December 24, 2024

denver brewing company

Courtesy: Denver Beer Company.

This story is part of CNBC’s new quarterly Cities That Succeed series, which explores cities that have transformed into business hubs with an entrepreneurial spirit that attracts capital, companies and workers.

Non-alcoholic beverage options have exploded over the past few years, a trend that’s especially evident in non-alcoholic beers in craft brewery hub Denver.

The city nestled in the Rocky Mountains has embraced the alcohol-free trend as breweries increasingly turn to more inclusive beverages in their offerings.

Non-alcoholic options on menus increased by more than 55% from the fourth quarter of 2022 to the same period in 2023, according to food service research and advisory firm Technomic.

Although non-alcoholic beers have been around since then Anheuser-Busch Technomic found that O’Doul’s, which launched in 1990, has seen explosive growth in the industry due to a recent surge in interest driven primarily by younger and more health-conscious consumers.

Analysts predict interest will continue to grow. According to alcoholic beverage insights company IWSR, sales of non-alcoholic beer are expected to grow by about 25% between 2022 and 2026.

Colorado is the state with the second-highest investment in non-alcoholic beverages in 2023, according to NielsenIQ, a database of consumer purchasing behavior.

“People are becoming more and more curious, and since Denver is a city where a lot of people are outdoors exercising and staying healthy, there’s a lot of interest in reducing alcohol intake and staying healthy,” Keith Vera, Colorado co-founder and brewmaster of Ceria Brewing Company told CNBC. “For our part, we’re starting to see more and more people become educated about alcohol-free and non-alcoholic beers and start buying our products.”

Keith Villa., Ceria Brewing Company

Ceria Brewing Company

Launched in 2018 by Villa and his wife Jodi, Ceria is entirely focused on the non-alcoholic beer market, which Villa says is “growing every day.” He added that the beer would be particularly attractive to younger consumers.

Vera said alcohol-free and non-alcoholic beers can be made by one of four methods: removing the alcohol through vacuum distillation, passing the alcohol through a series of filters, using special yeast or making a low-alcohol beer and diluting it with water. Villa said it’s difficult for breweries to produce non-alcoholic spirits because the processes are expensive and time-consuming.

But with beer consumption across the board continue to declineVera said more breweries in Denver are following the trend.

“The market is getting harder and harder for craft brewers, so to bring some money into their business they start selling non-alcoholic beers,” he said. “The demand is there, but the beer has to be brewed the right way. As long as we monitor each other and help each other, we can make sure people have good choices that are safe to consume.”

Keith and Jody Vera.

Courtesy of Ceria Brewing Company

Denver’s Beer Scene

Since Denver is a beer-centric city, the rise of non-alcoholic beers and spirits fits the city’s narrative, said food trends expert Kara Nelson.

“People (in Denver) like to play hard and celebrate,” said Nelson, who formerly lived in Denver. “In the last three to four years, there have been more and more well-made non-alcoholic beers, including from breweries in Colorado. It has become more of an option.”

Denver-based Grüvi Brewery has taken advantage of this option, offering a variety of non-alcoholic products since its founding five years ago. Co-founder Niki Sawni said the company chose Colorado as its base because of the state’s residents’ preference for healthier lifestyles and the subsequent growth potential of the alcohol-free market.

Sani said his customers in the beginning were mostly health-conscious consumers. But then, he said, alcohol-free and non-alcoholic beers became popular, attracting more mainstream customers. Nearly every bar or restaurant in the area quickly responded by adding zero-proof options, he said.

“It’s just realizing that there’s a gap in the market when you don’t want to drink – you can only choose between soda, soda or non-alcoholic drinks that are not middle ground. But still allow you to be social, Sawni said. “That’s why we chose ‘Grüvi’ – it’s meant to be fun and playful, whereas five years ago non-alcoholic products were the exact opposite. So we thought, ‘Well, how can we make something so uncool? Become popular?’ ”

Sani said that as his company has achieved success, he has also seen an encouraging trend, with large traditional alcohol breweries now offering support and collaboration in a “symbiotic relationship” without leading to any competition.

Niki and Anika Sawni, founders of Grüvi.

Courtesy: Gruvey

One of the larger breweries is Denver Beer Co., which was founded 13 years ago with a single taproom. Now, the company has several bars in the area and has begun incorporating sparkling hop water, a non-alcoholic alternative, into its menu.

“Ultimately, we are a beer company, but we also understand consumers’ desire for products that are non-alcoholic,” said Chief Executive Robert MacEachern. “In the spirit of inclusion, we want as many people as possible to enjoy our spaces, so this is a natural extension for us to allow people to enjoy our spaces.”

For Denver Beer Company, the non-alcoholic trend allows the brewery to maintain its core identity while adapting to customer tastes. MacEachern said he is particularly interested in non-alcoholic beverages for running or cycling clubs that meet in the summer and are looking for something refreshing to drink while also getting a bar experience.

While alcoholic beers will always be the company’s fundamental identity, MacEachern said hop waters have become “part of who we are.”

“Denver is the epicenter of craft beer. We have roots in this industry. The people of Denver embrace change and innovation, which makes us successful as we navigate this wave of non-alcoholic behavior,” he said. “We will continue to build our brand and brand equity – not just for us, but for all craft beer companies. Non-alcoholic beers will be complementary to us, not subtractive.”

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