Denver Beer Co.
Courtesy: Denver Beer Co.
This story is a component of CNBC’s recent quarterly Cities of Success series, which explores cities which were transformed into business hubs with an entrepreneurial spirit that has attracted capital, corporations and employees.
Alcohol-free beverage options have skyrocketed over the past few years, and that trend has especially picked up in the shape of nonalcoholic beer in Denver, an epicenter for craft breweries.
The town, nestled within the Rocky Mountains, has embraced the alcohol-free trend as breweries increasingly shift to incorporating more inclusive beverages into their offerings.
Nonalcoholic options on menus increased greater than 55% from the fourth quarter of 2022 to the identical period in 2023, in accordance with data from Technomic, a food service research and consulting firm.
Though nonalcoholic beers have been around since Anheuser-Busch launched O’Doul’s in 1990, recent surges in interest driven primarily by younger and more health-conscious consumers have caused an explosion within the sector, Technomic found.
And analysts forecast that interest will continue to grow. Between 2022 and 2026, nonalcoholic beer volumes are expected to grow by about 25%, in accordance with data from the IWSR, an alcoholic beverage insights company.
And in accordance with data from NielsenIQ, a consumer buying behavior database, Colorado was the second-highest state accounting for nonalcoholic beverage investment in 2023.
“Persons are becoming increasingly more curious, and since Denver is a city with quite a lot of those who are outside exercising and staying fit, there are quite a lot of people who find themselves fascinated by lowering their alcohol intake and staying healthy,” Keith Villa, co-founder and brewmaster of Ceria Brewing Company in Colorado, told CNBC. “In our case, we’re beginning to see increasingly more people be educated about nonalcoholic and alcohol-free beer and begin to succeed in for our products.”
Keith Villa., Ceria Brewing Company
Ceria Brewing Company
Ceria, launched by Villa and his wife, Jodi, in 2018, fully focuses on the alcohol-free beer market, which Villa said is “growing day-after-day.” The beer has been especially appealing to younger consumers, he added.
Nonalcoholic and alcohol-free beer may be made certainly one of 4 ways, Villa said: removing the alcohol with vacuum distillation, running the alcohol through a series of filters, using specialty yeast or making a low-alcohol beer and diluting it with water. Because those processes are expensive and time-consuming, Villa said it’s difficult for breweries to create nonalcoholic spirits.
But as beer consumption across the board continues to say no, Villa said more breweries in Denver are hopping on the trend.
“The market is getting harder for craft brewers, so to be able to bring some money into their business, they’re beginning to sell nonalcoholic beers,” he said. “There’s a requirement on the market, however the beers do should be made the suitable way. So long as we oversee one another and help one another, we are able to ensure that people have a very good selection of products which might be protected to eat.”
Keith and Catherine Villa.
Courtesy: Ceria Brewing Company
Denver’s beer scene
Food trend expert Kara Nielsen said that because Denver is such a beer-centric city, the rise of nonalcoholic beer and spirits suits with town’s narrative.
“People [in Denver] prefer to play hard after which have a good time,” said Nielsen, who formerly lived in Denver. “Within the last three to 4 years, there have been increasingly more very well-made nonalcoholic beers, including breweries in Colorado. It’s change into more of a selection.”
Denver-based brewery Grüvi capitalized on that selection, providing a wide selection of nonalcoholic offerings since its founding five years ago. Co-founder Niki Sawni said the corporate selected Colorado as its base due to its residents’ preferences for a healthier lifestyle and the next potential for growth within the alcohol-free market.
Sawni said his customers were mostly health-conscious consumers at first. But then, he said, nonalcoholic and alcohol-free beer became trendy, attracting more mainstream customers. Almost every bar or restaurant in the realm soon added zero-proof options in response, he said.
“It was just this realization that there was a spot available in the market for once you didn’t need to drink — you were left selecting between sparkling water or pop or something that wasn’t a middle ground to enjoy that did not have alcohol but still permits you to have that sociability,” Sawni said. “That is why we selected ‘Grüvi’ — it means fun and playful, and five years ago, nonalcoholic products were the other of that. So we were like, ‘OK, how can we attempt to make something that was so uncool popular?'”
And as his company has found success, Sawni said he’s also seeing an encouraging trend with larger, legacy alcoholic breweries which might be now offering support and collaboration in a “symbiotic relationship” that hasn’t led to any competition.
Niki and Anika Sawni, founders of Grüvi.
Courtesy: Grüvi
One in every of those larger breweries is Denver Beer Co., founded 13 years ago with a single taproom. Now, the corporate has multiple taprooms across the realm and has begun incorporating sparkling hop water, a nonalcoholic alternative, into its menus.
“At the tip of the day, we’re a beer company, but we also understand there’s this desire from consumers to have a product that is nonalcoholic,” CEO Robert MacEachern said. ‘With our ethos of being inclusive, we would like as many individuals to enjoy our spaces, so this was a natural extension for us for people to enjoy our space.”
For Denver Beer Co., the nonalcoholic trend has allowed the brewery to stay true to its core identity while also adapting to its customers’ tastes. MacEachern said he’s especially seen interest within the nonalcoholic beverages from run clubs or bike clubs that meet in the summertime and are in search of something refreshing while still getting the taproom experience.
And though alcoholic beer will at all times remain the corporate’s foundational identity, MacEachern said hop water has change into “a part of who we’re.”
“Denver is the epicenter of craft beer. We’re rooted in that industry. People in Denver embrace change and innovation, and that is allowed us to achieve success while coping with this nonalcoholic wave of behavior,” he said. “We’ll proceed to construct brand and brand equity — not only us, but all of the craft beer corporations. Nonalcoholic beer becomes an addition to who we’re and never a subtraction.”