Non-alcoholic beer maker Athletic Brewing Company has received a $50 million investment from Keurig Dr Pepper (KDP) that will make the publicly-traded CPG giant a minority equity stakeholder in the business.
KDP will also receive a seat on Athletic’s board of directors. Athletic leaders declined to share the total number of board members.
“We’re thrilled to welcome Keurig Dr Pepper as an investor and strategic partner,” Athletic co-founder and CEO Bill Shufelt said in a press release. “Their team brings a tremendous amount of expertise and truly embraces our mission of brewing great-tasting non-alcoholic beers that are fit for all times. This investment will enable Athletic Brewing to further accelerate our growth across North America.”
KDP’s Athletic investment is part of a Series D investment round in which the fast-growing non-alc beer producer raised a total of $75 million.
More than 25 existing investors, including lead investors TRB Advisors and Alliance Consumer Growth (ACG), and several celebrities, such as NFL player J.J. Watt, restaurateur David Chang, tennis star Naomi Osaka, and fashion model Karlie Kloss, participated in the round.
Athletic said the $75 million investment will help the company “accelerate its growth across the U.S. and set the company up for a stable financial future as it continues to push toward profitability.”
Across five funding rounds, Athletic has now raised around $173.5 million, including a $75 million Series C round in May 2021 (led by ACG, TRB and more than 25 existing investors), a $17.5 million Series B round in 2020 (including TRB Advisors and more than 25 existing investors), a $3 million Series A round (including TRB Advisors, Tastemaker Capital, and Blake Mycoskie), and a $3 million angel round in 2017 (including more than 60 angel investors).
Speaking to Brewbound, Shufelt called the investment “the culmination of a multiyear relationship” that brought together two companies with shared values, a mutually aligned vision for non-alcoholic beer, and partners with a “communicative, collaborative and fast moving” spirit.
“It really sets up Athletic for our financial stability of the future and keeps a lot of options open on the road ahead,” he said.
Athletic considered a number of options — such as venture capital, private equity, family office, strategics, an initial public offering etc. — and decided KDP was the “best partner for our business” right now. Shufelt described Athletic as “methodical” on capital structure decisions.
During the 2021 Brewbound Live business conference, Shufelt shared that he’d like to take the company public one day. Today’s news doesn’t take an IPO off the table for the future, he said. However, he said the company is “super focused on the opportunity at hand” with “so much growth opportunity ahead” in the non-alcoholic beer segment.
Shufelt called the investment “growth capital” that will go toward investing in marketing and growing the NA beer category, as well as financial stability for Athletic’s 200-member team across the country.
“With this capital, this gives us enough to get through to profitability and have a really long-term sustainable business,” Shufelt said.
What KDP brings to the table is scale and expertise in areas such as supply chain and logistics to fast-growing but still young Athletic.
“We’re trying to get some perspectives on the road ahead as we emerge into new territory for our company,” Shufelt said.
“There’s a lot to learn in every department of our company from each other. And hopefully we have a lot of innovative, fun things to share back in the other direction,” he continued. “But I would say from Day One, this isn’t an overhaul of how we go to market or how Athletic works. It’s a supplier partnership. They’re investing in us. They love what they see in us as a supplier and leading the future of this category.”
Looking ahead, Shufelt said the roles the two companies will play in the relationship are “undefined.”
“It’s a lot of mutual respect; it’s a lot of value alignment, a lot of excitement about the future of non-alcoholic beverages. And from there, I think we’re going to build and learn together.”
Shufelt added that he views the KDP investment as another bold move in Athletic’s history, which has included opening the first non-alcoholic brewery and taproom in the U.S. in 2017, and then opening two additional scale production facilities dedicated to NA beer production in San Diego and Connecticut.
“In this, we’ve found a partner that recognizes that boldness and believes in that future like we do.”
Athletic has historically inched close to profitability but commissioning new breweries on both coasts has slowed that climb. Nevertheless, Shufelt said he expects the company to be profitable in about 12 months.
“Had we not brought on a huge brewery on the East Coast, we’d probably be there already,” he said.
In 2021, Athletic ranked as the 27th largest Brewers Association-defined craft brewery by volume, producing 104,000 barrels, a 177% year-over-year increase. Athletic reached the 100,000-barrel milestone in Year Four, growing from 875 barrels in 2018, to 7,500 barrels in 2019, and then 37,500 barrels in 2020.
With the additional capacity coming online with its bicoastal production facilities, the most recent fall resets marked the first time that Athletic was comfortable opening additional states (it’s now national) and taking on some large-scale retail partners for fear it wouldn’t be able to properly service those accounts, Shufelt said.
“This fall reset period was a big period, and next spring will be even bigger, as a lot of national retailers overhaul their non-alcoholic beer sets,” he said.
This year, Athletic has expanded its presence in Walmart stores, while adding major retailers such as Costco, Publix, Target and CVS.
Athletic surpassed its 2021 production numbers in August, setting up the company for another year of outsized gains, Shufelt said.
Year-to-date through October 1, Athletic has increased off-premise dollar sales nearly $17 million, to $32.225 million (+109.6%), according to NielsenIQ data. Athletic is now the third largest non-alcoholic beer brand, trailing Heineken 0.0 and Budweiser Zero.