: Interactive Broker studio. We've been talking about non alcoholic wines.
Speaker 1: We stop talking and try it.
Speaker 3: That's what they've been Well, I was gonna say, she
Speaker 3: doesn't just produce non alcoholic wines, even though that's what
Speaker 3: we're talking about. Right, what before we try the wine? Okay,
Speaker 3: Carol's like, really wants to try it, and I do too.
Speaker 3: Clock somewhere what portion of your sales now are the
Speaker 3: non alcoholic versus alcoholic?
Speaker 4: Well, we're growing the non alcoholic, but it's you know,
Speaker 4: it's more wines with alcohol than without. But that's just
Speaker 4: because we are, you know, the amount that we're producing.
Speaker 4: You know, we're selling out basically of the non alcoholic
Speaker 4: wine fast.
Speaker 3: Do you think, like, do you anticipate that you might
Speaker 3: give up on the alcoholic wine and just go non
Speaker 3: alcoholic behind.
Speaker 4: Well, I don't need to do that because we have
Speaker 4: customers for our traditional wines and that's how it all starts.
Speaker 4: Our Charnay one domestic wine of the year. Our Pino
Speaker 4: Noir is ninety three plus points. So we're making great
Speaker 4: wines with alcohol. But you know, we're looking to meet
Speaker 4: the consumer where they are because they want lower alcohol wines.
Speaker 4: Which is so exciting because I'm just announcing it that
Speaker 4: we're getting into the low alcohol wine. So we are
Speaker 4: launching our first low alcohol with the Serrah, and that
Speaker 4: will be available October first, and that's three point five
Speaker 4: percent as opposed.
Speaker 2: To what like a twelve percent that so are usually.
Speaker 4: When the Sarrah originally is thirteen percent, So we brought
Speaker 4: it down to three and a half percent because not
Speaker 4: some consumers aren't looking to eliminate, they're looking to moderate,
Speaker 4: and this is a great option for them tweak it down.
Speaker 2: Okay, Carol's like enough talking time for drinking.
Speaker 1: You're done? Yeah, okay, So tell us about what you brought.
Speaker 1: We've got a charay and a pino.
Speaker 4: Absolutely and our wines. All of our wines can be
Speaker 4: found on our website and more information about them at
Speaker 4: Oceanawines dot com. But this is our Shardenay. No, remember,
Speaker 4: this is our award winning.
Speaker 5: Smells like a Shardenay Domestic Wine of the Year Shardenay,
Speaker 5: just with the alcohol removed. So if you look at
Speaker 5: it's got a beautiful color, it looks you know, it's
Speaker 5: it is wine.
Speaker 4: It looks just like wine. It's crystal clear, it's you know,
Speaker 4: it's got this gold flex and then if you swirl
Speaker 4: it around in your glass, it's.
Speaker 3: How you This is a tough job, but somebody has
Speaker 3: to do it like we have.
Speaker 2: We have to drink wine.
Speaker 5: And you you have the notes of green apple, citrus, jasmine,
Speaker 5: a little bit of green melon and on the palate
Speaker 5: when you taste it. It has a good mouth feel,
Speaker 5: which is missing in a lot of non alcoholic wines.
Speaker 5: But the way that we make our wines, it has
Speaker 5: body and volume independent of the alcohol, and there's something
Speaker 5: that stays that wine that after feel.
Speaker 4: It has length, so the wine and flavors stay in
Speaker 4: your mouth after you've swallowed, and that is supported by
Speaker 4: the acidity and the wine go to the red.
Speaker 1: Because that I'm curious.
Speaker 4: Now, this is our Peano noir. This is our first
Speaker 4: ever vintage of non alcoholic wine. This is the twenty
Speaker 4: twenty two Ohano zero non alcoholic Pino noir from Spanish
Speaker 4: Springs Vineyard. So we you know, this again is our
Speaker 4: ninety three point you know, uh pino noir just simply
Speaker 4: with the alcohol remove right, So it's you know, it's
Speaker 4: got a gorgeous color, lots of aromas coming off of
Speaker 4: that plum, nice rosberry, a little bit of BlackBerry and
Speaker 4: kind of someone like this.
Speaker 1: I like this.
Speaker 5: So in terms of the market, you said you're sold
Speaker 5: out already, is that correct?
Speaker 1: For the non o For.
Speaker 5: The Pino noir, we're completely sold out. We have a
Speaker 5: lady waiting list for the next vintage. The Chardonnay is
Speaker 5: currently on the market. We just released it May first,
Speaker 5: and we're selling through quickly. What are you hearing from
Speaker 5: like restaurants and bars and like, I'm a mean, that's
Speaker 5: the holy grail at this.
Speaker 1: Point, definitely.
Speaker 4: And I've been in conversations with masters of wine about
Speaker 4: our non alcoholic wines and what's exciting is they already
Speaker 4: know about Oceano zero and because the market is booming,
Speaker 4: restaurants are looking for not just any non alcoholic wine,
Speaker 4: but these quality non alcoholic wines fine for fine dining.
Speaker 3: You see that on menus now it's wild. There's an
Speaker 3: entirely new section right that you hadn't you wouldn't see
Speaker 3: a year ago. I'm wondering about distribution because you keep
Speaker 3: talking about that it's for sale online. Are you sold
Speaker 3: at brick and mortar at all?
Speaker 4: We are sold at brick and mortar, for example, in
Speaker 4: New York City Spirited Away, which is in Soho, you
Speaker 4: could find our wines there. But we have distributors, so
Speaker 4: we're distributed in the mid Atlantic, Northeast, in Missouri as
Speaker 4: well as California for both our traditional and our non
Speaker 4: alcoholic wines. But to keep up with the market could
Speaker 4: demand not only for our wines, but the growth of
Speaker 4: the category. We're looking for investors, yes, so that we
Speaker 4: can meet the demand. Interesting continue, Yes.
Speaker 5: What do you think is going to be the real
Speaker 5: big growth area? Is it the alcohol removed or alcohol
Speaker 5: alcohol lowered?
Speaker 1: Kind of?
Speaker 4: I believe it's low alcohol because that's what most of
Speaker 4: the market is looking for, and that's to reduce their
Speaker 4: consumption and not completely eliminated. But non alcoholic wine is
Speaker 4: great for whatever your reasons that you choose not to
Speaker 4: drink alcohol, but you could have traditional wine and then
Speaker 4: switch to non alcoholic wine. In the UK, I think
Speaker 4: it's really cute. They call it zebra striping.
Speaker 1: Yeah, yeah, those Brits, those Brits.
Speaker 4: But there's enormous you know, opportunity and both know what
Speaker 4: they call no and low alcohol wine and low.
Speaker 3: Yeah, we're Bloomberg. We love numbers. We talk about money
Speaker 3: all the time. How much do you need to raise? Like,
Speaker 3: what's target here?
Speaker 4: One point five is my target? Yes, and that's for
Speaker 4: you know, building out the program of wines and then
Speaker 4: also having a more robust direct consumer experience, getting you know,
Speaker 4: our own tasting room. We don't have one of those
Speaker 4: at this time, and then expanding beyond our borders.
Speaker 3: You know who loves wine, Silicon value billionaires. It's amazing anyway,
Speaker 3: and now that they.
Speaker 5: Could get into non alcoholic wine or low alcohol with Oceano. Listen,
Speaker 5: it's very fascinating to see how the beverage market, the
Speaker 5: alcohol no or low alcohol like, how it continues to evolve.
Speaker 5: It's really fascinating, Richard, Thank you so much. Yes, I
Speaker 5: was going to say, and you can follow us on
Speaker 5: our socials to see what we have.
Speaker 1: We've got lots.
Speaker 4: Going on this summer Oceano dot zero and Oceano Wines
Speaker 4: on Instagram.
Speaker 5: All right, well, looking forward to come back again and
Speaker 5: we'll hear how things are going. Rachel Martin, she's wine
Speaker 5: maker and founder of Oceano Wines, joining us here in
Speaker 5: our studio.
Speaker 1: Thank you so much.
Speaker 4: Thank you for having me a lot of fun.
Speaker 1: And it's not even a Friday. How did this happen?
Speaker 2: And he excuse to talk about California.
Speaker 1: That what Tim has been in his glory.
Speaker 5: It's like going back home kind of almost all right,
Speaker 5: this is Bloomberg