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49% of Americans are trying to drink less alcohol.
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So we know people are looking for alternatives.
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Non-alcoholic beer is one of those alternatives, of course.
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We're up against anything that doesn't have alcohol.
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There's so many categories that exist right now that play off of flavor, play off of functional
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benefits.
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Hello and welcome.
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You're listening to Marketing Matters on the Wharton Podcast Network.
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It's our weekly podcast where we analyze the latest in advertising, marketing, customer
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behavior, new product launches, branding, retailing, everything marketing.
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I'm Barbara Kahn, the Patty and J.H. Baker Professor of Marketing, and I'm joined by
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my co-host, Professor Americus Reid, the Whitney M. Young, Jr. Professor of Marketing and the
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brand identity theorist.
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And today, we have a very interesting guest.
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We are joined by Rosalie Kennedy, who's the Senior Director of Marketing, and I'm told
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the first marketing director really, at Athletic Brewing Company.
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She's played a key role in building one of the leading brands, if not the leader brand,
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in the non-alcoholic beer space.
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And she's helping define that category as it continues to grow.
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In this conversation, we're going to look at the consumer shifts driving the rise of
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the non-alcoholic beer market and how brands are reshaping the perception of what it takes
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to build and differentiate in a rapidly changing and evolving market.
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So welcome, Rosalie.
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Thank you.
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Thank you.
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I'm so excited to be here.
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So let's just start.
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One of the things we were talking about before we started the show is one of the interesting
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things about Athletic, and I think that you came a little bit after this started, but
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definitely built on it, was that I believe when they launched, they had a deal with Whole
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Foods.
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And that was part, I think you said you came to the company in 2020, and they launched
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in 2018 in Whole Foods.
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You want to talk a little bit about why Whole Foods is an interesting retailer for this
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product?
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Yeah.
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First off, we are their biggest supplier in beer, period.
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So not just non-alcoholic beer, but all beer.
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We're the biggest supplier at Whole Foods in the country.
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So we've had a longstanding relationship with Whole Foods.
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And you're right, it started before I joined, but what we really like about the partnership
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is we have a shared target demographic.
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The people that shop at Whole Foods, they care about wellness, they care about what
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they put in their bodies, their high household income.
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And those are all factors we think about for Athletic Brewing.
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With non-alcoholic beer, it's not necessarily an alternative to beer.
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It's just a good choice to make.
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And so that's why we think Whole Foods makes a lot of sense for us.
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Let's just talk about the category and like what came first, the chicken or the egg?
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I mean, did you come first?
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And because you had that alternative, people found you?
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Were you following a trend?
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And you have this history of being on brands and starting categories, so you kind of know
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how that works.
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How do you feel about this non-alcoholic trend?
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Why is it growing?
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Why are people into it all of a sudden?
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Yeah, I mean, non-alcoholic beer has been around for decades.
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It's not new by any means, but I think Athletic Brewing renewed interest among consumers
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in the category.
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So where it's been previously, you know, relatively dusty, maybe something you're embarrassed
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about, you would hide the label or, you know, it's not something people gravitated towards
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or thought was something that was a fit for them.
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Athletic Brewing really shifted the dynamic and made it something that you could be proud
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of that was a lifestyle status symbol, perhaps, and really tapped into the energy that craft
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beer has and revitalized the category.
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You know, it's interesting you should say that because it's true, non-alcoholic beer
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has been around for a long time.
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I remember, and my kids are way old now, but when I was pregnant, you had to drink non-alcoholic
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beer.
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And there was a brand called O'Doul's or something, and everybody knew it was like
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not real beer.
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And it definitely was not a status symbol to drink that beer.
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So it has been around for a long time.
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It just didn't have the cool perception, which I agree, Athletic Brew, which has all different
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kinds.
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There's not just one kind of Athletic Brew, there's these IPA or lager or it's a cool
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brand to drink.
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Yeah.
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And not only that, it actually tastes good.
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Yeah.
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I would argue that you could put our Run Wild IPA up against an alcoholic IPA and probably
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not know the difference.
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We get that feedback a lot, just anecdotally from consumers.
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We brew a variety of styles and because of our proprietary process, we're able to retain
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the mouthfeel and flavor and all the characteristics that you love about craft beer and just never
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brew above 0.5%.
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So we stay under the legal limit of alcohol.
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And to be clear, like 0.5% ABV is a level in which you could probably find in orange
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juice.
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That's incredible.
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It's certainly in Barber's orange juice in the morning.
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You won't feel the effects.
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But in our process, like I said, we have a proprietary process that follows the traditional
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craft brewing process.
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And so we get that craft beer flavor.
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There's just no alcohol.
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I love this.
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Thank you for sort of providing this initial context for us, Rosalie.
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I want to step back because I fancy myself a marketing historian and I want to give some
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context.
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I don't know.
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Do I have to add that to your introduction now?
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Yes.
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I'm just making up labels as I go.
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It's all about personal branding.
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But here's what's interesting.
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So I'm not going to name a competitor, but there's a famous competitor that is kind of
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known to be like, quote, the healthy beer.
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And it's a brand that I talk about in my class, Rosalie.
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And what's interesting when we think about this is the insight there was that people
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wanted to enjoy the social utility of enjoying their beer, but also see themselves as doing
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something good and healthy.
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And this particular beer sort of started positioning itself around, hey, listen, we've got like,
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you know, 95 calories and 26 grams of carbs and it's really good for you and all this
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kind of stuff.
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And the class and I look at this and we say, like, well, yeah, the the sort of nutritional
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elements of this beer are identical, actually, to the other competitors.
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But they're positioning themselves as, quote, the healthy beer.
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And we discuss it in that context.
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And we sort of then pivot to you guys to say, at some point, customers said, well, listen,
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alcohol is a toxin, actually, and it's vestigial, which means it has no biochemical purpose
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in the body whatsoever.
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So wouldn't it be nice to sort of gateway to like actually healthy beer?
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And I think that's what you guys sort of deliver on, which like the actual promise of this
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is actually good for you, but it also tastes really good.
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And there's an because, you know, athletic beer, it's like, wow, that blows your mind.
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So talk, talk about that evolution historically as the to Barbara's point, as the category
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is evolving and forming.
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Yeah, I mean, so I do think if you look at seltzers as a category, a lot of that was
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driven by the functional benefits, like 100 calories, right?
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And flavor, flavor, flavor.
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So and even insider with my previous experience, a lot of the conversation was around the
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sugar content of the drink.
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So I do think there's been health trends in consumers that make sense and like definitely
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sets the stage for non-alcoholic beer to be, you know, positively received.
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And I think that's true.
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And but at the end of the day, too, it's all about taste, beer lovers.
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And I think where athletic is perfectly positioned is we aren't on a soapbox trying to
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tell you how to live your life or that you should be healthier.
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That's not the approach we're taking.
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It's more if you want a beer, athletic will fit and whatever occasion that may be for
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you. Athletic is always going to be a good choice, whether it's because you have
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something you want to do the next day or you have athletic pursuits, you are a high
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performer and you just don't want to compromise on your performance.
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Is that is the brand name athletic supposed to be athletic?
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Like, I mean, well, so my my take on the brand name, because I wasn't there when it
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was named.
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But first and foremost, I think your guys's reaction to it is exactly what we were going
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for. It's kind of an oxymoron.
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It's very unexpected for beer.
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Athletic is, you know, the traditionally never been paired with beer drinkers.
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So it definitely stops people in their tracks and makes them think differently and
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wonder. But also beyond that, we are trying to move away from what was a dusty
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category that nobody related to.
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So athletic felt aspirational, something that a lot of people could look to and be.
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Yeah, I see myself in that.
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Yeah. And that transforms it into this is a beer for me.
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This is a brand for me.
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Let me ask you something, because we had a while ago someone else from on our show who
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did a non-alcoholic beverage that had alcoholic also.
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You just have non-alcoholic, correct?
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But some of these like Heineken, one of your old brands, will have alcohol, beer and
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non-alcoholic beer.
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And so I can't remember exactly who it was, but somebody was on the show who was in that
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situation, an alcoholic and non-alcoholic.
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And they were very specific in saying that they were going after people who were only
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drinking non-alcoholic, but they were also going after people who were drinking
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alcoholic sometimes and non-alcoholic other times.
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And they saw both of them as their target segment.
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How do you feel about that?
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Is your segment predominantly people who don't drink alcohol or are you looking at
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people who drink both and want it for one reason or another?
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Yeah, our target is people who drink beer.
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And if they're drinking alcoholic beer, we believe that they would enjoy athletic
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brewing. We're giving them more opportunities to enjoy that taste that they love.
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I also think by going after people who don't drink alcohol, it's very exclusionary.
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And I really strive to make sure the brand remains inclusive and is appropriate for
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sociability. You want to be drinking it so that you're able to fit into any occasion.
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And if you just want to participate, but just not have alcohol for whatever reason
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that is, athletic is that choice.
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I personally think that's a good choice because when I drink athletic beer, which I
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do, I like to feel like it's a beer.
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I don't like to feel like it's a non-alcoholic beer.
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I want to be part of the party.
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I may not be drinking alcohol now, but I'm still part of everybody drinking beer, you
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know, and I like that idea.
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I also totally agree with you just spontaneously.
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It does taste like beer.
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I think. And so if you're marketing it on the taste, that really appeals to me as well.
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I think that is a different kind of positioning, Americas, than what you were
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suggesting. You know, it's part of the party, part of the taste.
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And I don't want it to be that I'm like a healthy person.
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I want to be just fair.
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That's fair. So you're going to reject the athletic part.
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And just stay with the social.
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Here's something interesting for both of you.
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I'm going to do an equals two here.
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Really good question.
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We believe in like large numbers.
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Large samples. What are thoughts about?
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Because when you I'm just trying to conceptualize Barbara and Rosalie beer, like
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what is beer like?
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Do I need alcohol to be in it for it to be beer as as non-alcoholic beer sort of
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becomes more and more of a high growth category?
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Like are we are we trying to get rid of the alcohol at some point or like what is
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it? How does this play in the psychology of consumers and thinking about thinking
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about this? Add something to what you're saying, Rosalie, so you can direct both our
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questions more efficiently.
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So what he's asking you is on beer.
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And I'm thinking this is the way I think about it personally, because I am a big
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drinker of yours. And I've thought about this as well, is I think of it as a occasion
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drink, not just a drink that like I want beer, then I'm going to go for this or
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that based on taste and brand, et cetera.
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But like if I'm at a party or everybody's going up to the to the, you know, to the
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bartender to get a drink before things get moving, I want to have a drink that I can
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get to that's legitimate in that area.
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So it's not necessarily beer the way you're suggesting Americans.
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And you can comment on which one of the way we're positioning this.
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You think it makes sense.
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But I think of it as a social drink, like the alcohol category sets up a certain kind of
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expectation. And if I'm not drinking alcohol, I don't want to miss out on that
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occasion. And that's the way I think of it, which I think is a little bit different
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Americans than what you're saying.
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And I'm curious, Rosalie, what actually you think of beer when you're drinking it?
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I agree with both of you.
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So beer has been around for centuries.
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It's always been a connection point for people, for humans.
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People drank beer before water was purified.
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Like it's always been around.
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And it's very much a social drink like that.
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It's supposed to be fun.
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Beer is supposed to be fun.
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And it's something you drink when you're at a special occasion with friends, enjoying
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something like sports on TV or at a bar.
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And so I do think it's meant to be very social.
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And that's why when I was speaking about, are we going after beer drinkers or people
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who don't drink alcohol?
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I go after the beer drinker segment because it's about being included.
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You want to be able to participate whether or not you're drinking alcohol because it's
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awkward to cheers with a glass of water.
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I violated that on many occasions, I did not know that America is to your point, though.
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Like, I do think it's important to also acknowledge like customer segmentation.
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There is different motivations for different groups of people.
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And we we do have some data on our on our target audiences that segments them by their.
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What are their motivations?
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What are their emotional needs?
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And how does our brand uniquely address them?
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And so we do shift our communication strategy depending on who we're trying to talk to.
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As long as it all ladders up to our brand positioning and ultimately ultimately just
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makes a distinctive brand statement that separates us from the competition.
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It's the right message.
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You know, so what your differentiation against other non because almost all companies
00:16:07
have now come out with non-alcoholic versions.
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So how do you position yourself compared to you're all a Heineken zero zero or?
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Yeah, well, for us, especially at the beginning of the category, you know, being up against
00:16:23
a brand like Heineken, these are established brands.
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We're very much the underdog when we're thinking about Heineken, Budweiser, whatever.
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So for us, we carved out this message of authenticity.
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We brew our own beer at wholly owned facilities in Connecticut and San Diego.
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We have built these breweries from scratch and we control the quality process and we
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have our own brewing process that really retains that craft flavor.
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The big brands don't do that.
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They don't. There's a lot of different methods to produce non-alcoholic beer.
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Ours, no one does it quite like us.
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Interesting.
00:17:01
That is interesting.
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You look at other brands that have come into the category since we started.
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It's a lot of me too.
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There's a lot of people that are taking elements of our playbook and trying to
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activate it. So I'm my goal in my role is to keep looking forward, keep thinking about
00:17:20
how to push it forward, recruit new drinkers, bring more people in.
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I'm not worried about the infighting within the category.
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I'm just trying to continue to say, hey, how can I convince the next consumer that I
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thought it is for them and they don't need to feel like that's a great beer, but it's
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for my sober friend.
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Like, I don't I like it.
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It's not for me.
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I want to break that.
00:17:44
Yeah, that is interesting.
00:17:46
Let me ask you this. Sorry, Rosa.
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Let me ask you this as well, because I want to get Barbara is always telling me
00:17:51
America's. You always have to ask about competition because you need to learn more
00:17:55
about competition.
00:17:56
Rosalie, do you see these brands of CBD drinks, let's say, as competition?
00:18:04
Because one of the things one of the things that they argue is that alcohol is bad for
00:18:08
you, but this other stuff kind of gives you this happiness effect.
00:18:12
Is that part is that is that part of the competitive matrix?
00:18:16
Yeah, I mean, 49 percent of Americans are trying to drink less alcohol in twenty
00:18:21
twenty five. That status from.
00:18:23
So we know people are looking for alternatives.
00:18:26
Non-alcoholic beer is one of those alternatives.
00:18:29
Of course, I don't like to think of us as an alternative.
00:18:33
I think we're a choice.
00:18:34
But if you look, yeah, we're up against anything that doesn't have alcohol.
00:18:39
There's so many categories that exist right now that play off of flavor, play off of
00:18:44
functional benefits, play off of other, you know.
00:18:49
Effects, and so.
00:18:52
I do think to an extent we are competing against them, yes, but it's the it's more
00:18:58
about the mind share of the consumer or the occasion in which that consumer would
00:19:02
take that that that different option.
00:19:05
Gotcha. So let's talk a little bit then about some of your new ideas and your new
00:19:10
ideas and things like that.
00:19:11
So I read that in early twenty twenty six, you launched the athletic light lime and
00:19:17
salt. That's a that's a cock.
00:19:20
Rosalie, my mouth is watering that that produced a Pavlovian response in me.
00:19:26
Barbara, just like name that flavor.
00:19:28
Holy crap. That's amazing.
00:19:29
That's an interesting idea because it's kind of like a cocktail inspired beer, you
00:19:35
know. I mean, I don't know.
00:19:36
Like when I think a lime and salt, I think a margarita is kind of before I think of
00:19:41
or maybe other beers.
00:19:43
I don't know. Well, it's funny you say that because we also launched cocktail inspired
00:19:47
beers. So we have a Paloma and a Moscow Mule.
00:19:53
So they're more of what you're describing.
00:19:55
They're emulating the cocktail flavors.
00:19:58
It's still a beer, so it's not just a RTD, but it does take inspiration from a
00:20:05
cocktail. So it's a mix of flavors.
00:20:08
But when you look at the American consumption, a lot of people enjoy lagers and
00:20:14
light beers. So light lime and salt was introduced as just another line extension of
00:20:20
that that category.
00:20:22
Interesting. Interesting.
00:20:23
How's it doing? A lot of positive reaction to it that you have.
00:20:27
Yeah, it's good.
00:20:27
Yeah, great.
00:20:29
I'm really excited for this summer.
00:20:31
I think that's going to be when we really see it take off because of just, you know,
00:20:36
summer occasions, warm weather, I think will play really, really well.
00:20:41
Interesting. Here's a here's a rapid fire question for you.
00:20:44
Yeah. I mean, because it's related a bit to what Barbara was asking about in sort of
00:20:48
this nuance of athletic beer.
00:20:51
If you were if you and the team, Rosalie, were approached by, let's say, an athletic
00:20:56
event like a marathon or something like that, and they came to you guys and said, we
00:21:01
want to partner with you guys.
00:21:02
Yeah. Would you say, no, we don't we don't want to be too athletic.
00:21:05
We don't want to get like in the super psychological space of, hey, this is the
00:21:08
athletic beer. We want to stay a bit more diffuse.
00:21:12
What would be your thought process on help me walk me through the strategic partnership
00:21:17
fit decision calculus of how you might choose to work with other brands that will help
00:21:23
amplify what it is that you that you're doing?
00:21:26
I mean, we started Bill Shufelt, the co-founder, was literally handing out beers at
00:21:34
road races in the Northeast, sampling people on the product.
00:21:39
So we really our roots are in running and races.
00:21:44
So I feel like that's always going to be a core part of the brand identity.
00:21:49
I think when people cross that finish line, they're looking to celebrate and they want
00:21:55
to they're they want that drink.
00:21:57
And why not have a non-alcoholic beer that's going to taste amazing, fit that occasion
00:22:02
without undoing all the progress that you've made?
00:22:06
So that person who who participates in a road race is a is kind of like a bullseye for
00:22:14
us. Like once you just get them to taste it, they're going to have the easiest time
00:22:20
understanding and converting to a customer.
00:22:22
So when I think about races like marathons and stuff, I am interested in those
00:22:27
partnerships because it's an opportunity to sample and get people to try the beer who we
00:22:33
think will who will definitely like it.
00:22:35
But that's not our only sponsorship approach.
00:22:40
We do a lot of work.
00:22:41
We're a partner of Live Nation.
00:22:43
So we have set ups at multiple festivals across the country.
00:22:47
We're in Live Nation venues across the country because we also are mindful of the
00:22:52
fact that not everyone is an athlete and we don't want to be exclusive to that.
00:22:58
So we we do both.
00:23:02
Interesting.
00:23:03
So you started out with this Whole Foods channel, which I think is a very good channel
00:23:08
for a lot of different reasons.
00:23:10
An interesting thing to grow that way.
00:23:13
But it's you don't exclusively sell in Whole Foods anymore.
00:23:16
So do you what is your distribution strategy for it?
00:23:19
How do you market this product?
00:23:21
Yeah, we're in all 50 states.
00:23:24
Retailers across the country, chains, independent accounts, on premise bars and
00:23:28
restaurants. We have our e-commerce.
00:23:32
We're on American Airlines now, too.
00:23:34
Like, I think.
00:23:35
Yes, we are.
00:23:36
Yeah.
00:23:37
You're on American Airlines.
00:23:39
Yes.
00:23:39
That's awesome.
00:23:40
Now, let me ask you this, Rosalie.
00:23:41
Do I get the whole can?
00:23:43
You do, you do.
00:23:45
Excellent.
00:23:46
That's awesome.
00:23:47
We also have our e-commerce platform so you can purchase online, which is a pretty
00:23:52
unique experience for beer.
00:23:54
And online we have limited variety.
00:23:58
So it's like kind of like if you were to go to our tap room, the small batch beers
00:24:02
that we would have on tap at a tap room.
00:24:04
That's what our e-commerce platform is like.
00:24:07
Oh, that's nice.
00:24:08
So how many different types of beer do you have now?
00:24:11
How big is that one?
00:24:12
Yeah, I honestly like over 20.
00:24:16
Maybe more than that.
00:24:18
I can't even keep count.
00:24:19
There's so many.
00:24:20
We release pilot batches online at a clip of like two or three a month.
00:24:25
There's I think six or seven beers in stores that you could find, not
00:24:31
counting the recent innovation.
00:24:33
So we also have athletic light lime and salt and the cocktail inspired brews.
00:24:38
We have IPAs, we have hazy IPAs, stouts, nitro just released for St.
00:24:45
Patrick's Day.
00:24:46
I mean, sours, ales, farm, like funky beers.
00:24:52
All of them.
00:24:53
You name it, you guys have it.
00:24:55
I know we've done it.
00:24:56
And we have awards for them, too.
00:24:58
That's amazing.
00:25:00
Special flavors that are only there for a certain period of time, like those
00:25:03
kind of things, too.
00:25:04
We have limited releases online, but also in store we do seasonal rotation.
00:25:09
So we'll bring, we'll rotate in styles that are appropriate for the season and
00:25:14
they'll be gone in like after a quarter.
00:25:16
Very, very cool.
00:25:17
I want to ask quickly, Rosalie, we, we often do this with our podcast guests,
00:25:22
which is to, because you guys are the gurus, we want to put you into the time
00:25:26
capsule and you to give us a bit of your wisdom and from the crystal ball in
00:25:32
terms of three years, five years, seven years in your space, like what are the
00:25:36
things that you are predicting you are seeing as perhaps, you know, things to be
00:25:42
paying attention to that you're focused on?
00:25:45
You know, what is that?
00:25:45
What is this world looking like and how is it going to like evolve into the future?
00:25:50
So I think non-alcoholic beer is only going to continue to grow because similar
00:25:56
to what I was describing about the people at the finish line, they were just easy
00:26:00
wins in some, in some respects.
00:26:02
I think the more that we invest in educating people and partnering with the
00:26:08
right partners that help shift perceptions of the category, we're just going to get
00:26:12
more and more people included into the category and, you know, being open to
00:26:18
drinking any beer.
00:26:19
So I do think that there's a lot of growth ahead of us.
00:26:24
I think one of the risks to the growth is more so risk of the beer category at
00:26:31
large.
00:26:32
You had mentioned like CBD drinks.
00:26:34
There's a lot of different ways people are choosing to, they're filtering their
00:26:39
choices for drinks.
00:26:41
And I think the beer industry at large has a marketing issue and we need to make
00:26:47
sure as younger drinking age consumers come in that they're interested in beer and
00:26:54
the beer profile, the flavors of beer.
00:26:57
That's something that I think if we don't pay attention to would hurt us in the
00:27:02
long run.
00:27:03
That's an interesting thing because you kind of have to educate people the way the
00:27:06
wine industry did, you know, on the different flavors and looking for different and all
00:27:11
those types you mentioned, like to understand what it means.
00:27:15
It's kind of an education, sophistication kind of argument.
00:27:19
And I think, sorry, go ahead.
00:27:22
No, no, I agree with what you were saying.
00:27:24
I think that you have to do that because if you don't have that, people won't
00:27:26
appreciate that.
00:27:28
And they might start thinking of you as a non-alcoholic, you know, it might might as
00:27:32
well be soda pop.
00:27:33
And you don't want that.
00:27:35
I don't think.
00:27:35
I think you want the idea that it's a special occasion.
00:27:38
It's it's a drink you drink in certain circumstances.
00:27:41
And it isn't a soda, even though it's non it's fizzy and non-alcoholic.
00:27:46
Right.
00:27:46
It's a it's a sophisticated drink.
00:27:49
And there's there's a craftsmanship involved.
00:27:52
The ingredient quality matters.
00:27:55
And there's there's multiple styles to choose from.
00:27:58
Like as I rattled off some of the ones that we make at Athletic, that that's
00:28:02
something that takes a degree of education and interest in it.
00:28:06
If we don't figure out the right way to speak to Gen Z or Gen A as they start to
00:28:12
move into drinking ages, then, you know, we're risking that volume to other
00:28:18
categories.
00:28:19
Yeah, well, you know, time flew by, but that's all we have time for today.
00:28:24
So we'd like to thank Rosalie Kennedy, who's the senior director of marketing at
00:28:28
Athletic Brewing Company for being here.
00:28:31
And if people want to know more about this category, where should they go,
00:28:34
Rosalie?
00:28:35
I suggest checking out our website, athleticbrewing.com.
00:28:39
We have a lot of information about our brand, our Chief of the Trails program,
00:28:44
which is a donation program that donates up to two million dollars per year to
00:28:49
trail restoration.
00:28:51
And we also have a huge selection of beer that you can learn more about.
00:28:55
Oh, that's cool.
00:28:56
Very cool.
00:28:56
Thank you very much for joining us.
00:28:59
And we'd like to thank our producers, Jacob Grodnick and Marissa Renna.
00:29:03
Thank you all for listening today.
00:29:05
We'll be back soon.
00:29:06
Till then, this has been Marketing Matters on the Wharton Podcast Network.
00:29:10
I'm Barbara Kahn, here with historian and brand identity theorist, America Reed.
