HERE’S TO NO HANGOVERS
Calgary brewers aiming to cash in on non-alcoholic beverages have tapped into a growing health and sociological trend, writes Amanda Stephenson.
Craft beers tap into no-alcohol trend
When Graham Matheos first started toying with the idea of starting a non-alcoholic craft beer business, he had no idea whether anyone other than himself would want to drink his product.
“I told my wife, ‘I’m just going to do this for myself. If worst comes to worst, I’ll just have a garage full of beer and that’s OK; I’ll drink it.’” Matheos said.
But Matheos — a Calgary physiotherapist who, along with his friend and business partner Kevin Young, launched One For the Road Brewing Co a year ago — did not end up having to drink a garage full of beer on his own. Twelve months later, the Calgary-based company’s products are available in 120 retail stores, bars and restaurants, and One For the Road has become one of Western Canada’s largest dedicated non-alcoholic brewing companies.
“We’ve never had a sales team out there; it’s just been myself, so it’s been very organic as far as that growth goes,” Matheos said. “Our goals for the business (are) keep growing and growing. Honestly, at this point I’d say the sky is the limit.”
For Matheos, the inspiration behind the One For the Road concept was highly personal. After cutting out alcohol on a trial basis 14 years ago to support a friend who was trying to quit drinking, Matheos discovered he liked having hangover-free weekends and the extra energy that gave him for sports and his children.
He has been alcohol-free ever since, but he also understands the allure of indulging in a crisp, cold pint while out with friends.
“I play hockey and I play rugby and beer is part of the culture. There were certain aspects of it I really missed,” he said. “And then this whole craft beer boom came along and all the interesting flavours ... were out there and I just felt like I was missing out on it.”
Non-alcoholic beer (defined as 0.5 per cent or less alcohol by volume) has been around for decades. Think Anheuser-busch’s O’douls or Labatt Breweries Beck’s Blue. But in recent years, those who choose to avoid alcohol have increasingly been clamouring for more options — options with the same sort of full and complex flavours that craft beer drinkers have come to expect.
And brewers are responding, in part because they recognize a growing market segment when they see it. While non-alcoholic beer is still a tiny part of the overall U.S. beer market (two per cent, according to Bloomberg), it is forecast to grow by a third this year alone. Those gains would come as volume in the overall beer category is expected to fall 3.7 per cent, a fifth straight annual drop.
Driving this growth is the Millennial and Gen Z demographics, who appear to be more health-conscious than their elders and have popularized terms like “sober curious” and “Dry January.” According to market research firm Nielsen, 66 per cent of millennials say they’re making efforts to reduce their alcohol consumption — well above the average 47 per cent among all U.S. consumers 21 and older.
While Canadian statistics are hard to come by, in the U.S. no- and low-alcohol beer is the fifth-fastest growing beer type with a total value of $77 million, according to Nielsen. And at the retail level, non-alcoholic beverages are worth $7 billion more than just four years ago. In the last year alone, retail sales of non-alcoholic beverages have posted sales growth of $1.1 billion.
At Calgary’s Village Brewery, the trend has been witnessed firsthand.
“What we’ve seen that’s really interesting is that there’s actually a lot of younger people who are just not interested in drinking as much,” said marketing co-ordinator Jackson Stuart. “Maybe they’ll have one beer, and then one non-alcoholic beer. Or on a Friday have real beers and on Saturday have non-alcoholic. It’s been a little bit surprising. We read a bit about that being a trend coming up, but to actually see it going on in Calgary is pretty cool.”
To meet growing demand, Village introduced its first non-alcoholic beer — a pale ale — over a year ago, and rolled out a non-alcoholic stout in January. Both products have been received very well, Stuart said.
“A lot of the non-alcoholic beers that were available were very much not craft — they were just pale, light, bubbly — there wasn’t much to them,” he said. “So that was one of the main things we wanted to do — put some flavour behind it and make it special craft beer. Once we kind of nailed that in, people were pretty excited to actually try it.”
The non-alcoholic trend extends to non-beer options, too. In March of this year, Calgary entrepreneur Jo-anne Reynolds launched Sexy AF, a line of handcrafted mock spirits in four flavours that can be mixed with anything to create the alcohol-free cocktail of your choice.
Reynolds, a fitness enthusiast, said she came up with the idea after going on vacation with some girlfriends who avoid alcohol for health and religious reasons.
“We would go out for dinner or cocktails, and they just had absolutely no choice. They didn’t want a sugary Shirley Temple, so they just ended up not ordering anything,” Reynolds said. “It gave me the idea to create a bold, fun, sexy brand of alcohol-free spirits so that my girlfriends can feel socially included.”
Reynolds said she thought of the concept without fully realizing she was on the cusp of a major trend. Fortune magazine, for example, has dubbed 2020 the “year of the mocktail.” And while there are many companies jockeying to grab a corner of this growing market, Reynolds is convinced there is more than enough room for all.
“I’ve been watching the U.K. market, and it’s about five years ahead of us,” she said. “So, definitely the U.S. and Canadian markets are up and coming, and there’s loads of opportunity for lots of players in the game. People want choice.”