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Gen Z loves sobriety a lot that Athletic Brewing, America’s largest non-alcoholic beer model, simply doubled its valuation to $800 million

The largest non-alcoholic beer model within the U.S. simply acquired extra precious thanks partially to Gen Z’s efforts to make sobriety cool.

Athletic Brewing, cofounded by hedge fund dealer turned chief government Invoice Shufelt in 2018, almost doubled its valuation to about $800 million in simply two years following a $50 million fairness financing spherical led by development fairness agency Common Atlantic, the Wall Road Journal reported, citing folks conversant in the matter.

A spokesperson for Athletic stated the corporate couldn’t affirm or deny the brand new valuation.

The corporate will use the brand new financing to develop its staff and fund renovations at its third U.S. brewing facility situated within the San Diego space, Shufelt stated in an e mail to Fortune. The brand new facility will enable the corporate to double its brewing capability within the U.S. Shufelt stated.

The upstart firm has punched above its weight, beating out established names like Heineken and Budweiser to say the title of the highest non-alcoholic beer model by gross sales in U.S. grocery shops, in response to a Journal evaluation of NielsenIQ information. With 258,000 barrels offered final 12 months, Athletic ranked within the prime 20 breweries within the U.S. The corporate stated it topped $90 million in gross sales final 12 months.

Whereas the extra well-known beer manufacturers focus simply a part of their operations on non-alcoholic beer, Shufelt stated its single-minded deal with the class has allowed it to get a leg up on the competitors.

“Non-alcoholic beer was beforehand considered a really small market, however we see an infinite alternative so as to add each events and populations to the grownup beverage world by opening new days of the week for current customers and actively recruiting new customers to the class altogether,” Shufelt informed Fortune in an e mail.

Aside from Common Atlantic, Athletic’s different large identify backers embrace beverage firm Keurig Dr. Pepper, which invested greater than $50 million in 2022, in addition to celebrities comparable to former NFL participant J.J. Watt, Momofuku founder David Chang, and bike owner Lance Armstrong.

Athletic’s gross sales success, and traders’ confidence within the model, is thanks partially to Gen Z’s rising curiosity with a sober way of life and non-alcoholic drinks. On TikTok, #sober and #sobercurious have racked up tens of millions of posts with many influencers raving concerning the well being advantages of their transition to sobriety. Greater than 60% of younger folks born between 1997 and 2002, up from 40% final 12 months, stated they plan to reduce on their alcohol consumption this 12 months, in response to a January survey by promoting firm NCSolutions. Athletic’s chief government, Shufelt, stated that 75% of the corporate’s clients are below 45 years previous.

Whereas in years previous, the emphasis on sobriety might have peaked throughout “Dry January,” Shufelt stated summer time is definitely one of many firm’s busiest instances. The proliferation of non-alcoholic choices would have been unthinkable only a decade in the past, he informed the Journal.

“Ten years in the past, there have been no choices,” Shufelt stated. “We needed to completely change the product and the advertising.”

The rising sobriety, or “conscious consumption,” pattern has turned non-alcoholic beer into the fastest-growing phase of the beer market, at the same time as general beer gross sales have fallen with altering preferences. As extra younger folks reduce on their ingesting, they’ve turned to options, together with mocktails and non-alcoholic wine, but in addition non-alcoholic beer, a lot to the good thing about Athletic.

“We’ve made non-alcoholic beer a constructive selection and given customers a product they’re proud to carry of their fingers,” Shufelt stated.

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