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July 29, 2022

Healthy Growth: Athletic Brewing expands to Milford as nonalcoholic beer trend takes off

Photo | GARY LEWIS Athletic Brewing co-founder John Walker stands in his company’s new 150,000-square-foot building in an industrial park at 75 Cascade Blvd., in Milford.
By Liese Klein

Looking around the cavernous new Athletic Brewing Company facility in Milford, co-founder John Walker sees more than the culmination of a successful business plan.

The company’s surging sales and expanding line of nonalcoholic beers represent nothing less than a fundamental shift in the culture, Walker said. Social life and human connection don't need alcohol, he said, and Athletic wants to help drive the evolution to a healthier lifestyle.

“I think more than anything the fact that the world has adopted what we’re doing and nonalcoholic beer – the health and wellness trends – is really just kind of positive,” Walker said. “I think what we’re going to do is change the dialogue for decades to come.”

Athletic’s recent expansion to a 150,000-square-foot building in an industrial park at 75 Cascade Blvd., in Milford, reflects both the brand’s recent growth and future ambitions, Walker said.

“It’s slightly overwhelming but also really incredible,” said Walker, who founded the company with Bill Shufelt in Stratford in 2017. “I didn’t know that we would have such adoption so fast. It’s been really fun, really exciting, really challenging also, but led us to hire an incredible team.”

Beer started flowing at the Milford facility on June 17, marked by a ribbon-cutting that drew a host of city and state officials, including Gov. Ned Lamont. Connecticut Innovations (CI) made key early investments in the company and state and city officials worked with the team to help growth happen, Shufelt said at the event.

“As all of our early investors know, the state of Connecticut made big exceptions to help us get into the Connecticut Innovations angel investor program early on,” Shufelt said. The startup funding was aimed at technology innovators, but CI “saw an opportunity in our products to help change how Connecticut drinks, and they saw it as a huge overall positive growth opportunity.”

Among those present at the ribbon-cutting were representatives from West Haven’s Star Distributors, which took a chance on Athletic’s beers in the company’s first years, and Whole Foods, which has the brand in all of its 500 U.S. stores.

“We’re considering a foundation of the future,” co-founder Shufelt said of the Milford expansion. “We are going to be doing bigger and bigger things. We’re changing how the world drinks and we’re just getting going on this journey.”

Booming sales

More than 215 people now work at Athletic, with many set to migrate over to the new building in coming months as construction is completed.

The privately-held company does not disclose its revenues, but it does donate 2% of all sales to trail and park cleanups. Last year that donation totaled more than $1 million and will be significantly more this year, Walker said, putting annual revenues in excess of $50 million.

Inside the new building, cans are stacked up in pallets and lined up on conveyor belts ready for filling. The 40-foot ceilings stretch high overhead to accommodate mammoth 40-barrel brewing tanks and the catwalks suspended overhead to maintain them. A stretch of empty concrete in the middle of the brewing area will soon be reinforced to hold more tanks.

Photo | GARY LEWIS
Upside Dawn is Athletic Brewing's popular nonalcoholic golden ale beer.

Booming sales led Athletic to seek a new place to brew after it started outgrowing its home base in Stratford soon after it opened in 2017: Athletic went from making just 12,000 cases in 2018 to more than 1.4 million cases by 2021.

First on the docket was setting up a brewery to supply strong West Coast demand – that facility opened in San Diego in 2020 with a capacity of 150,000 barrels. (One U.S. barrel of beer holds 3,968 fluid ounces, or about 330 standard 12-ounce cans.)

Next was an East Coast base that could expand Athletic's production as the brand grew to more than 12,000 retail stores, bars and restaurants nationwide, including over 1,000 Buffalo Wild Wings outlets. After wrapping up a $50 million funding round, the company announced in 2021 it would expand while maintaining its original location in Stratford.

Amazon and other distributors had snapped up many of the large facilities suitable for Athletic in the area, but the team soon learned of the 150,000-square-foot building on Cascade Boulevard, much of which had been retrofitted as offices, Walker said. Forced to downsize during the pandemic, the company that ordered the renovations had pulled out of the deal.

Pennsylvania-based 75 Cascade LLC bought the building for $14.5 million in July 2021, and soon announced a long-term lease to Athletic.

Once fully operational, the Milford plant will be able to produce 450,000 barrels a year and serve as a hub for the company’s online business, which shipped more than 50,000 packages a month directly to customers as of this summer. As of July, Athletic had customers in all 50 states and across the world.

Growing competition

Why such explosive growth? Athletic had the luck and foresight to fit itself into a wide-open niche. Often stale and watery, the nonalcoholic beers of old were scorned by drinkers and teetotalers alike even as customers looked for lower-octane alternatives.

“It’s a hard nut to crack, decades-old stigmas around nonalcoholic beer,” Walker said. Alcohol-free beers also require a high level of skill to make, as brewers can't rely on alcohol as a preservative. Food safety requires a complex manufacturing process in addition to the steps needed to infuse flavor.

Hoping to educate drinkers on the possibilities of nonalcoholic beers, Athletic centers its marketing on tastings to expose people to its products.

“We do a lot of sampling,” said Chief Marketing Officer Andrew Katz, adding that the company often sets up at runs and other outdoor events in line with its health-and-wellness messaging. “The opportunity for us is to get people over the hurdle,” Katz said. “When people try our brews, they’re like, ‘Wow, that’s amazing.’ ”

The nonalcoholic adult beverage sector is growing, according to industry experts. Analyst IWSR Drinks Market Analysis reported in January that the worldwide market for no- and low-alcohol beer, wine and spirits hit $10 billion by the start of 2022, growing by 6% year over year. Beer and cider were projected to drive growth going forward, the analyst said.

Now other companies have caught on to the nonalcoholic beer boom, with giants like Anheuser-Busch and Heineken debuting alcohol-free beers. Regional craft beer mainstays like Two Roads of Stratford and Brooklyn Brewery have also entered the market.

Walker said that Athletic welcomes the competition as an opportunity to spread the message across demographics that nonalcoholic beer can be tasty.

“The fact that there are other brewers and other companies popping up … supports our mission,” Walker said. “It's awesome to have help from players big and small, sharing the fact that this is just positive.”

New products

Athletic is also expanding its product line to appeal to a range of drinkers seeking tastes beyond the traditional hoppy IPA. Flavors that capitalize on the latest craft beer trends include its Blackberry Berliner Weisse, modeled on the refreshing sour beer, and its Downwinder Gose, infused with coriander, lime leaf and salt for a nonalcoholic take on a German wheat beer style. (Most Athletic beers retail online for $13 for a six-pack.)

Athletic Lite made its debut earlier this year for light beer drinkers, along with All Out Dark, modeled on a hearty stout.

The company has also tapped into trends like spiked seltzer with its DayPack line, a series of complex and refreshing sparkling waters with a hint of hop bitterness and flavors like blood orange, yuzu and black cherry ($9.99 for a six-pack.)

The brewery's expanding product line and growing footprint all validate the promise the founders saw in beverages that allow for safer and healthier socializing, Walker said.

“Now, if you like beer, you can have it any time and it won’t impact your operation or your senses at all,” Walker said. “We’re helping drive kind of a change in the way people think about their lives – being optimistic and being at your best.

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