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The biggest non-alcoholic beer brand in the U.S. just got more valuable thanks in part to Gen Z\u2019s efforts to make sobriety cool.<\/p>\n
Athletic Brewing<\/a>, cofounded by hedge fund trader turned chief executive Bill Shufelt in 2018, nearly doubled its valuation to about $800 million in just two years following a $50 million equity financing round led by growth equity firm General Atlantic, the Wall Street Journal<\/em> reported<\/a>, citing people familiar with the matter.<\/p>\n A spokesperson for Athletic said the company could not confirm or deny the new valuation.<\/p>\n The company will use the new financing to grow its team and fund renovations at its third U.S. brewing facility located in the San Diego area, Shufelt said in an email to Fortune<\/em>. The new facility will allow the company to double its brewing capacity in the U.S. Shufelt said.<\/p>\n The upstart company has punched above its weight, beating out established names like Heineken<\/a> and Budweiser to claim the title of the top non-alcoholic beer brand by sales in U.S. grocery stores, according to a Journal<\/em> analysis of NielsenIQ data. With 258,000 barrels sold last year, Athletic ranked in the top 20 breweries in the U.S. The company said it topped $90 million in sales last year. <\/p>\n While the more well known beer brands focus just part of their operations on non-alcoholic beer, Shufelt said its single-minded focus on the category has allowed it to get a leg up on the competition.<\/p>\n \u201cNon-alcoholic beer was previously thought of as a very small market, but we see an enormous opportunity to add both occasions and populations to the adult beverage world by opening new days of the week for existing consumers and actively recruiting new consumers to the category altogether,\u201d Shufelt told Fortune<\/em> in an email.<\/p>\n Apart from General Atlantic, Athletic\u2019s other big name backers include beverage company Keurig Dr. Pepper, which invested more than $50 million in 2022, as well as celebrities such as former NFL player J.J. Watt, Momofuku founder David Chang, and cyclist Lance Armstrong.<\/p>\n Athletic\u2019s sales success, and investors\u2019 confidence in the brand, is thanks in part to Gen Z\u2019s growing curiosity with a sober lifestyle<\/a> and non-alcoholic drinks. On TikTok, #sober<\/a> and #sobercurious have racked up millions of posts with many influencers raving about the health benefits of their transition to sobriety. More than 60% of young people born between 1997 and 2002, up from 40% last year, said they plan to cut back on their alcohol consumption this year<\/a>, according to a January survey by advertising company NCSolutions. Athletic\u2019s chief executive, Shufelt, said that 75% of the company\u2019s customers are under 45 years old.<\/p>\n While in years past, the emphasis on sobriety may have peaked during \u201cDry January,\u201d<\/a> Shufelt said summer is actually one of the company\u2019s busiest times. The proliferation of non-alcoholic options would have been unthinkable just a decade ago, he told the Journal.<\/em><\/p>\n \u201cTen years ago, there were no options,\u201d Shufelt said. \u201cWe had to totally change the product and the marketing.\u201d<\/p>\n The growing sobriety, or \u201cmindful consumption,\u201d trend has turned non-alcoholic beer into the fastest-growing segment of the beer market, even as overall beer sales have fallen with changing preferences. As more young people cut back on their drinking, they have turned to alternatives, including mocktails<\/a> and non-alcoholic wine, but also non-alcoholic beer, much to the benefit of Athletic.<\/p>\n \u201cWe\u2019ve made non-alcoholic beer a positive choice and given consumers a product they are proud to hold in their hands,\u201d Shufelt said.<\/p>\n<\/div>\nSubscribe to the Fortune Next to Lead newsletter to get weekly strategies on how to make it to the corner office. Sign up for free<\/a>.<\/div>\n