The Best One Yet - BONUS #2 🍺 The Knight of Non-Alcoholic Beer: Bill Shufelt, Athletic Brewing Co-Founder & CEO

Episode Date: February 3, 2023

First, he was in finance. Then he got rejected by 100 investors. But now he’s raised $175M… and opened breweries on both coasts.We just popped open cans from the largest non-alcoholic brewery in the US. CEO Bill Shufelt and his co-founder pioneered a non-alcoholic beer you’d actually want to drink — and it now controls over 50% of the alcohol-free craft beer market. Bill sat down with us, over a few of his own non-alcohol beers, to tell his story in our 2nd Interview Pod. Cheers.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

When I used to order a non-alcoholic beer at a work dinner, like, you try to like whisper it to the waiter and be like, you know, like they'd be like, what? Another virgin banana daffery, sir? Yeah, they'd be like, sorry, let me turn down the music, make sure I got that right. I'm like, no, but seriously, it was like so awkward or they'd come back and be like, we got everyone's but yours. What was that? Record skips. Yeah.

Yeties, our guest today doesn't stop when dry January ends. But he's not drinking those virgin banana daqueries either, Nick. His startup athletic brewing controls over half the non-alcoholic beer market. But they don't pop champagne to celebrate over there. He pitched 100 investors on his startup idea, and he got 100 nose. But now he's raised $175 million for his breweries. He began his career on Wall Street crushing spreadsheets. But now he's in San Diego crushing cans.

Jack, he can run an ultramarathon. Nick, that's because he has. hasn't been hung over in a decade. Yeties, our guest today is Bill Shufelt, the co-founder and CEO of Athletic Brewing. Athletic Brewing, the largest non-alcoholic craft beer company in the United States. This is Nick. This is Jack. And today's interview pod is the best one yet.

Nick, let's jump into the conversation. Yeties, hope you enjoy the ship. 15 years before this song, two boys from the Northeast met in the dawn. They had an idea that caused a cultural 50%. That's a fat tip. So non-alcoholic beer on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show.

So non-alcoholic beer had a tough start. It was born out of prohibition. Alcohol was taken away from people. People were angry about that. And then near beer didn't really change a lot for like 80 years after. And I think what all started to happen at once is there were people like me and in other pockets of the world. All at once, people are realizing there's a huge gap here. And they want healthier options, more mindful options, options that fit in their life.

at all different times for any number of reasons. You hear about athletic a lot more, and it's credited a lot with the movement. But there are upwards of 50 companies in our space doing some really cool things now. Okay. Yetis, we were grabbing lunch with Bill before this. The place where we went had athletic brewing beer is as a total surprise to you in the store.

I pointed to the fridge. And I said, Bill, do you see that? And he said, you planted that there. And I said, no, I swear I did not plant this. What is that like seeing your product in person in the wild. In San Francisco, which is 3,000 miles away

from where you started your non-alcoholic beer company. Athletic and the wild moments are always very cool. It was slightly overshadowed by the moment of being a Yeti getting to have lunch with Nick and Jack in person.

But I was like going from that overwhelming moment to sing it in the fridge, but getting to share a beer with you guys was amazing. As the creator of Athletic Brewing Company, how would you describe the company to our audience? So I think our overall effort is basically getting beer up to the modern life in a way. So we are all so busy, have so much going on.

We're 24-7 connected to our friends, family work in our pockets with our phones. And then all of life is captured on video these days too. And the world is a stressful place. Like we're not trying to take away alcohol from anyone. We're not trying to bring back poverty. We're not judging anyone. But it does go to reason. Like most people are not drinking most of the time.

And we want options that people don't have to sacrifice. on the quality of the option or their social experience to have amazing beer. It just doesn't happen to have alcohol. I loved drinking and everything about the occasions, whether it was a work dinner, wine with my wife, friends, family, bachelor parties, weddings, whatever. And I loved everything about like what drinking occasions were about. But when I stopped drinking, I realized I still loved everything about those occasions. I just didn't have a drink in my hand.

It was never about the alcohol. It was about that moment when you first show up at a bar, you see a good friend, you see your brother, you see a family member that you were just so excited to see. It's not like, oh, I really wish I had a haze in my head right now for this moment. While we were at lunch with you, you were describing to us what it was like when you actually started the company. You're in Jamaica. You're with your wife. This is actually after months of training for marathons.

Also after months of not having drank alcohol, right? Correct. Take us back to like, what is the scene? what ends up leading up to the moment where you say, I have to start a non-alcoholic beer company? Like you guys, I never intended to be an entrepreneur. I had a very traditional financial career. And I assumed I'd be doing it the next quarter of century. And I really liked my career. And it was what I was always going to do, except I had this life change where I stopped drinking for positive lifestyle reasons, but was then thrust into the penalty box in basically everything I did.

Socially? Yeah. I was on the kids menu. everywhere I went. And it was like, I loved going to sports bars. I loved going to dinner. I loved doing everything social I used to do. I love relaxing on the couch. And all of a sudden, I realized that just there was a huge opportunity out there that

was being unmet. And it was like pain after pain after pain. And I would voice this to my wife. And then I was like, someone should just fix this. Like, why can't there just be great non-alcoholic options to pair with a great dinner and she literally grabbed my shoulder and spun me around so hard. She was like, that's a great idea. You should do that. I was like, do what? It didn't even occur to me that I had an idea. You're like, you want me to say that again? Yeah, she like, basically hit me over

the head with it. And it was such a memorable moment for the two of us. And like, we just couldn't stop talking about it, researching it. And like, my passion for it from that moment just grew and grew and grew. And it wasn't just that idea. So, yes, I had a financial career. And yes, it was like that original realization that this is a huge economic opportunity. Like we said, 50% of adults barely drink at all, but all adults are not drinking most of the time. Yeah. And so it'd go to reason that non-alcoholic drinks shouldn't be 0.3% of the market. It should be some double digit percent of the adult beverage market. And that was just economic sense. And actually there was proof of this being a real thing in the world. Worldwide, non-alcoholic beverages

are above 5% of the global beer market. It's just in the U.S. that it was 0.3%. Why is that? Is that just a cultural thing? NFL Sundays? There's like a stigma. We see so many beer commercials. We were saying, it almost feels like there's a stigma associated with non-alcohol or a non-alcohol lifestyle. Speaking of which, when you weren't drinking but were at social events where drinking was expected, what would you order and were you like shamed by what you were ordering? I realized very quickly that like people didn't care if I was drinking or not drinking. But like it did make them uncomfortable if I would order a drink that was like made me uncomfortable. It was like this.

Like I won't like disparage any brands or anything or like. A dirty Shirley. Yeah. Or if you just get like an extremely fancy virgin drink in your hand. Yes. Like I'm no. I'm a fan of. of a virgin banana daffrey. I just want to put that out there. So there's this big economic, very obvious opportunity that had worldwide precedent for me. And so I was building this business

plan for two years around that economic opportunity. And me and my wife were talking about like doing surveys and every data point was pointing. She was in business school at the time, right? Yep. And so she was in a really receptive mindset to hear an idea. And then she identified it in me. We started researching it, running surveys. So I essentially had this 96 people. white paper on non-alcoholic beer written. Choose your silent co-founder. Exactly, yeah. So between her punching you on the shoulder and saying that's a great idea to you opening

up your first non-alcoholic brewery, that was two years. Were you working in finance still during those two years? Way more, yeah. So that two years of original research happened where I was like reading, brewing textbooks, coming up with the business plan, getting everything all buttoned up. But I still, if you had asked me two weeks before I quit my job, if I was going to do anything more with this, I would have said 10% chance. Yeah.

And I actually went away for a weekend. My wife read all the materials. And she was like, what are you doing sitting on this? She was like, I don't want to know you in eight years. She's a legend. She's the loud co-founder. She literally sat me down there. I was like, I don't want to know you in eight years when non-alcoholic beer is an

enormous thing. You saw it coming. You did all the legwork. And then just watched it happen. She's like, just resign and do it. But it was the next thing she said, where she identified the impact stopping drinking had on my life. It was like sleep, relationships, intellectual curiosity, financial, like my health.

Like, I started running ultramarathons and I lost like 30 pounds and was sleeping eight hours every night through the night. And we both knew like alcoholism effects, 15 million Americans documented. So probably more than that. So number three, all causes killer in America. It contributes to a wide range of other health. problems. And it was when she pointed that out, the impact side to go along the economic, that was when I just couldn't sleep anymore at night. I was so excited. And I basically didn't

sleep for three nights and resign the next day. Okay. And what was your day job at the time? So I worked at one of the world's biggest hedge funds, which was a great spot. And it was a great intellectually challenging merit-based career. And I would have never left there. And it was a great training ground for like the next chapter in my career. Okay. So Jack and I can relate to this. you were a college athlete at a New England school, you then go into finance, you work for one of the world's biggest hedge funds. You're following a pretty traditional career path here. A lot of our listeners, a lot of the Yetis out there are on this exact same career path. And then you do a 180. Yeah, you do a 180. You go from a finance paycheck, a big one hopefully to no paycheck whatsoever.

What gave you the courage to make that giant leap from finance to entrepreneurship? it was great support within the walls of my house for sure there was this like there was a flame I could not put out on this idea and I think that's one of the most important things I rec when someone comes to me with an idea and it's like should I do this I'm like well you know I used to love doing things on weekends I used to love watching NFL football but I realized late in business planning for athletic that I literally couldn't make myself pay attention to a football game I would go upstairs and plug in to Excel and think about athletic brewing. And I couldn't turn it off. I couldn't sleep at night. I was so excited. And you'll need that drive because the road is so challenging.

Like you've got to do the accounting at midnight on a Friday to like shore up your books. But that being said, if you are that excited about something or if you see this impact you can have on the world and you see your opportunity, I would advise taking it. It's the best interdisciplinary education experience you could possibly get in your life. Every single step of everything is more difficult than you could imagine. And nothing's ever easy, but it's also you get educated and connected to such interesting people. So interprenorship is also one of the things I'm most passionate about. Before we move on to further business about the development of the company, you said that abstaining from alcohol improved your health, your performance at work,

you became an ultramarathoner. Sounds like all good. Was there any detriment to your life from a standing from alcohol and maybe the social life? Was there anything in the back of your head that made you doubt that decision while you were going through it?

Besides the options and like some of the routines where like, you know, if you're having a great Italian takeout would have loved a glass of red wine or like a steak dinner, like a nice scotch or like there's all these routines

that you have to replace. But there were all these things that happened. like this light went on after like 15 years. When I was in high school, I found myself as I was basically 30 when I stopped drinking. And all of a sudden, this intellectual curiosity that hadn't been firing, start firing again. And I started like Googling random things like physics and like going on Khan Academy and being like, I want to refresh this like this Alv. It sounds like George Costanza. When George abstains from sex and he starts to become brilliant, his brain starts turning out. He's doing quantum physics in the background.

Absolute zero. By cutting one thing out of it. But that translated into my work career, translated into my fitness when I was running before I was surviving workouts. And I did fall in love with fitness in a big way, way too late to save my college football career. But that being said, I'd be like three miles into a run and feel like I wanted to accelerate

for the first time ever rather than just surviving it. And eating healthier was easier because I was always eating healthier. So the only problem with abstaining from alcohol for you was the absence on the menu for something to pair with your steak and something to pair with the Italian dish. Which sounds like a business opportunity. Fill that void in the menu. Fill that void. Exactly. So you were thinking about filling the void, but you needed to raise money because you were literally talking about building a brewery.

This isn't like developing an app. There's a lot of money that goes into a brewery. So tell us about the fundraising process. We were blown away to notice that you pitched not just five, not 10, not 20, not 30, not 40, not 50, not 60 investors. You pitched over 100 and you got a hundred nose. I cannot imagine doing the 51st meeting after getting 50 knows and going back out there. Was it a dark time? How do you handle that kind of rejection? So I went. So your wife unpunch you? My wife picked me up at a few very dark spots. Like, so I went from, yeah, one of the world's

biggest hedge funds where if I needed an answer or a question or something, I could, pick up the phone with 300 people and they'd pick up on the first ring and be ready, be there for me. And I went into a period where, yeah, it wasn't only the 120 fundraising meetings. It was talking to hundreds of brewers trying to find John, our co-founder. I would go to conferences with 10,000 people in the brewing industry and not be able to have a meaningful conversation. And I'd go back to the hotel at the end of the night and just flop on the bed, just totally beat up. So then the ultimate challenge here is, all right, you're pitching investors. You're getting these rejections. Part of the challenge must be, you're talking about a completely new industry. How do you pitch a totally new

concept in a new industry to investors? What is like the one line that you focused on that was like this unreality can be a reality? You know, most people don't invest in pre-revenue concepts, especially when there's not an exciting industry behind it. But then there were some really savvy investors too who, you know, beat me up on the business plan but came on board. I had meetings where I'd like two-hour investor meetings that were basically like rip up the business plan meetings and like reformulate the model and stuff like that. But that was all really foundational for the business. So you enjoyed that. I'm incredible, I didn't enjoy it, but I'm incredibly thankful for it. It started us on a much better footing. Were you eating into your savings like during this time,

pre-revenue? Yeah, me and my wife had basically budgeted a three-year budget where, you know, I anticipated I wasn't going to make a salary. And it was either going to work or not and would go back to finance, if not. So yeah, me and John were basically in to give it a run over a fixed time period. So my leap sounds crazy. Coming from the other side, John was in the brewing industry, was extremely highly awarded. And he had a family also. Like, it was just me and my wife. John had a one-year-old and a five-year-old. So his entrepreneurial leap into this was equally as crazy to kind of paint a picture. It wasn't like we're stepping into a brand new sparkling brewery and I had no credentials in the industry. I didn't really know anyone

in the brewing industry. And we stepped into a totally empty 8,000 square foot warehouse. And John just started stacking gatorade jugs on each other. There was a series of... There was one, two, and three. And, yeah, it was like a science experiment. And John and I didn't know each other at all. So we were just...

Wow. You're co-founder. Yeah, talk for eight hours a day over Gatorade jugs in an empty warehouse, which is like the weirdest thing in the world in hindsight. but it was just dialing every inch of our process. And John is like, we're not building a thing. We're not selling a thing. We're never going to market if this doesn't taste amazing. And by like batch eight, I was like, this tastes great.

All right. Talk about the extremes of entrepreneurship. You start at this incredible hedge fund. Then you give it all up and start going through three years worth of savings, pitching hundreds of investors who reject you and say no. Then we fast forward a few years. And you just got a $50 million check, a fundraise, from Big Soda, Curig Dr. Pepper.

How does that feel? You're not going to go bust. This is a totally different world from where you were a few years ago. How did you celebrate that win? It feels great. And we, for the first time, feel like we've gotten the foundation

under us with the two berries on each coast now. And it feels like the first inning of this still. Well, congratulations on that incredible first inning score. Should we pop open one right now? Let's pop one over. That's a cool way to kind of celebrate it. You want to celebrate the wind?

Let's do it. I'll take a hazy IPA, please, if you got one. Let's try. I actually have not had that one. Well, if you want to try it, you can. You should go for the athletic light. I'll try that. Now the interview really begins.

Cheers. Cheers. Congratulations. Seriously. Thank you. Yeties Jack and Nick here for a second. We actually did stop the interview at this moment, just to pop open some of those now.

non-alcoholic beers. You might have noticed I grabbed a light beer for Nick, even though they're non-alcoholic already. Well, you did that. Well, yeah, he's after Bill told us his founding story, it just kind of felt like the right moment to actually drink the stuff. So we popped them open. But now we're going to transition from the founding story to athletic brewing today. We're going to talk about competition, expansion plans, fads versus trends. We'll talk about how he got his beer into whole foods, and we'll talk about hangovers. Jack, let's jump back into the conversation. So between the Gatorade Jugs and the Dr. Pepper announcement, that was about five or six years.

Competition has arrived. And we just finished the World Cup in Qatar where Budweiser, Bud Zero was all over the news because it was the only beer allowed at the World Cup. They were promoting Bud Zero, zero alcohol hard at the World Cup. Are you excited that Budweiser got such a big moment with non-alcoholic because it raised awareness? Or do you see this as like a big competitor who's suddenly jumping into your space? I think it's way too early to even worry about competition. And as a general company philosophy, too, we don't talk or worry about competition. Like if we're looking to the sides getting distracted, we're not focused on our much bigger goals down the road and the impact we want to have in the world.

I think what Heineken's been doing in the category since 2019 is great. Bud Zero launched in Jan 2020 for the first time. And there's a number of other crapp breweries like Laginitas, Boston Beer, Brooklyn, and others doing great things in the space. And so we're happy to help building the category. Athletics pulling a majority of that growth forward. We drove about 40% of all non-alcoholic category growth last year and 60% of all non-alcoholic craft beer category growth last year. Even though six of the top 10 biggest craft breweries are in the category,

it's just we're so focused on it. And we've actually built the breweries and it's all we talk about. It's all we do. It's delicious, by the way. I really think this is a fine product. But Heineken in 2019, Bud Zero in 2020, you were three years ahead of the big guys. You got a head start. You have the first mover advantage in this.

How long is that last? Well, we technically launched May 12, 2018. So we're just getting going as Heineken came out. And like, we're really grateful for any dollars anyone throws into marketing the category. It's one of those things where some categories come into existence because they're backed by like a flavor trend or a style or a celebrity mentions it. non-alcoholic beer is a trend because of health and wellness and things like that where, you know, those are really durable mega trends and tailwinds are going to be blowing for a long time. Also love that you said trend versus fat.

Because one thing Jack and I were wondering is, you know, you've seen so many fads in the food industry, right? Yes, food and beverage. We covered on our show all the time, whether it's plant-based meat with beyond meat or spiked seltzer, which Boston beer company went all in on. Those two have fizzled a bit. Those, in hindsight, seem to have been fads. Can you tell us again, what brings you confidence that non-alcoholic beer is not a fad? Yeah, why is it a trend, not a fad?

I do think both of those categories are here to stay in a big way. You know, those are $5 billion-plus dollar categories, both of them. But that being said, non-alcoholic beer is not based around a flavor trend. It's not like a celebrity mentioned it in a song. It is just people want to feel better. They want to eat healthier. And it's not necessarily that they have to forego. what they used to drink. They can just have great things more days of the week, more hours of the day now.

So Spike Seltzer was more a taste preference, which may not have the durability. And it's a substitution too. So people are substituting one alcohol for another in the same day part. We're actually adding maybe five new drinking days to the week and drinking hours to the day as well. So it's like day share, essentially. We've talked about attention share before and not just market share. For responsible high performing adults. Exactly. drinking was a weekend activity at best. But with non-alcoholic beer, it can be a seven days a week activity. Completely different market.

For sure. And the great thing is, it's like you can now, it's not just that you can, if you're not drinking a non-alcoholic beer, even five years ago, it was you had to have a logger. That was it. Now, like, what do you like with your tacos on Tuesday? Right. You like on Monday. You're pairing.

Yeah. And so it's like, I'm going to grab a servaise on Tuesday. I'm going to have an IPA on Wednesday. Ooh, I'm having chili on Thursday. I'll grab a stout. As a new father, I cannot have a morning. We're like, I'm off. So a hangover morning is going to be a disastrous day for me.

Also, no more smearing off ices in the morning for you either. Speaking of smearing off ices, when you turn 21, there's an expectation in this country. You're going to get wasted that night. I got hit by a car in South Padre. I'm my 21st first. I was fine. I barely noticed.

You look great. What does your marketing, tell people, why should they drink non-alcoholic beer instead? I mean, in this country, between prohibition and the romanticism of turning 21, it's like there are such stigmas around not drinking. Our goal is that over time with the marketing we do, our goal has been with the name athletic and how we market our products to make non-alcoholic beer aspirational and positive.

So, yes, like our generation and older, we'll think of non-alcoholic beer the category it used to be. But now anyone who is coming up in their 20s or yet to hit legal drinking age will see people like JJ Watt, David Chang, Carly Klaus, talking about non-alcoholic beer in a really positive way. And, you know, not even like athletic marketing, but like high-performing people across all walks of life are talking about not drinking. You know, here we're in the backyard of Stanford where Andrew Huberman has his lab. But he did a whole feature on alcohol in August that was really influential throughout Silicon Valley and way beyond. I think when these cohorts of younger generations reach legal drinking age, I don't think it'll be stigmatized at all to look at a menu of non-alcoholic drinks and like just be ordering off either

alcoholic or non-alcoholic. Jack and I are putting together a list of all the value propositions of non-alcohol, like the ones you just mentioned. So like everything from like avoiding hangovers to avoiding calories to not getting too drunk to an athletic lifestyle to being sober 100%. Like there's so many. When you have an industry where there are so many different ways you can market a product, how do you focus on one? I think we just focus on how our products make people feel at the end of the day. You know, if you give people great products and you make them excited to incorporate it in their daily routines, word of mouth will tackle most of those problems for you. I'm a huge believer of a thousand true fans. Like, if you get a thousand people so excited about what you're doing,

they'll tackle all those marketing problems for you because it won't be like my message they're telling it. It'll be exactly what you think about it and why you're excited about. They'll tell people. That feels like a takeaway we should jump on a thousand true fans. How does your beer make people feel? I'm genuinely like athletic customer number one. And every year, I'm a full price e-commerce paying subscriber and I buy our beer in retail. And I think I have a pretty good feel for our customer. And it's just that daily reward occasion.

It's just a nice relaxing moment at the end of the day. or it's like finishing a stressful work day or after a workout. It's like those daily reward occasions. And it's just feeling great about like whatever you've just accomplished and time to relax. Turning your product into a treat yourself moment. Who's the target customer persona athletic goes for? Yeah. So the hypothesis has definitely been playing out where, you know, the category when we entered

it was this highly stigmatized, very specific category that was meant for recovering alcoholics, certain medical conditions, religious reasons, and like, there are very specific perceived reasons why someone would be sober. Our vision for the category was, sober is a very flexible word and most people are sober most of the time. And 80% of our customers drink alcohol from time to time. It's gone from generally an older white male customer base to younger and younger and almost 50-50 male-female. That was the hero stat that Jack and I know that we wanted to talk to you about because we thought that was something that would shock people. It shocked us that you're a non-alcoholic beer company.

Like you said, people who are sober are consuming this. And yet the vast majority, four out of five of your consumers also drink alcohol. That's like us. Us included. So it's not a product for the stone cold sober. It's a product for someone trying to reduce their alcohol consumption. Or maybe drink more beer, but have less of it, include alcohol. A flexitarian, if you will.

It's exactly that. What we do want to give people is more options, options for moderation. If you want to be having fun, but also like take a round off or have something non-alcoholic, like we think there's a big societal impact we can have, including more people in great moments, giving more people off ramps before they maybe hit that alcoholism endpoint. And, you know, it's just that overall impact on society's health. Like we want to be there for that and see a huge opportunity to put a big positive dent in the world. I can tell Jack wants to talk about the can. Can we pivot to packaging?

We can talk about the packaging. Packaging is a product. When I approach the beer aisle in a grocery store, I see a hundred different options. And a lot of times, it's the one with the packaging that jumps out at me. And it's the one I investigate further and decide whether to buy or not. We've covered on our pod Liquid Death, which has hit a huge valuation with water because of a cool camp. What's athletics secret to great branding? I think liquid death is honestly a great analog and we have a lot of admiration for what that team has done.

And that's a great example of how does the product make you feel? I think marketing and packaging are equally as important as the product in the can at that point. That's incredible. Wow. You have a very limited chance to convey a lot to customers. It's very often one second. So what would be your one piece of advice on branding for a product and other entrepreneurs made of these products where it's all about the shelf space and it getting seen? What's the one piece of advice to get attention?

Taking a step back, like everything about athletic is authentic. Literally everything about the company oozes out of my own lifestyle and how it was marketed, how it was built, the occasion, the consumer and everything. So the packaging was just an extension of that. And having really talented partners on the art and creative side who are able to take what I was saying and help it show up graphically, I'm like, this is what I want people to feel. I want them to feel like outdoorsy, active, excited, proud to hold the can in a bar. When I used to order a non-alcoholic beer at a work dinner, like, you try to like whisper it to the waiter and be like, you know,

link twice. And they'd be like, what? Another virgin banana daughery, sir? Yeah, they'd be like, sorry, let me turn down the music, make sure I got that right. I'm like, no, but it was like so awkward. Or they'd come back and be like, we got everyone's but yours. What was that? Record skips?

Yeah. And so I wanted it to be a really empowering, easy bar call. And then it was in your hand. You weren't hiding the label. So everything about it was meant to be empowering aspirational positive and also not tied to any geography or anything. So like... Oh, it's like universal. Had seen so many crap breweries come and go relatively that were either about like one region or like one river in a region.

And then like they try to sell beer across the country. And people across the country are like, yeah, what do I care about that? It's probably the case that most brewers don't have ambitions to scale globally, right? Or nationwide. Which brings us to the paradox of craft beer, right? The paradox of craft beer is that is an inherently craft artist and fraud means small. And yet, you're taking venture capital money to scale nationwide. That feels like a paradox.

If you get big and succeed, are you no longer craft? Exactly. So I think it was like cool in craft beer not to be outwardly commercial, but at the same time, everyone is commercial. Like all these crappers did expand and open distribution and shipping. across the country and maybe tried to speak less about being commercial. I think everything about craft is how quality your product is. And like at whatever scale you do that in, like craft is being proud of your craft, being proud of your community, being authentic.

And if you can hold on to all those super important things, that's great. But outside of the craft world, where I differ with a lot of that like spoken ethos at least is I think commercial is very cool. there's nothing cooler than providing great jobs to your employees who are like our athletic teammates are doing amazing things every single one of them and protecting their jobs is a huge responsibility for me and so I did want to be very commercial and scale to hit our impact and to hit our mission are we really going to revolutionize how people drink and have a huge positive impact on the world's health and tens of millions of people if I like play a

quoy and I'm not commercial and like can't meet demand. You mentioned job creation and you mentioned scaling and ambition to have a big impact. First brewery was in Connecticut. Second brewery was in San Diego. Well, John and I thought the first Connecticut brewery was huge. At the last minute, I doubled the plans and raised a lot more money. And you probably thought that was crazy at the time. Yeah, people did tell us we were total morons for building a brewery that big. They were like, you'll never sell that much, not alcoholic beer. And we outgrew it in 10 months. The biggest, irony is so that, like, I was grinding to raise every dollar. I would have dinner with five people. And I remember one moment in August 2017, I had dinner with a college friend who got together

four buddies in Brooklyn. And all them said they'd invest $5,000. And I was, it was like such a win. It was like, I had been on such a cold street. But so it was a grind to raise that money. But ironically, we went from one summer, nobody. talking to us at all. Like we couldn't buy a conversation about non-alcoholic beer to one summer later. It was so ironic there was like this huge non-alcoholic beer shortage and like we had people yelling at us for not be able to make enough non-alcoholic. I was like, that's rich. Where's the third brewery going to be? Yeah. I mean, hopefully we're scaling up the two existing breweries but we do have our eye on a few places as well. So which places? I would be lying if I said we

hadn't done brewery tours in some other regions. Okay, so acquiring an existing brewery? Potentially, yeah. We are curious because I know you want to talk about growth. You want to talk about even more growth? I want to talk about opportunities to continue to increase your impact. And, you know, Nick and I would love to cover on our pod the story of Budweiser acquiring athletic.

You can see the takeaway right now of that headline. It would be an exciting headline. Big beer acquires biggest non-alcoholic beer bread. Would that be exciting? for you if that outcome came about? I think we're still very early innings in this and feel like we're just getting going. Of course, like I am a steward of shareholder capital as well and jobs. So we are B Corp also. So I evaluate shareholder capital, our community, our teammates jobs, the future prospects of the category. Like, can we have the impact we want to have on the world

as a partner of a bigger company? And the answer probably is yes, but I would want to think about carefully about all those. And that's definitely not to say that's the perfect partner also. Athletic has goals to be a very global company as well. We do a lot of business in Canada, UK, starting to do more in Europe. And so it could take shape all over the world in different ways as well. So this is a product at the end of the people see. And we've heard before that the war is in the stores. So how did you get onto the shelf at Whole Foods, which is where we bought our first athletic brewery beers, actually. So we had started. The beer started tastes good at this point.

That's key. That's big. We moved the Gatorade Jugs to John's parents' basement at the time, actually. And then we started construction at the brewery. So that morning, we hand-bottled beer in the garage at John's house. Wow. And I drove at Whole Foods Regional. And so I had these unlabeled glass bottles that we had hand-bottled. And this is on a deal with Whole Foods.

Yeah. And so we walked- Were they in a cooler? They were definitely... It actually might have just been the dead of winter. I don't know if I had a door. I walked in and credit to Chris, the guy, so it was Chris and Justin, who were the first Whole Foods Northeast believers.

And they basically were like, we've been waiting for this. And I was like, what? You're kidding. And they're like, there's an enormous disconnect between what we get asked at the store level and what's being provided. Interesting. They're like, but we didn't expect someone to actually be able to make it taste good. And they're like, I assume you have some branding on these cans eventually.

And I was like, yeah, it's beautiful. and showed him pictures. And they're like, great. Like, let us know how soon you can get it in Connecticut stores. And then very quickly, Whole Foods was the one who pulled us national and has been a great believer in the set. Okay, this brings up a big question, Jack and I were curious about. Do you go on a soda shelf? Do you go on a seltzer shelf? Do you go on a water shelf? Do you go on a beer shelf? Where do you put a non-alcoholic beer? Kind of like any finance guy tested everything and found that people are looking to buy beer on beer shelves. And beer distributors are incredible at merchandising that shelf too. And they're great at logistics and deliver. And we have great distribution partners.

And we also in distribution had a big innovation too where, you know, it wasn't only in beer. It was really in all a beverage. Nobody was doing e-commerce and beverages in 2017. And in 2018, I just started packing and shipping packages on my own. Our marketing was literally just my iPhone. I'd be like, hey, community, we're going to try a double IPA. It's going to drop tomorrow at 5 p.m. And we started doing these limited drops on our website. And they were selling out in like 30 seconds. And then my cell phone, because that was the only phone number for the company,

would ring for like six hours. I remember one time I was driving in Vermont. And like we had, I was like, oh, we must have released the beer because my phone vibrated across and like fell on the floor. Yeah. A couple of my buddies in Vermont are trying out dry January. this year. Yeah, we just finished dry January. One of the all-time manufactured marketing months. We love a manufactured marketing moment or month because, yeah, it's not a

traditional holiday, but it's still a seasonal event. Can you tell us if you saw a sales jump during dry January? So dry January actually was not a commercial effort. It was a like real societal impact thing started by a company called Alcohol Change UK. So it's been hijacked by big corporation. Yeah, it did have very positive beginnings at least. But athletic does recommend, like for people, like give dry a try is what we say. So rather than have people sign a pledge of sobriety, like literally just try putting a six-pack in your fridge and see how much you enjoy having that non-alcoholic beer anytime. But to answer your question, yeah, we, the first week of January, we sold over 50% more beer

in the first week than we did Fourth of July week. How do you keep the momentum when you have in a moment like that? How do you kind of hook them and book them? How do you keep customers coming back after they get that first sample and are trying something new? We definitely have an advantage in that our product is almost an oxymoron from what people have known in this category to be, that they're so shocked at how good it tastes and how low calorie it is and how easy it fits into the routine. And how many times a week they actually reach for a beer and feel good about it. That our retention from people who try us in January is actually crazy high.

And we don't have to do any special outreach to keep them. They just really enjoy the products fit in their life. What a great time for the business. Yeah, retention is such exciting. It's almost more exciting than getting the first customer, the idea that you can keep the customer. You can't talk about the beer industry without discussing TV commercials. Classics of the beer industry.

We haven't seen an athletic TV commercial. We did check out your YouTube page and you have some things like commercials, but they weren't funny, which Budweiser tries to be funny with their TV commercials. try very hard to be hard. Is it on the roadmap to have like kind of an NFL Sunday style TV commercial? Are there going to be three toads that say athletic is what Jack's getting at? I love it. Go with like the trademark infringement strategy. Yes. Works every time. Our thing really isn't like a forced schick that like trying to be funny. It's like trying to just be authentic.

But also like relatable like you said is so our January. spot that's playing during like the college football playoff, some NFL games and stuff. So it features some of our, we're really fortunate to have some well-known celebrity investors who discovered us. But, you know, JJ Watt doing fun things. David Chang cooking dinner for his family and yelling after his kids, but like really relatable things that you could be like, oh, like I do that also. Jack and I have seen that your range of investors isn't just Dr. Pepper. It's also some celebrities. You got J.J. Watt, pro football player. You got David Chang. celebrity chef, you have celebrities, and we keep seeing more and more celebrities invest in

startups. They are now the investors. What should our audience know about that? What should the eddies hear when it comes to celebrity investors? Is that just them giving you a check? Or do they actually provide more value beyond just a venture check? So we really try to feel that out and go for values alignment before we like partner anyone, really any investor who joins our cap table period than now. Someone like JJ, who has built up this incredible personal brand based on athletic excellence, to have him publicly say, hey, like, to all you, football guys.

It's really tough to make fun of non-alcoholic beer, if JJ Watts drinking non-alcoholic beer. Or if David Chang is saying, this is great food, or Naomi Osaka or Carly Claus, Lance Armstrong, so. So you have standards for your investors, even if they're celebrities, just like they have standards for you on maybe the financials. It sounds like the celebrity investors want to be role models. Yeah.

For the non-alcoholic beer movement. Not just marketers. Which is such a value ad for you. Not just investors. All right. Yeties, Nick and Jack here again. We now know everything there is to know about non-alcoholic beer. Yeah.

So let's pivot to the future. Okay, Bill is now going to tell us about the future of bars. And he's going to share his personal advice for entrepreneurs and for human beings. Jack, let's manifest the rest of the conversation. The year is 2043. Jack and I are going out on a date with our wives, a double date in our self-driving robo helicopters, let's just say. We go to a bar 20 years from now.

What does the bar look like in the world 20 years from now? Is non-alcohol a part of that bar? Will our college-aged children be playing beer pong with non-alcoholic beer? Exactly. You know, last week it was on the cover of the New York Times. The country of Canada is no longer recommending alcohol. like safe as like, like, you know how like the food pyramid used to have like one drink a day or two drinks a day. Canada is saying zero. Time magazine had a spotlight piece on like the harmful

effects of alcohol, as did New York Times last week. It's just like more and more in front of people these days where like all of us used to get our information from advertising. And now it's like at your fingertips and we have straps on us or like mattresses that measure how you sleep. And it asks you in the morning like, oh, what did you eat and drink last night? And you're like, the trends will show up. So I think over time, you know, that will probably win out. But that being said, humans have been drinking beer for a long time. It's so ingrained in our society. And like, my goal was it's not to kill alcohol whatsoever. It is to have you be able to open up a drink menu and be able to get everything you want, either alcoholic or not, depending on if you feel like that. So the bar in 2043 is a

reducititarian bar. It's a flexitarian bar. It's got both options, both options, front and center. Bill, you are clearly focused on performance. It's the reason that you stopped drinking alcohol, what, 10 years ago? What other elements of your life lead you to live a high performance life that you can share with our audience? Yeah. So some building blocks that ladder up to most of my days are very intentional about, like, being pretty shameless about getting a good night's sleep. Like I think for a long time and in society still, it's been glorified to like operate on very little sleep or be so busy. Sleep in the floor in the office. It's unquestionably good for you in long term health and productivity to get a great night's sleep.

And like even if your day starts later, the days you get a good night sleep and a good workout and do something mindful, like are usually much more productive. I'd say meditation is another big thing. I kind of have my own structured meditation practice that I've worked to. but you said the word manifestation jokingly before, but like I definitely manifest like not only my long-term goals, but my daily what I'm getting done. How does that work in your daily routine or like weekly routine? Where does that fit in? You know, I either write down or say over and over in my head, like the same goal 15 times. What do you think that does? I think if you're really focused on things, you will almost subconsciously move towards achieving them. It's almost like you're tripping into it.

And you're like, oh, I didn't mean for these things to ladder up to that. But also, you know, before you turn on the inbox and hit the just like flywheel of, you're like, you can be extremely busy all week and get almost nothing done. Yeah. But if like every day I try to do my key three things before 10 o'clock in the morning. Like so if I've done these three things, the day is a success no matter what. My New Year's intention last year and I actually succeeded in the nick of time was to own my mornings. And that meant get the right amount of sleep, do meditation, work out if I wanted to work out, and like have breakfast.

I mean, starting the day, it sounds like, is such a key way to crush the rest of the day. Yeah. And I have a short-term list and a long-term list. So I get it out of the inbox onto the list. And if it sits on the short-term list for more than two weeks, it gets deleted, no questions. So, like, I may have thought it's important, but it's not important if I'm not doing it. That's a really smart one. That's a great hack.

Yeah. so that your to-do list isn't never ending. Yeah. One other thing I love, I love starting the day the right way and owning the day, but like winding down from the day the right way too, it's so easy to have like the one thing that went wrong or irk to you dominate 80% of your afternoon in headspace. But, you know, you might have had three huge wins or like a huge win in the morning.

And so I do a bit of like gratitude wind down. Like, so when I get in bed, I just take five minutes and it's like three things I'm thankful for, three great things that happen. in that day. And then, yeah, that's kind of my evening meditation. We always say to the eddy, celebrate the wins, like on a Friday. But celebrating the winds doesn't have to be popping a bottle of champagne. Celebrating the wins can be that routine you just went through at the end of the night where you're just remembering the good things. Yeah. And not lamenting the bad things. Exactly.

Grabbing a coworker and being like, this was awesome. I know we're going to be talking about different things tomorrow, but that was great. Now, Bill, we can we can really empathize with you on this because we started our careers in finance before we jumped into entrepreneurship. What advice do you have for people in finance who may not feel like finance is their future or the right thing for them? On the one hand, there's definitely something to be said for a stable job and a stable paycheck and the grass is always greener. If you have a great quality of life and, you know, that balance and that predictability is perfect for a lot of people. But if you do have something you are so passionate about, itchy, you just absolutely can't scratch and something

that you can't turn off, I would recommend going for it or at least testing it. And then once you do go for it, there's some really foundational things in any entrepreneurial venture to make sure you check the box on. Make sure you're starting on a good legal footing. Strongly consider having a co-founder who's got complimentary talents to you, as I'm sure you guys can speak to. But it is a lonely endeavor and having someone to crack jokes at your expense along the way is hugely helpful. You have to tell us twice about that. We're also very complimenting that Jack's blonde and I'm a bruno. And before we finish, Bill, this show is called The Best One Yet.

We want to know your best ones yet. So something we do at the end of every interview is we whip up some rapid fire questions for you. Take a second if you need it. Bill, what is the best slice of pizza yet? Katowi Pepe Corner Pizza, Lucadia. Bill, what is the best book yet? The Alchemist by Palo Cola. Who is the best business leader yet?

I honestly like to take like bits and pieces from ever. I don't think anyone's got it totally figured out. Bill, what is the best coffee order yet? I mean, a double espresso from pretty much any cool coffee shop. What's the best drink yet that's not an athletic beer? I'm really into motto beverages these days. What's that? We don't know about that.

Sparkling macho with apple cider vinegar. That's an innovation. We got to can that. Bill, what is the best airport terminal? yet. I gotta go San Diego. It's like flying into paradise coming home every day. Who is the best performer yet? Billy Joel. And what's the best podcast yet that isn't the best one yet? Oh, wow. I listen to so many podcasts. I might go with either Huberman Lab or Lex Friedman,

not including this one, right? Exactly. And finally, at the end, End of every story, Jack and I do. We like to know what the takeaway is. But we want to know from you. Yes. We're going to let you tell us what's the takeaway on athletic brewing and the non-alcoholic beer industry?

I mean, it sounds crazy. And it was something nobody cared to know about a few years ago. But I think we are really changing the way the world drinks. And I think it's just going to be so common sense in 10 years. I bet we celebrate the wins on your latest fundraise. Congratulations. Thank you. And going from no.

paycheck to a $50 million check from Curry, Dr. Pepper, and creating a whole new category that you're dominating. So, congratulations. Celebrate the wins. Bill, thanks for coming on the show. Thank you. Cheers. Cheers. Cheers. I'm not going to do birthdays or fun facts. Is that not part of the live gig? Now, this is a bonus podcast. So we don't typically do the shout out to the fact of the day. The best fact yet on this. We're going to. We're going to because you've got a birthday shout out, don't you? Don't you, Bill? So I wanted to shout out, huge fan of the pod. our CMO Andrew Katz birthday tomorrow when this will likely air.

From Westchester, New York. Exactly. Also, we don't typically do the best fact yet on a bonus pod. You know what? Bill fantastically brought the best fact yet. So Bill, what is the best fact yet for the Yetis to hear?

So if anyone wants to learn a fun fact about the beer industry, I don't know if anyone wants to guess how long people have been drinking beer. My buddy studied abroad in Austria and said that monks there first did it because they were fasting and beer provided nutrients.

I heard people have been drinking beer longer than they've been drinking water. It's actually close to true in some ways. So I think this predates people even living in Europe. I think beer is believed to be first brewed in like the bread basket of the Middle East near Iran somewhere, around 3,500 B.C. So over 5,000 years ago. Wow. But it has been long historically a water replacement in society too because alcohol is a preservative. And it keeps the water fresh and bacteria.

and stuff like that. Bill, congratulations on the fundraise. And to anyone else celebrating something today, make it a T-Boy. Celebrate the wins. Great. Great job. Congratulations. Thank you guys so much.

Really appreciate it. Just being on the riff like that. Yeties, you look fantastic today. Thanks for listening to our second T-Boy interview pod. We got more of those to come. Have a fantastic weekend. We'll see you Monday. Can't wait.

But Bill, we actually have to ask you as a first question. If you play beer pong with a non-alcoholic beer, is that cheating? Asking for a friend on this one. I think it depends how far into the tournaments you go. I think there's definitely... Performance-enhancing drug. Is that what it is, Bill? A PEDA.

What it could be. Clear heads, clear eyes. I think so.