New St. Louis craft brewer aims to elevate nonalcoholic beer industry | Crain's St. Louis

New St. Louis craft brewer aims to elevate nonalcoholic beer industry

Whether factions of beer buyers are driven by the Dry January campaign, New Year’s resolutions to be more mindful of their health or a general desire to cut back on alcohol consumption, a new St. Louis craft brewer has positioned itself to capture them as customers.

Wellbeing Brewing Co. co-founder Jeff Stevens spent years as an executive creative director for a brand building agency, working with clients including Anheuser-Busch and Bacardi. He hasn’t had a drink since he was 24, though, and struggled to find alternatives to unappetizing options when hanging out with friends and corporate clients.

While the nonalcoholic beer market is expanding in Europe, Stevens said the U.S. market is still dominated by stale offerings that haven’t changed much in 30 years. But it wasn’t until about a year ago when he was having a conversation with colleagues in London that he was inspired to investigate the feasibility of creating a craft brewery solely devoted to NA beer.

“So, when this idea came to me, it was really a moment of, ‘Wow, I really understand both sides of this,’” Stevens said. “And it just seemed to be a powerful idea whose time has come, I believe.”

Wellbeing Brewing Co. has been sampling its first nonalcoholic craft brew — a wheat beer called Heavenly Body — around St. Louis and is set to sell it in local bars and restaurants in January. A dark amber called Hellraiser is set to follow. Both contain less than 0.5 percent alcohol by volume.

Tapping a trend

With the two brews, Wellbeing aims to tap a burgeoning trend.

Big brewers are also looking to offer more interesting low-alcohol and no-alcohol options in the face of declining sales for their flagship products.

While 40 percent of Americans who drink opt for beer as their beverage of choice, according to a recent Gallup poll, wine briefly took the top spot in the mid-2000s and liquor has been gaining ground in recent years.

Craft beer has also siphoned business from big brewers. U.S. sales of craft beer increased 6.2 percent by volume in 2016 compared with stagnant sales in the overall domestic beer market, according to the Brewers Association. The craft beer market has expanded to $23.5 billion of the $107.6 billion U.S. beer market.

In an effort to bolster its bottom line, Molson Coors Brewing has been testing new nonalcoholic beers. The company plans to roll out a product in Canada next year before introducing it in America, according to The Denver Post. Anheuser-Busch InBev, meanwhile, announced a goal of making low- and no-alcohol beer products represent 20 percent of its global beer volumes by 2025. The Budweiser brewer has also been expanding its interests in non-beer beverages, a business strategy marked by deals including its acquisition of organic energy drink maker Hiball, Ad Age reported.

A recent study from MarketInsightsReports projects the global nonalcoholic beer market will expand to $7.1 billion by the end of 2023, compared to $4.27 billion in 2016.

“In terms of the large brewers, I think they have a couple of motivations. One is that nonalcoholic is a much larger share of the market in other parts of the world — like Europe — so they may see market potential. Another is that they have been losing volume share for years, and so this may be seen as a way to stem those volume losses,” said Bart Watson, chief economist for the Brewers Association, a nonprofit trade group representing independent craft brewers.

Craft competition

As for craft brewers, competition has become a lot stiffer in recent years, with the number of craft breweries in the U.S. expanding to 5,234 in 2016 compared with 2,420 in 2012, according to the Brewers Association. In Missouri, the number of craft breweries has grown from 45 to 78 in the same time frame.

“For small and independent craft brewers, it will depend on their brand, but I wouldn’t be surprised to see the number of NA offerings go up as the number of brewers increases and brewers look for new ways to differentiate within a competitive market,” Watson said. “In addition, NA offerings may appeal to different consumer groups and so drive some additional traffic to a particular brewery.”

O’Fallon Brewery President and CEO Jim Gorczyca said he thinks palates are poised to embrace NA craft beer. So when Stevens approached him about partnering on a project, he embraced the opportunity.

Wellbeing’s Heavenly Body golden wheat is being produced at O’Fallon’s brewery in Maryland Heights. O’Fallon’s brewers are working with the Wellbeing crew to extract the alcohol from other fully fermented craft beers.

Gorczyca said they are the first craft breweries to start with fully fermented beer to produce an NA brew. Other NA beers rely on a process that stops the fermentation process early to cut alcohol content or boiling the alcohol out at high temperatures, sacrificing much of the flavor and feel of beer. By comparison, O’Fallon and Wellbeing are using a piece of machinery from a German beer equipment manufacturer that boils the alcohol out at lower temperatures and even preserves the brew’s smell.

“Although it’s a small part of the overall beer industry, the NA segment is primed for growth.  And, just as consumers have embraced craft beer, we think they will embrace more flavorful, hand-crafted NA brews,” Gorczyca said. “We have had a lot of early interest in the brew — Heavenly Body, and Hellraiser — and feel this is just the start for more exciting NA selections.”

‘Mindful drinking movement’

Stevens envisions the 68-calorie Heavenly Body wheat becoming a staple in what he calls the “mindful drinking movement,” attracting craft beer enthusiasts who would also like to have a nonalcoholic option when it’s time for a refill.

“Mindful drinking is kind of this practice of really savoring the alcohol you are consuming and really being mindful of how it’s making you feel,” Stevens said.

So far, the reception has been strong at Pop’s Blue Moon in St. Louis, where patrons have been sipping samples. Wellbeing will become a regular offering next year, said Joshua Grigaitis, founder of the event production and services firm Loyal Family.

Grigaitis, better known to many as Joshua Loyal, started his career in the bar business when he opened the venue now known as Pop’s Blue Moon with his father in 1999.

“I think there’s a lot of interest from different corners, whether it’s the pregnant woman at the bar, the recovering alcoholic, the person who is driving that night or anyone who doesn’t want to feel under the influence,” Grigaitis said.

As an industry veteran, he said he’s excited to introduce patrons to a unique nonalcoholic option.

“I am not a 100 percent non-drinker, but I find myself really enjoying a nonalcoholic beer at times when you maybe don’t need the buzz,” he said. “A beer for breakfast doesn’t have to be a bad thing anymore.”

December 13, 2017 - 12:05am