Athletic Brewing's Bill Shufelt: From hedge fund to $100M+ non-alcoholic beer brand with no co-packers

I just sell things that hurt when you drop them on your feet over here, but I'm [laughter] a huge huge fan of the show and so excited to be here.

Yeah. So, so great to have you. I was just trying to remember uh I listened

to like about 90 minutes of you on a podcast. It must have been like four or five years.

I listened to you on Logan Bartlett. That was a fun one. You got a number of great

Yeah. Yeah. Yeah, he's awesome.

Um, what do you think about the pitch of getting Are you familiar with the Cheeky Pint podcast from Stripe? Have you seen this?

I I love it. Yeah, I was actually thinking about cold emailing them to get

So, the elephant the elephant in their pub is [laughter] that they're not really crushing beers.

They're not getting actually drunk.

So, I think you should make a special edition uh for the team over there so they could really start

start indulging.

Well, I I love that. I'm a fan of them. Ireland. I've got a bunch of their books. So, yeah. Would love to reach out to them.

Fantastic. Um,

let's take it back to the beginning. Uh, since it's your first time on the show, uh, give me the founding story. Give me what you were doing before. Uh, it's such a huge trend now, mostly thanks to you. Uh, did you imagine that the trend would become so big? What was what were the inciting elements? Yeah, I think it there's like both like the personal story and the category story and like the health and wellness mega trend behind it. Um, you know, even zooming out to the trend. I know um you know so much of like the mega trends in business these days and big numbers around AI and it's rare rare to see something that is like so solidified,

very visible long-term and I can get more into like how big I think the trend will be and why it'll be so big over time and why I have good line of sight to that. My personal story really is I I was working um in the hedge fund world. Had a great finance job. I I came I went I went

it's

I went to like it

went to college exactly [laughter] um went but I like went to college with that view. Went right into it my career. Never thought I'd do anything different and but

I was living this high performance lifestyle where you know 12 years ago I was about to get married. I was thinking about my future life and alcohol was kind of a ceiling on my my work productivity, my relationships, um my sleep, my workouts, you know, all the things that are like so common place in knowledge now that like you know all the fitness wearables, the podcasts like Peter Tia, Huberman, Rhonda, like all these things are like so evident now. But I was like living that and feeling it myself. I was, you know, I had an a very intellectually intense job at Steve Cohen's hedge fund where you're graded on your output every day. I was at the desk from 6:00 a.m. to 6:00 p.m. 150 work dinners a year, then out with friends and family on weekends.

And [laughter] 150 work dinners is insane. One for for us, I mean, we we have like a maybe not as intense as your schedule with Steve Cohen, but it's very, you know, we're here. We have to get to the studio at 9:00. We go live at 11:00. There's very little downtime. And so we do one work dinner and it throws everything off. [laughter] It's like throws off the whole week.

Yeah.

I have huge admiration for your always on like I think about that all the time.

But yeah, we had I had 200 brokers and I had to do research dinners also and you have to have good relationships. So

when you like pick up the phone and need to convey something in 10 seconds that you know that person. Yeah. Um, so anyway, that's a long way of saying like I was very interested in health, longevity, my fitness, my performance way before it became such a commonplace trend and I was living that and I really started saying to people like I I really wish I could go out to all these dinners and be in the moment without alcohol and you know um I saw the trend happening over my finance career where people were just as excited to go to Barry's boot camp or something in the morning rather than go to a steak dinner at night. And so, but I just really wish there was another

boy four berry boot [laughter] camps in a day.

So, so why not Shirley Temples? Why didn't you just become the Shirley Temple King drinking six of those? Like like what what what were you doing before you actually decided to build a new product in the category? Uh were you on just like soda water and lime? What was the what were the options? Well, so I saw that huge impact on my life just by like moderating my drinking and ultimately stopping my drinking and then thought, you know, if I could just bring moderation to the masses and just make it accessible like I have no view on like bringing back prohibition, sobriety or anything like that,

but just making the other side of the menu delicious, like match the culinary expectation and the experience that and as I started to look into the numbers behind it, 50% of adults even at that point had 0.1 drinks. or less per week. And it was really only like the top 10% of adults have more than like seven drinks a week. And it kind of hit me that the adult beverage world is also just totally missing a majority of the population and their needs. And so I'll skip like the years of business research and surveys and stuff like that to get conviction around it, but ultimately it was like right out of my lived experience and I wanted it to exist and quit my job to build that. Um,

how much how much credit uh do you give just how good the product is with the success of the company? Because I think in CPG, uh, you're not the first finance Chad to like wake up one [laughter] day and say, I want to start it. Like it's it's kind of it's kind of a common path like,

you know, they're kind of like bored. They're, you know, they they they try some drink. Like I I've met as an angel, I've met so many people over the years that like are trying to make the leap from finance to being an entrepreneur and CBG because it's like you're going from like spreadsheets to something that's like super tangible and you still have to use you spend plenty of time in spreadsheets and I think there's something really appealing about like going from like finance to like the tangibility of CBG. But the issue is like so many people that are incredibly talented uh they just end up like uh they end up develing developing a product that's not amazing and then it just you can't even live up to your talent level or your potential because you're just like handicapped by the product. And when I try you know having this product even when I had it for the first time it's like it's just a fantastic product. It tastes exactly like a beer. It tastes like a sort of a c, you know, celebratory moment or it tastes like, you know, winding down at the end of the day, which is like it delivers something unique in the way that like a LCROY or just some other like non-alc, you know, alternative actually works.

Yeah, that is exactly it. And we have an incredible co-founder, John Walker, and the two of us home brewed on Gatorade jugs and we took it down to the screws and reinvented the way non-alcoholic beer is made rather than where historically non-alcoholic beer was a very industrialized, heavily processed thing. It was only a logger category as well. And so we took the time and John said he wouldn't even sign on if if I if I didn't agree that we wouldn't launch the beer if it wasn't indistinguishable from top craft beers from day one. And I think that's the huge differentiation. We made the very unattractive decision to investors to take a capital inensive route. We've built all our own breweries. We've put over 130 million into our manufacturing just [laughter] very unattractive to investors if I can repeat that.

Attractive now.

Yeah. And it but it was so we could own our proprietary process, own the quality of what we were doing every step of the way where Yeah. As you were saying, if you were to like nick surely a lot of CPG or especially the competitors in our category, like you would find that they just totally outsource all the production. There aren't brewers on the team and it truly had to be different quality and different experience. And we really invested to change that perception of the category and that's still very rare in non-alcoholic beer. There have been 280 brands since we launched and a lot have had very disparate features.

Well, yeah. and what's happening with the category right now broadly because I you know again as an angel in LA there's so many CPG founders I've seen so many of these companies uh try to come up not just in kind of the non-al beer beer category but in other categories and one of the things I always uh struggle with as somebody who you know dramatically reduced my drinking probably like six years ago from like drinking like a handful of drinks once a week to like drinking like one or two drinks like once a month really like so really limited it. And so I'd get these pitches and people would be pitching like something that doesn't taste like alcohol at all.

And I'm like I I I'm the buyer here, but you're selling me a product that I can I can drink a Diet Coke. I can drink any number of other things. And so like your competition is just is not like the non-alc category. For some of these new non-alc brands, their competition is just like every single drink that doesn't have alcohol in it. And that just felt like a super tough position. Whereas for this, it's like if you want a beer but you don't want alcohol, like your options are like much more limited.

Yeah, for sure. And as as I looked at the TAM of the market, the way I thought about it was a 50% of the people really aren't drinking and 99% of people or even people who do drink are not drinking. like 99% of the time they're awake. So there's a huge opportunity to meet new occasions and those occasions you just described losing over the years. We're trying to bring those back, bring the social connection back, get people out multiple times a week. But I think the like the clearest way I think I could say this is and like why I think it's such a big trend is, you know, the overall beer category per the brewers association is north of hundred billion dollars in all retail sales. Um cra craft beer itself is 28 billion supposedly per the uh crapers association. Um if you go back like 50 years, light beer was one of the biggest mega trends to ever hit beer and that is an enormous part of the um beer category today. And but that was a huge trend up until about the turn of the millennia. And then we started to see like people well the light beer trend was driven by like the nutritionals where people wanted superior nutritionals to what existed previously. Then you had big trends in craft beer and flavored RTDs which were you know light beer might not have that flavor. We want to like have the nutritionals but the flavor. And where non-alcoholic beer comes in is all the experience superior nutritionals. It's about 20 30% of the calories plus all the flavor of great craft beer. and it's emerging in this new big mega trend that I think has really good line of sight to be the next huge thing in beer. And I I'm a very delusionally optimistic person, but I do think non-alcoholic beer will be significantly bigger than craft beer and a huge part of the overall beer category in the future. Um

yeah, where where else in uh beer is there like meaningful growth? Well, that's also the problem too is every other like most CPG overall, but especially Bevalk, all the innovation is like a one for one substitute for the same consumer in the same occasion.

And and even some of them are like you're substituting one thing for many. Like a THC drink is a one one for like six substitute like

um and so what we're doing is we're bringing in like a lot of people drink our beers within the same night as alcohol. our cons 80% of our consumers drink. So, we're bringing a lot of people back into the category. Plus, 25% of our drinkers are new to beer altogether. So, like this is really additive to the beer world for the first time. Um, yeah, and then yeah, as you think about those occasions, there's just a lot of occasions to layer in. I guess [clears throat] on the broader beer category, too, be the last few years have been the worst beer years of our generation in alcohol for a number of reasons. I think part of it is um the category is not connecting to the next wave of consumers. If you look across the spokespeople in the major brand TV ads, most of them in their 70s, one of them's in their 80s,

one brand's about to bring back an 87y old spokesperson uh from 10 years ago. So like

this is a cohort. This like this is not the cohort we need to meet. Like it is like we are bringing beer for the modern, healthy, active adult. We have great aspirational athletes and chefs and people behind it, but more than anything, we're just trying to build like a really timeless brand. And I I could share more about our marketing and how we're thinking about that differently, too. I I want to get to that, but first I want to know about um what uh how is your business different or similar to other beer companies that are higher alcohol? Do you need to be 21 to buy this? Are you subject to the three tiered system? Can you sell this online? What's different or similar to just uh higher alcohol beer distribution in sales?

Yeah, I'm I mean as a finance Chad coming into this category, [laughter] I was like, "Wow, there is there is no tech in this sector and there is margin everywhere." Yeah. And like I very quickly got on the ground and realized that there's

a lot of reasons why like beer distributors are great at what they do. It's an incredibly capital intensive. They're basically a big logistics business. And so we do largely plug into the three tier system, but that's our optin. And then

legally you don't have to necessarily regulated slightly differently.

Correct. And then we were the first beer brand to launch nationally on DTOC also. And so that was like an absolutely enormous marketing advantage where, you know, any high-flying brewery of the 2010s, you'd have to wait in line outside of their brewery for a limited release in the local where, you know, we could we could lose tons of money. shipping beer all across the country. So,

and then is there any age restriction?

Not in most states. No. But yeah, typically it's, you know, we we're trying to establish it for adults in typical beer occasions celebrating life special moments. Yeah.

I'm mostly trying to catch Tyler because uh I saw him grab one and if if there's some rule that he's violating, I'm going to call the cops right now. [laughter] I see him over there. I I mean we are huge on the Michigan campus and you know we like some of I mean some of the like just like colleges across the country were enormous. This next generation is so much more moderate than prior generations and

I I think the perception of alcohol has changed something like 14 percentage points in 3 years which

you know it's it's happening really fast. talk about the the the the formulation process a little bit. Not to go too far back, but uh a lot of folks when they're doing a CPG project, they go to a c-acker and they get a dog and pony show and they come out and they're like, "We formulated the perfect thing for you." Or flavor house or some supplier and they tell you, "This is the best thing possible." And then if you don't if you're not sharp, uh sort of the dog and pony show can kind of overpower you. Was there any uh any point where you were working with a manufacturer and you had to sort of override them or what was the the initial uh scale up like?

It it's really been all internal since day one. Um

yeah, I I basically put my life savings into our first 10,000 foot warehouse, Gatorade jugsing,

me and John's salaries a bit and then raised raised an angel round to build that first brewery. um did 120 meetings, huge rejection percentage.

Um

but yeah, in that we wanted to approach it in a totally different way. Um and so we're confident we arrive at where we have

I I I feel like uh consumer is the one category where you just really don't know until you start selling the product. Like I can easily imagine getting this pitch and just being in the mindset of like like if I'm h if I want to drink a beer, I want to I want I want alcohol.

And it just turns out it's like totally just totally false, right? Um, I wanted to ask I know you did a ton of like community IRL marketing early on and I wanted to ask you about how you advise other consumer brands when they're early on and thinking about how to spend their time, what channels to really focus on because for certain consumer categories, if somebody's like, "Yeah, we're going to really focus on events and community." I'm just looking at them being like, "You should just sell the product." Like, just sell the product. Like, spend all your time selling the product. Whereas you guys like I know invested a lot in the in in kind of the the running uh running uh world and and saw a ton of great results.

Yeah. I mean by invested a lot like a lot of my time in weekends and life

like every every weekend.

Yeah. We had no more resources after all the stainless steel to put into marketing. So that was like all on us. But um yeah, just touching quickly on two things you said there where like a lot of people both a don't contemplate non-alcoholic beer. They're almost like non-considerers and then think they don't like the taste of beer are two things we like combat like over and over again cuz like it it really is hard to imagine non-alcoholic beer and the social experience until you actually experience the social experience without alcohol and you're like, "Oh, like I kind of really like this. I'm actually in it for my friends, the food, the moment, and not the alcohol that mostly hits you after the moment. That was like a big light bulb to me. And the thing we hear all the time is people say, "Oh, I don't like the taste of beer." Well, actually, the ingredient a lot of people don't like in beer is the ethanol, which at times is up to like 80 85% of the calories of beer. Like in a normal light beer, the ethanol calories is more than 80 of the calories of like the 95 to 100 calories. And so

we actually do have a pretty big flavor advantage too and like no comparison large brand. Um yeah on the uh the in real life too that was almost out of necessity like I was like going around our early grocery stores like Whole Foods and nobody was even looking at the non-alcoholic beer shelf. And so I was like okay I got to get out in the world and bring people in. And so I like I was running a lot of races and like trail half marathons and Spartan races anyway. And so I just started pouring beer at those, giving out hundreds of beers a weekend and getting people to like to the actual like table and trying the beer where they're like happy, sweaty, thirsty, and actually considering it. So

how do you Yeah. How do you measure success with an initiative like that? You're pouring, you're you're sampling with people, you're seeing their reaction. Are you trying to like are you already at that time stocked in shelves in local stores and then you're trying to like see hey if I if I do like a bunch of weekends back to back am I going to see an uptick in sell through or is it more just like this is like I'm basically spending my time to get more people aware of the brand and I have more time than I have capital

it yeah we have down to zip code and store level sales and so I was able to see like ripples fairly quickly and could run regressions on that. Um,

separately, like it it has to be authentic to the brand proposition. Like everything about this brand, like the can, the mountains, the outdoor aesthetic, the taste was like all out of me and John's life and like primarily my life. And so where I was going to market the brand and talk to people were like I didn't have to like go to a focus group or Google where people like me hang out cuz it was all built around me. And so I I have seen a lot of people like try to bring non-alcoholic spirits to like races and it's just like it's like an absolutely laughably terrible fit. But you can tell some DC is just pushing someone up to Yeah.

Well, yeah. They heard you on a podcast and [laughter] they're like, "Yeah, let's just run. We'll do the same thing. It all have the same

blood brewing for Manhattan and

gent.

We did also take a very intentionally like long track with things too where so like that like yeah talking to someone face to face is very unscalable and like doing things digitally is so much more scalable and awareness.

But like if you do it enough and if you're doing it all the time all of a sudden it is scalable on a long time horizon. And even up until this year, last year we probably did 2500 events as a company and handed out well over a million samples probably in all 50 states and three other countries. And so those things do scale over time. And then we've been really consistent with our marketing messages, too. You know, I I knew my core skill set isn't like me being a social media persona and like just turning on the cameras all the time. We wanted to create a timeless brand that just compounds over time. We talk about the same things like over and over again. I I think of it somewhat as like a Red Bull model of advertising consistency where most of CPG these days is like chasing that next hit. It's like you've got to be on the next trend. You've got to be like the next video's got to be a home run.

Yeah.

Or even shorter duration like celebrity trends. You know, we've had upwards of 10 celebrities enter our category. We have a whole range of superheroes at this point. Um And and

it's so funny because you you probably know all of them, but you could list them all off and I've never heard of any of them. And that's that tells you everything about the level of focus and actually

it's probably harder to watch their movies now. [laughter]

I feel personally slighted. I can't do it.

Yeah. Well, we've got one more at least one more superhero coming into the category this year. This one's

being launched at us from a French castle. Um, you know, it's going to be draped in Americana imagery, so we're excited for that one. Um,

but there's all different texts. There's like the short-term celebrity spike and like hope you can ride it, where we've kind of just done the thing and been authentic like who we are inside the walls is who we are outside the walls

over and over again. I think that really compounds over time and matches with our like manufacturing strategy, our continuous investments in quality. every one of our teammates is full-time teammates and

like all all this capital investment is it looks really good right now but in 2018 this was super out of vogue for sure.

Yeah.

Yeah.

Well, yeah. The the beautiful thing with CBG it is it is incredibly competitive. You are going to deal if you're successful at all you'll deal with a million knockoffs and new entrance. But you can look backwards and say like uh or even just look at your business today and and realize like even with everything you know now imagine trying to compete with yourself from zero. It would be an absolute nightmare you know.

Um so it's just the the benefits of great product operational excellence and then compounding.

Uh talk more about the decline in alcohol assump consumption amongst young people. Uh what are you seeing in the data? How real is the trend and what are the key drivers of what's going on?

Yeah. And how much basically how much does the alcohol industry hate Andrew Huberman? [laughter] He basically he basically needs to be in witness protection.

Yeah. The the new dietary guidelines were basically like don't not drink alcohol. It was like it it was like as close to don't drink alcohol as it gets and the industry was like

yeah. [laughter] But um at the end of the day like I I think a lot of this is potentially skewed by co and you know generations that were maybe like I mean if you go back to the start of our careers it was so easy like I lived above a bar in the West Village in New York and like I had friends in that bar every afternoon. It was so easy to find where people were after work. And I I feel for this generation that like is kind of losing the work happy hours, the mentorship and stuff. And I I don't think we're going to have generations that don't love social connection and blowing off steam and having fun. I think the industry and the world has to meet people where they're at. And so I do think they'll normalize, but I also don't think, you know, in a world of cell phones and videos always on and like high work performance expectations, it it's going to be really tough to get back those like volume drinkers as well. So, um I I think you've got to layer in more occasions throughout the week. You've got to find ways to keep people at bars longer with moderate beverages. Um so I the industry on the alcohol side will have continued volume challenges. And then there's like new non-alcoholic functional drinks too, of which THC is the most obvious. And those are not like high volume drinks either. So

yeah, they're low volume and they destroy your sleep.

So

yeah, not a fan. Talk to me about label claims. Uh the only real label claim that I see on here is non-alcoholic brew. Um it doesn't say it has creatine in it or protein or caffeine or anything else. beer

protein. But I mean, you've been Have you guys ever Have you ever made like a internally of the protein beer?

The high protein beer 50 g. Why not? [laughter]

We've had some fun with like caffeine and protein and like funny videos and stuff. Um

I I do think there could be a world of functional beers in the future, but I I also think like beer and function is like just kind of different things for the most part. And so,

um, but that being said, like one of the hardest things of starting a CPG business is like the plaintiff's bar and all the like how tight the FTC rules are from website to label claims to everything. And there are thousand eyes waiting people for people to misstep even the smallest trip wires. And

yeah, that was why earlier last year there was somebody there was a a viral brand doing like nicotine drinks

drinks. Yeah. And that that uh

but at the same time I mean I

that just look like it was like okay you you're just you're just making stuff and selling it. This

Jordan you don't think an athletic for loco could work [laughter] an athletic loco athletic loco has a nice ring to it.

Yeah. That one got immediately.

What's the what's the scale of the the business today?

Um steadily compounding. Um, I guess we we've moved into like the top five of overall craft breweries out of 10,000 craft brewers, top 20 beer producers overall.

Um,

yeah, we passed um 100 million in revenue in 2024 and have been growing very healthy double digits since then. Last year was the worst beer year of our lifetime probably and we had really strong growth into that and you know we're just coming back with more exciting partnerships, more marketing spend next year as the business grows and kind of steadily just chugging along and you know a comparable I think could be the energy drink category which Red Bull really put on the map in the '90s. Monster arrived in like 2002 and those brands didn't have a lot of 100% years. It was just a like 5 to 15% compounder for 25 years.

And that's really what we're looking

uh for also is just to like make really high quality beer, timeless marketing, and just ride that health and wellness wave.

Yeah, that's always the I feel like founders can get a bit carried away of like, I'm making an energy drink. Look how big Monster is. It's like or look how big Red Bull is. It's like you don't they didn't just like be like, "Oh yeah, we just executed well for six years and suddenly we're a $50 billion company." It's like no decades and decades and decades. Uh and I think uh I I I uh I get excited about CPG founders that are like,

you know, uh I think of like Peter uh with David where he he doesn't want to sell out to the last gen. He wants to just compound enough, launch new products, launch new brands to get to the point where he is the

the the 800 pound gorilla in the industry. And so,

um, I'm sure you've had a bunch of opportunities, uh, to sell and and turn them down to date. Um, so I'm I'm a fan of, uh, the compounding.

Well, well, you guys know better than ever, too. Like, the rules of private capital have totally changed since we launched the business. And we have like an amazing cap table through all that rejection I went through. and just people who are super excited about what we're doing with a really long time horizon. And you know there's the whole public versus private debate and like do we want to go public and spend 80% of our time on the regulatory of that versus how great it is for awareness and then the public can also invest in the business who are like super fans in it. So there's a lot of push pull on public versus private too that we're working out. Are you getting uh uh any push back from other alcoholic beer producers? Uh we saw this with the milk lobby pushing back against like uh the alternative milks and saying, "Hey, you can't use the word milk. Are there words you can't use?"

There's actually like the alcohol industry definitely tries to put up walls around things like this. We can't use like all the normal beer words like logger, stout, ale, like interesting.

You name it.

Um, and so like we have to call our Mexican logger a copper for example, our stout a dark. Um, but I do did look at like those analoges and Beyond Meat and companies like that and how they made enemies with the incumbent industry. And you know, we want to make it really clear from day one like we're not out to stand on a soap box and kill alcohol. like we're here to add to it, bring a lot of new consumers into it and actually create a really new exciting viable part of the industry that just helps build the whole thing. So yeah, definitely learnings from that.

Well, thank you so much for coming through it. We're working through it. We're we're

I think I mean it says under half a percent. I think if I drink 50 of these, I can get a buzz going. So hell or high water here.

[laughter]

Yeah, there's a major placebo effect. So, it's like having one with lunch or on stressful work days or like my commute beer is my favorite beer to

commute beer. Yeah, it's like all these new occasions.

It feels a little risque. I like it.

Oh, it's delicious. Yeah. So,

thank you so much for taking the time to come shop.

Great. Great to meet you. Super super impressed with everything you guys have built and uh come back on anytime you news.

Yeah.

Uh thank you so much. Love the show.

Thanks so much. We'll talk to you soon. Great chatting. Byebye.

Cheers.

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switching gears just a little bit. We're going from non brewing beer to we have Pat Grady and Sonia Wong from Sequoia