And we’re rolling on the Gear Junkie podcast with Bill Schufelt, CEO, co-founder of Athletic Brewing. Sir, welcome to the podcast. Thank you for joining us.

Bill @ Athletic (00:39.294)
Thank you so much for having me on. Excited to be here.

Adam (00:41.783)
I’ve been looking forward to this since I woke up this morning. No better way to start this podcast. And with that sound right there and I can do it because we’re talking to any beer today.

Bill @ Athletic (00:46.965)
I love it.

Bill @ Athletic (00:52.21)
I love it. Well, so excited to be here and huge fans of what you guys do. So thank you for having me on.

Adam (00:57.259)
Oh, believe me, I’m a huge fan of what you guys do. Um, so it’s a little unorthodox and I told Luke this, uh, my producer ahead of time, but I got to start this podcast with an apology. Um, and open apology to you, uh, because I recall, uh, 2018, maybe 2019. Um, I was pitched and you understand I receive hundreds of pitches in a month, but I was pitched on NA beer athletic brewing.

Bill @ Athletic (01:00.631)
Thank you.

Adam (01:27.755)
And it was a well-known outdoor PR outfit was pitching me like, you got to try this is the next big thing. And I, I didn’t see it. I was like, I don’t know if any beer is, is really going to fit for a story. And if this is really going to turn into a thing, uh, and I’m happy for you to say, I was wrong. I did not see it. And, and, you know, before 2020 going into 2020.

I did not understand the sort of no alcohol, especially non-alcoholic beer boom that was about to happen. How did you know that was going to happen?

Bill @ Athletic (02:07.254)
Well, I don’t think anyone would blame you because at the time it was crazy and it was ironic and it was an oxymoron and all the above. Non-alcoholic beer was the most boring, dusty part of the grocery store or bar or anywhere there is. The adult beverage industry made it really hard to love non-alcoholic drinks. There’d been no product innovation, no marketing support, no efforts, no celebrities or anything like that. And…

It’s funny, I just knew it in my own life. I, you know, there’s so many functional ingredients out there from energy drinks to whatever, and alcohol at the end of the day is a functional ingredient. And, you know, I wanted to be in all those places, all those times without having to deal with the side effects of that functional ingredient, whether that’s health or lost productivity or an ongoing distraction, tough to move around, tough to sleep, tough to work the next day, dietary.

Um, and I was just living this busy modern life. I was working with the world’s base had funds. I was at the seat 6am to 6pm outside of that. I was working out in the morning. I was going out to work dinners and things with friends and family multiple nights a week. And I wanted to live that whole full modern performance driven life without the functional ingredient of alcohol. And it was amazing how hard that was to get done.

Adam (03:34.955)
So how did you go from guy with an idea? I got lots of ideas. Like there’s a million things I would bring into reality if I could, but what was the, how did this go from just being one of those ideas, you’re like, gosh, I wish somebody would do this into the thing that you could really pursue?

Bill @ Athletic (03:40.811)
Yeah.

Bill @ Athletic (03:53.09)
Yeah, I don’t want to sound unoriginal or boring, but, you know, I’d kind of sleptwalk into a financial career direction. I had never imagined work being something that I could love and actually have purpose in. I thought everyone just chose a job and did a job. And I thought everyone under the sun hated their job and lived for what happens outside of their job. And

I didn’t have any ideas. I didn’t have any entrepreneurial desires whatsoever. I didn’t have any inkling of wanting to be a founder or create anything my whole life until this one thing started as a small idea, then a pain point, and then it just kept growing. And the snowball just kept growing every time I thought about it.

It drove me crazy. And like every interaction at a bar or a restaurant or wedding or bachelor party or anything, I was like, man, I love being here. I just don’t love the social stigma of not having good drinks. And there’s also the huge health impact alcohol is in society. And health isn’t necessarily the right word. It’s like alcohol is a big part of society, not necessarily productive part of society. And there’s all sorts of stats out there about

You know, 14.8 million Americans suffer from alcohol use disorder. Alcohol is responsible for one out of every five deaths under the age of 50. It affects sleep and affects relationships. 70% of people incarcerated were under the influence of something when they commit their crimes. And so there’s like, it was, so I had this idea of a product the world really needed, but then I didn’t realize how big an impact that I could actually have if I created that.

And it was once I connected, not just the economics, I was in a fine economic opportunity at my old job, but the impact that could have on tens of millions of lives and the way the world drinks and the ripple effects of that, that was the moment I could no longer turn it off and could no longer stop thinking about it. And I knew if I didn’t do it, that would be something as I turned 50, 60, 70, I would be thinking about the rest of my life and regretting not doing. And so I’d say I really quit my job for the impact I could have on the world.

Adam (06:13.367)
Was there a moment though where, I mean, you’re talking about these increasing pain points of running into it and kept, you know, it went from this to this, to this, but was there a moment you remember where you really kind of had to go for it or not go for it or put something in to be like, all right, I’m actually going to see if I can make this work.

Bill @ Athletic (06:33.45)
Yes, so I’d been working on the business plan for two years. Um, and my wife had helped me realize that I had an idea in the first place. We were on vacation when we started talking about all this. And then two years later, I’d done a ton of business planning. I’d read every brewing textbook out there and I had this great plan. And my wife basically sat me down at dinner and said, I don’t want to know you in 10 years, if you’ve done absolutely nothing with this and we just keep talking about it and.

She basically said, I don’t care how lean our budgets get, I want you to walk in and quit your job in three days. Yeah, so it was like December 28th of 2016. And she was like, it was actually January 2nd, but she was like, I want you to walk in on the second and quit. And like being an entrepreneur and having an idea and starting a small business is hard enough, it’s impossible without household buy-in.

Adam (07:06.945)
Wow.

Bill @ Athletic (07:30.27)
And having that push and the buy-in from her right from the start has been so helpful. And she’s been a great advisor and partner and critic and everything all along the way. And so really strong household support, I would say, was a huge turning point.

Adam (07:49.531)
How much did you know about beer at that point specifically?

Bill @ Athletic (07:54.95)
I thought a lot. I drank millions of cans of beer, not millions, but I thought I knew a lot. I had never brewed a batch of beer. I knew nothing about distribution for the most part. I knew. And so I basically quit my old very good job with a zero knowledge base and started building from scratch and just entered a world of rejection. Like absolutely no one in the beer or CPG world wanted to hear anything about this idea.

Adam (07:59.524)
Yeah.

Bill @ Athletic (08:22.998)
there is less than zero excitement. And so little in fact, we couldn’t enter a traditional contract manufacturing relationship. We really had to build everything at Athletic Brewing from scratch. Like we built the first non-alcoholic production facility in the country. And yeah, it was about five months after I quit my job that I teamed up with our incredible co-founder John Walker who he brought to the table.

just a world of beer and brewing experience. And so he’s basically overseen the expansion and growth of all of our facilities over the last few years. And I don’t want to pretend either of us really knew much about anything. And he was a brewing expert for sure, but we’ve learned about this whole world inch by inch and we’ve been on our own learning journeys for sure.

Adam (09:15.663)
How much of athletic success and the boom of the NA beer market that followed it is due to the product? And then how much of it is due to the story and identifying the right market to push that

Bill @ Athletic (09:36.462)
Yeah, and I think it’s still probably way too early to call success for sure. It’s, you know, we’ve been working really hard and building brick by brick and for sure made a ton of progress. Non-alcoholic beer has gone from about 0.3% of the beer world to 1.4% of the beer world or so. Sales have grown from maybe 80 million to just over a billion in the non-alcoholic

Bill @ Athletic (10:05.342)
There’s been a lot of progress for sure, but distribution, availability, and awareness is still super low in this category, and we’re just getting going. Conversely, the way I frame it is, you know, people are not drinking alcohol 99% of the time they’re awake, but beverage alcohol options speak to that 1% only for the most part. Yeah, but no, that’s actually like an actual…

Adam (10:27.003)
Speak for yourself, Bill. Ha ha.

Bill @ Athletic (10:33.426)
I forget the government agency, but I’ve actually looked up that stat. It’s like a bureau, like a census bureau stat or like a labor bureau stat. Um, so it’s like 99.3% of the time people are not drinking alcohol when they’re awake. And why is the beverage alcohol industry not talking to the, you know, 99.3% of available occasions and adults and need States. And we just wanted to put great options in there. And so. Yes, we’ve had success in.

getting the ball rolling, but I think the future of the category and like really the social acceptance, getting over the stigmas and everything is the rest of the way. And that was the longest way ever of answering. I think it’s equally as much product as marketing and social acceptance and awareness.

Adam (11:20.111)
So do you feel like there was in the pre-athletic brewing reality? Do you think there was as much demand as there is now? Because I kind of feel like you’ve created through product and storytelling, I think you’ve kind of created a market that I don’t think was there beforehand. Am I right or am I maybe wrong?

Bill @ Athletic (11:45.766)
We’ve definitely helped connect the dots for people. There are definitely people like me looking for options who had just come to accept it was a neglected market and there may never be good options. And that’s a certain percentage of people, but I would say most we’ve had to help connect the dots. And in that, you know, there’s such heavy ingrained stigmas in this category. Non-alcoholic beer got its start in prohibition. So.

And in that it was clearly defined as a, well, we can’t have this amazing thing we used to have. So this lesser than product is taking its place. And there was almost no technological development of non-alcoholic beer from like 1930 to 2015. It was like, I’m sure if you compared the options, they wouldn’t be that much different. And like the marketing wouldn’t be that much different. And therefore the societal perception of making that choice was nearly impossible.

And that’s why, for example, like the term like alcoholic and recovering alcoholic in this country is so stigmatized, but like a lot of people don’t drink any alcohol at all and make that choice for a lot of different reasons. And tons of people struggle with not only alcohol, but like all kinds of food, eating too much of everything, eating too much of this, drugs, this, I mean, and.

but with alcohol, it got so stigmatized in particular, even though tens of millions of people are documented alcoholics. And so the stigmas were so big around this category that there was a lot of friction towards people opting into making this choice. And so we tried to tackle that with nice branding on the cans, outdoor imagery, positive things, a very positive brand name that was universally recognizable.

And then sampling face to face. So, you know, not necessarily telling people it was non-alcoholic all the time, just like letting them taste a great beer and then sharing it’s non-alcoholic and being like, oh, this great beer you’re enjoying in this moment right now. Actually, you can have this moment with your friends, with your family, and then get on with whatever you’re going to do the rest of the day. And kind of sampling and challenging people time after time, it’s out by the thousands to like try a six pack, try a can and just put it in your fridge at home.

Bill @ Athletic (14:06.258)
and you’ll be shocked how often you go for it. So it was like really like slowly gained territory. It wasn’t like an enormous hockey stick, but then we started to get some really passionate, like most organic fans and people like JJ Watt, David Chang, Carly Klaus have really helped us break down some of those stigmas as well.

Adam (14:28.747)
I can only speak from the gear junkie perspective, but it looked like you were going after that active outdoor segment early. But was that where you first started to see purchase and success and get traction moving athletic forward? Or was there like a different demographic where you’re like, these were the first early adopters?

Bill @ Athletic (14:52.33)
Oh, I mean, that’s just me. I am like the perfect consumer of your content. I love every single type of, yeah, sport and outdoor vertical. And, you know, if I had five more hours of the day, I would spend five more hours outside or playing sports or exercising and trying to do mindful things. And so a lot of the early brand marketing was just authentically out of my lifestyle.

Adam (14:58.935)
Oh, well, thank you. That’s great.

Bill @ Athletic (15:19.506)
I would go to races I knew about where there would be hundreds of thirsty, happy, sweaty people and I’d hand out hundreds of beers. Whether that’s Spartan races, local 5Ks, local half marathons, and I just kept expanding out from there, all the way up to ultra marathons I was running. I probably ran 70% of the races. I sampled that for the first couple of years. And then as we built the sales team then…

We kind of found what events worked well to sample that stuff. I kind of let a lot of our salespeople like build their own community in their own States too, like what did they like doing? And some would like doing more like run club type stuff and some would like doing more charitable type stuff. And so the brands definitely took on like different fingers and appearances as more people got involved with it. But I’d say, I’d say those original years were like directly out of my personality and interests.

Adam (16:19.215)
What was the NAB beer demographic you saw when you were first starting? And what is the NAB beer demographic you know now?

Bill @ Athletic (16:28.274)
Yeah, well, it’s tough to know exactly when we started. I know it was marketed and stigmatized as like very often recovering alcoholics or people who have lapsed out of alcohol or aged out of alcohol. We do know by demographics that non-alcoholic beer was 75% over age 45 when we entered the category. So perhaps a lot of people had slowed down their drinking for health reasons or as they’re getting older or.

had more responsibilities on their plate potentially. But it surely wasn’t marketed as a dynamic health forward Gen Z type category. And we’ve almost been able to turn that entirely on its head at this point. You know, non-alcoholic beer makes a lot of sense in the busy modern life. It’s super clean ingredient. It’s naturally very light in calories because ethanol is calorie dense. The general rule of thumb is.

20 calories per 1% alcohol as just ethanol calories. And so like the marketing lends itself naturally to busy, healthy people. And so we just had to let that get out into the world in marketing. And so it’s, and I will say also as a new generation of people comes of legal drinking age.

and goes to college or goes to bars. And if you can open up the hypothetical menu and see on one side all the alcoholic options, and now on the other side, it’s all the same name brand names plus athletic and others where there’s like actually a really thoughtful non-alcoholic drinks menu now. And people can make those substitutions or switches depending on the occasion and not have to drop off in.

social experience or quality. And it really helps if it’s big name brand names and not brands that people have never heard about.

Adam (18:29.943)
I think what surprised me most, and Luke was gracious enough to provide me a whole bunch of background information, because I don’t want to make it sound like I know all this stuff by myself. But in reading up and preparing for this interview, one of the things that really jumped out at me that resonated as true for me as well.

is those the demographic of people who drink alcohol and people who do not were very siloed in my head ahead of time you either will or you will not and if you abstain you abstain all the time but what I’ve what I’ve come to notice in my own habits is. The fluidity in just I don’t always want alcohol.

But I do sometimes, right? I don’t have to be alcohol free all the damn time. And how much of my association with a good time is just ritual. It has nothing to do with actually drinking alcohol. It’s so much the ritual of holding a beer, tasting a beer, whatever. So I’ve been personally just shocked to realize, hey, I’m somebody that wants to mix in a lot of NA beer just to extend, one, how much fun I’m having at one time, and two, how much fun I have the next morning.

Bill @ Athletic (19:36.922)
Yeah, well, I think you just nailed that on the head. Putting some numbers around that, depending on when we take surveys and slice the data, we do generally come out to about 80% of our customers do drink alcohol at other times. And it is truly what you said. It is for people who do drink or do not drink equally, it is one of the most exciting times in beer history because…

you know, starting whenever, called the 1800s maybe even, the occasions where you can comfortably consume alcohol in your life and not worry about the consequences had gone from seven days a week, five hours a day, to reducing hours, reducing the days, and like, you know, in our parents’ generation, a lot of people would get off the train and go to the bar before going home, and that was totally normal, or…

it was much more often to have alcohol every night of the week. And that’s really been narrowed down from seven days to like, from the average adult has 0.14 drinks or less per week. So I think 60% of adults have 0.14 or less drinks per week. And so like the occasion base has been so narrowed to like very specific days and times of the week. We’re permissioning everyone to like,

as you said, like grab that beer like any night of the week and feel good about it. And, you know, I get that feeling if I’m having a really stressful day at work and I can crack an IPA for the last hour while I like work at my home office, or I love having a beer every night of the week with dinner and like we have, you know, we sell 50 different beers a year. So you can get a beer that fits with exactly what cuisine you’re having. And you can do whatever you want after that too.

Like very often I’ll have a beer with dinner with my family. I’ll put my son to bed. Then I’ll work out. Then I’ll do more work and I’ll have another beer after that. And like, you know, I can do all this stuff in between rounds of beers. And in the past, if that was one even light beer, there’s no way I’m working out or likely doing more work after that. And so it’s like, it fits in so many occasions and

Bill @ Athletic (21:56.146)
We like to call it the six pack test where we just encourage people to put a six pack of our IPA in their fridge or whatever their favorite beers and we just we know that will disappear faster than almost anything else they put in their fridge.

Adam (22:11.011)
Yeah, just have them do a happiness survey the next morning. I listen for the record. I don’t want to make it out. Like I was an absolute lush, but I would, I would have wine with dinner, beer with dinner, and I just, you know, I tipped 40 and I just started noticing like my ankles hurt in the morning. Right. Which might not sound like it has anything to do with my dinner the night before, but inflammation is a real thing. And I noticed just when I would cut that out, cause it’s, it’s often seen as like maybe the culprit for a lot of things.

Bill @ Athletic (22:13.928)
Yeah.

Bill @ Athletic (22:27.043)
Mm-hmm.

Adam (22:40.087)
Just the morning experience of like waking up clear headed and feeling ready to greet the day is not an advertising. I’m like genuinely it feels a lot better and so much of it was just you know repeated ritual like it’s wine it’s got to have alcohol if it’s wine it’s got to have alcohol if it’s good beer so that’s been that’s what I think if you tap if you have people take that happiness serve it not just how good does it taste but that next morning especially as your our age it’s so worth it.

Bill @ Athletic (23:06.874)
Yeah, yeah, that’s exactly the kind of self-interest section I was doing. So I stopped drinking at age 30. I was about to get married. So I was like, that moment made me reflect like, what kind of dad do I want to be in the future? Like what do I want the rest of my career to look like? What do I want my health to look like? And, you know, I was wearing, um, I’ve had either I watch as whoop bands or both for like, as long as they’ve been available basically. And that’s like.

sometimes undeniable impact. I’m not speaking to just alcohol here. I’m just saying like the amount of health data we have at our fingertips is pretty interesting these days in terms of like being able to optimize our health and our sleep and how that affects us. And yeah, I came to a lot of the same conclusions myself.

Adam (23:55.755)
Luke, why don’t you drink?

Adam (24:11.779)
Yeah.

Adam (25:11.415)
That is the thing. If I call back to high school biology, I think it’s Pavlovian, right? Like if you good time, alcohol, good time, alcohol. And then if you just make that switch, and this thing still tastes like alcohol, you still have the good time you just removed one of those stimuli, and you’re still getting the same the same result.

Bill @ Athletic (25:11.84)
Yeah.

Bill @ Athletic (25:32.37)
Yeah, to tie a similar example, so right before I stopped drinking, probably the year before I stopped drinking, I went to a really good college friends bachelor party and probably like 15 college friends there. And I stayed up till like three in the morning drinking and hanging out with two friends I hadn’t seen in forever. And I remember hanging out on like this porch for hours and the next day

Like I remember doing it, but it wasn’t quality time for sure. I like, you know, it’s, and I was like, you know, in the whole rest of my life, the next 70 years or whatever, I might get one, maybe two chances to do that again with those guys. And I just totally wasted one of them. Um, and I was like, that is such a bummer. And since then, I’ve probably been, since I stopped drinking, I’ve probably been on at least five to 10 bachelor parties. And I’ve had so much fun. Just like.

Adam (26:16.976)
Hmm.

Bill @ Athletic (26:28.594)
eating well, like doing stupid stuff with my friends, doing all sorts of things. And like I just haven’t missed it. And to like, so the example that was like the most concrete in my life, after I stopped drinking, I went and met up with my brother at a bar in New York City one time. And super simple moment, something we used to do fairly often. And, but it wasn’t until I stopped drinking that I realized that

My favorite thing about that moment was seeing my brother cracking a beer that I enjoyed and just being in the moment together, like watching sports, talking about things, catching up and being there. And it had nothing to do with the alcohol that hits you like two hours later. And that was just such a big realization for me.

Adam (27:20.407)
You alluded earlier to some of the bigger players in the beer space beginning to take notice and dabble. Are you surprised at these bigger players taking note and investing and releasing their own products as early as they seem to have to like give rise to this? Or is this all like, were you expecting at some point the big guys are gonna jump in and I’m not surprised.

Bill @ Athletic (27:51.607)
I’m actually so excited because the big worry was going into an industry with large incumbents that somehow they were rather than participate in this new exciting part of the industry and help it grow, where it’s obviously an enormous potential revenue growth driver for the industry. This like totally new segment, all these new occasions, everything. I was worried that they were going to try to kill it rather than.

play in it. And I didn’t know what form that would take. I just know there are very few brands with a lot of market power. And I was worried about that. And it’s turned out to be great in that, they are supporting the category with marketing dollars, with name brand products, some element of their resources and awareness. And so I think of this category as very zero, or positive some.

not zero sum. So it’s, I think the tide’s gonna be coming in for a long time. Health and wellness is one of those things that you can’t really put the toothpaste back in the tube on ever. And so I’m really glad to have more entrance into the category. There’s something like 150 non-alcoholic beer brands and then at least 50 non-alcoholic spirits and cocktail brands, which…

When we started, there was like six total and they had no investment behind them. And now you have Corona Non-Alcoholics sponsoring the Olympics as the Bureau of the Olympics this summer. And I just think that’s so good for the overall category and awareness and tearing down stigmas and giving people options. So it’s, I’m thinking very positively about it. It’s way too early to talk about competition and things like that for sure.

Adam (29:41.303)
At any point, did anybody from one of those big brands give you a call and be like, what are you doing? You know, what’s, uh, what’s going on? How much to just make you just quiet down and not rock the boat here. We got a good thing going.

Bill @ Athletic (29:52.406)
Oh, no, yeah, nothing like that. Um, obviously they, it’s a super small industry and everyone knows each other. And, um, when there are exciting data points, people definitely pick up the phone to try to get involved in your business for sure, but it’s a, we’re, we’re really excited about being the leader of this category and building for the very long term for sure. So I was never interested in selling early days or anything like that. I know a lot of brands have totally different horizons and goals and stuff, but, uh,

I think we’re still in the first chapter of non-alcoholic beer.

Adam (30:26.039)
What we’ve talked about so far, I think, would give people the impression that there was this linear, linear escalator to athletic success. Is that accurate or did you guys, you guys must’ve had some speed bumps and uh-oh moments along the way, right?

Bill @ Athletic (30:43.138)
I mean, literally every day is like small businesses. And I’m glad to say our business is very stable and about like the, how tough the random everyday challenges that small businesses go through is wild. Like just new unique things come out of the woodwork every day. And I kind of just wake up knowing that like

Adam (30:46.877)
We almost go out of business every single day.

Bill @ Athletic (31:11.49)
there’s gonna be peaks and valleys in every day. If we try to do things with positive intent and transparency and, you know, as long as you don’t have to worry about like, lies you’re telling or getting your story straight or covering up holes with duct tape and, you know, we’re trying to build something for the really long term and doing it in good faith and being positive actors in the business world. And so, I feel like any challenge is tackleable, like with that kind of like long-term mindset and…

Um, you know, at the same time, a lot of the opportunists, like a lot of the opportunists who come for the gold rush or the quick hit, they’re not going to be here in three to six months. Like it is, it’s not easy. And I like that, that it’s not easy because people who aren’t really excited about building the category won’t be here for very long. Um, but yeah, we’ve had crazy things happen, um, pretty much every day. Yeah.

Adam (32:07.771)
Well, let’s get specific because as I mentioned earlier, I have show notes here that I referenced. If you don’t like this, this is Luke’s fault, not mine. But you guys had, when I was reading up on this, one of your initial orders, a big order, you guys had a massive scare right off the bat, didn’t you? Can you tell me that story?

Bill @ Athletic (32:12.05)
Yeah.

Bill @ Athletic (32:26.95)
Yeah, I mean, that was pretty existential. That was within three months of being on the market. And you know, there’s a lot of great things about growing a small business very steadily over a long time period. And athletic chose to go pretty fast in how we build our business, which, which opens you up to more risks for sure. Because you’re bridging building, manufacturing,

Adam (32:45.111)
Hehehehehehe

Bill @ Athletic (32:56.69)
optimizing for growth and quality. But if like bumps show up in that road, it’s scary financially for sure. And we had just pretty much spent our entire angel round and built the first non-alcoholic beer brewery in the country. I’d done 120 investor meetings to get that built. And we were trying to operate the business on a very shoestring budget. And we got this enormous national order for a national store chain. And…

So we had packaged up the biggest order, palates and palates. Yeah. And we were so excited about this order because it was going to give us some financial breathing room for the first time, not for very long, because we had to order a ton more inventory. But once it was all canned, palatized, more than a full truck of beer, John came to me and was like, I don’t think this is our best beer. We’re going to send this beer far from home. And I don’t want to introduce people to our beer.

Adam (33:30.115)
high-fiving each other.

Bill @ Athletic (33:56.138)
when it’s not our absolute best. And he was like, I think we should always have the policy of putting beer down the drain that’s not our absolute best. And I could tell he… Well, I could tell we didn’t know each other super well at that point. We had known each other about a year and a half, but I knew his values and how thoughtful he was and how talented he was in tasting beer too. And if he’s saying this is not our best, he had said that from day one that…

Adam (34:04.187)
Did your jaw hit the floor?

Bill @ Athletic (34:25.858)
we’re not selling a single can of beer if we’re not making great beer. And I could tell that he had sat with this difficult news to convey for at least one day. And he had made up his mind that he didn’t want to sell the beer. And I just had full trust in him that it wasn’t our best beer and we’re not gonna sell it. And so we just got to, we told the trucks to wait and that we actually canceled the trucks because it was gonna be weeks, not days.

to remake that much beer. And we just got to destroying it, forever to destroy. And yeah, and I’d immediately go to our investors then, and say, you know, a lot of the trends in our businesses are good, but we’ve hit this speed bump, and we wanna build more capacity and scale and all that. And so I did kind of like an emergency bridge round.

And the great thing about having gone through so many, so much rejection and taking our investors along for the ride, and I wrote monthly investor updates for years, and I still write investor updates at slightly longer intervals, but our investors knew exactly what was going on in the business. I’d been transparent with our challenges. I’d been transparent with what’s going well and what’s not. And our investors like got this piece of bad news. And I got letters from so many of them that were like,

Thank you for sharing. We can handle any amount of bad news. We just hate surprises or hearing about it when it’s too late. And this group of investors has been amazing in helping us build our big breweries and build the future stability of our company. And so I would say out of any moment that were those like biggest challenges came our biggest learnings and positives, I would say at the same time.

Adam (36:14.167)
I would say that investor sentiment also makes great relationship advice. Own up to your mistakes right away. Save a lot of headaches down the road.

Bill @ Athletic (36:18.76)
Yeah, for sure.

Bill @ Athletic (36:24.046)
For sure. And people love to help you solve challenges too. It’s like, people almost don’t care when things are going well. They’re like, where can we actually help? Yeah.

Adam (36:35.319)
Well, speaking of people that helped you solve challenges, John Walker is the, would you call him the mastermind, the master brewer, the Cicerone, the man who makes.

Bill @ Athletic (36:44.882)
Yeah, yeah, co-founder, yeah, head brewer, yep.

Adam (36:49.247)
So you link up with John right off the bat. Does he say, hey, Bill, I’m glad we got you got a hold of me because I got a great idea on how we do non-alcoholic beer well, or did you guys step up to a problem nobody had really adequately solved and just start? Did you find an inn somewhere that other people hadn’t seen? And how easily did that in come to you guys?

Bill @ Athletic (37:15.51)
Yeah, so I had talked to hundreds of people by the time I talked to John and like very short conversations, mostly very respectful, like people just didn’t want to work on non-alcoholic beer. And I totally get that. They didn’t see potential in it and didn’t want to work on it. And we’re like, thank you very much, but I don’t want to take up more of your time. And it was bleak for sure. And so I had taken non-alcoholic beer out of the job description by the time John had…

responded. And yeah, so it’s basically like a please don’t hang up moment. And credit to john, he just like totally saw the potential of the innovation, the challenge, the need in the world. And he saw it almost from the start. And so the second I had like a warm conversation whatsoever, I was on a plane to go to New Mexico, meet him in person and talk to him and which I think he found kind of scary.

how desperate I was for a friend at that point. And, but yeah, so I had an idea of how I wanted to make it. I had read tons of brewing textbooks and basically the kind of first principles approach was people just took this fact like you make non-alcoholic beer with this technology and then they’re off and running in that direction. And there was two main technologies and for the most part still are and

Adam (38:20.849)
Ahem.

Bill @ Athletic (38:39.562)
95% of the world’s non-alcoholic beer is made with these two methods and still is. And I basically sat down with John, I was like, this is gonna sound crazy, but I think we should just not do that. And I have this general idea, but I’d love to just home brew in a warehouse with you until we get it right. But I think the big difference is gonna be coming up with our totally own direction on how to make non-alcoholic beer. And…

It was funny, like John was just so up for that. And he moved his family, he had a one-year-old and a five-year-old across the country to Connecticut. And me and him home brewed on Gatorade jugs in an empty warehouse. I can probably find a picture in two seconds here, but we home brewed in an empty warehouse. And for the better part of a year, just hundreds of iterations, we’d fill up like five glass carboys every day, let them ferment.

see if we died after we drank it, see what it tastes like. And then we changed like one degree in one tank the next day and brew it again. One degree in one tank the next day, or we might try a totally different ingredient profile. And so it was like really an amazing time. I mean, terrifying to look back on. I mean, he had two small kids at the time too, which is crazy. But here’s, can you see that on the screen? That’s John and Gatorade jugs.

Adam (40:07.155)
Okay.

Bill @ Athletic (40:07.934)
And we did that for nine months. And then I know that’s bad radio, but picture three Gatorade jugs stacked in a row. Yeah. And barely taller than John, we’d brew three gallons at a time and separated out into 10 carboys and then change small variables every day. And when the beer starts to taste good, probably four or five months in, we’re probably like 40 to 50 trials at that point.

Adam (40:16.507)
That’s the coolest picture I’ve ever seen in my entire life.

Bill @ Athletic (40:38.326)
Um, we started hand bottling it into brown bottles and I would amass like 50 bottles and I would drive all over the state of Connecticut and talk to retailers, liquor stores. Um, and Whole Foods was our biggest breakthrough. Um, the local Whole Foods was just like, this is amazing. I think we’ve been waiting for this. You got to get to regional. And it was a very cool, like Whole Foods discovery story, but, um, yeah, it was as grassroots as it comes. And, um,

You know, we’ve had every step of the company since then has been appropriately professionalized to the next step. And, you know, now if you were to walk around either of our breweries in Connecticut, San Diego, you’d see incredibly professional teams, like totally next level laboratory teams, food safety professionals, like who’s who have brewers who’ve joined us from like the best breweries in the country, just because they want to work on this challenge and exciting area in the world. And, um, like I

told you that other story about like quality and testing our beer before it went out the door and making sure it was absolutely the best. Well now we have a 55 step beer quality test on every batch before it goes out the door. So it’s like it is the highest standards on quality before things go out our door.

Adam (41:54.811)
The the apocryphal story I think of is Coca-Cola and it’s secret recipe, right? Like nobody shares with the secret recipe. Is it is it is it a safe analogy to say athletics process is kind of the same thing? Like is it is it something unique that you guys happened on to that led to this?

Bill @ Athletic (42:17.13)
I’d say that’s what we’re going for. I’d say the brewing world is incredibly creative, just like the broader CPG world is. And I know people make things that taste very much like Coca-Cola in different ways these days, but the exact method, we think we are doing things totally different still than anyone else is doing things. And yeah, we’ve only had to kill like four or five people who found out about the process to keep it secret. So, yeah.

Adam (42:47.771)
Can you explain in a four dummies manner the way historically beer was made without, you know, that you said you suggested there were two ways 95% of all beer was done. Can you explain that in a way I might understand as to how they were doing it?

Bill @ Athletic (43:06.658)
For sure, yeah. I’d say really simply, it’s either like aggressive filtration. So, you know, running things across a lot of membranes where the ethanol that’s like, like has the different density profile just enough, it can get filtered out, which in filtration, a lot of other things also get filtered out or gets diluted or watered down. And like, if you think of how sensitive

wine and beer fermentation is. It really has so many subtle nuances that are very susceptible to being altered or destroyed. And so the other method was vacuum distillation, which is just a nice way for essentially burning off the alcohol. It pressurizes it and burns it off, but a lot more than just the ethanol burns off also. And so it was either filtration or burning off the alcohol. And…

You know, we decided that, you know, while there are a lot of good things about beer processing equipment in different ways, we’re going to forego both of those. And I’d say ours involves 10 or 12 natural steps to changes to the brewing process, changing things like time, temperature, pH, ingredient bill, and being really gentle and how we do it.

Adam (44:28.219)
Do you suspect any of the competition has in the resources they’ve invested happened upon some of the similar Eurekas you and John have had?

Bill @ Athletic (44:38.418)
Um, well, I think with the attention on the space, there’s all sorts of unique things going on. Um, people have gotten better at the existing methods and also come up with their own totally different methods. So, um, it’s moving fast. It’s a highly evolving, innovative area, which is exciting. It’s ultimately great for consumers. I mean, growing categories, a lot of innovations, a lot of name brand names is all just adds up to winning for the customers.

the overall category.

Adam (45:09.231)
Can you share either what’s in the pipeline or what is on your wishlist as far as beer styles that need a quality NA version that you guys might be able to tackle?

Bill @ Athletic (45:21.546)
Um, well, I think more than anything, and I mean, it’s gonna sound so boring is people just need availability of the existing great stuff. Um, you know, our run wild IPA is like the most highly awarded non-alcoholic beer in history. It, but it is relatively hard to get where, you know, a beer like call it McCultra is available at 99% of stores that sell beer out there. Our average beer that athletic brewing sells is available at 8% of outlets.

So it’s still like, we have a big availability challenge for sure, getting on menus, getting out into stores. And so that’s probably our biggest priority is like when people wanna drink our beer for athletic to be there. And I think the core lineup meets so many occasions, but on the innovation front, I was out on our brewing floor on Friday and-

So we’ve got really small pilot systems on both coasts where on any given day of the week, there’s some cool test going on and we don’t care if it secedes or goes down the drains or people just have fun with it. And it’s meant to be a creative outlet for our brewing team but they were making this like spiced hot chocolate beer on Friday, which it was just, I was just doing a random walk around the brewery like trying to escape from my laptop for an hour. And I was like, oh, what’s going on in the pilot system? And it’s just like.

tank that’s like barely taller than me. And they were like dumping gobs of chocolate in it. And they were like, they’re like, do you think this is like too spicy or spicy enough? And like, so one person was just dumping gobs of chocolate into the tank, which is going to be a nightmare to clean up. And then like the other was like tweaking the spice and trying to like titrate the spice next to that. And, you know, it’s, it’s really fun to have like the beers that everyone loves and like

becoming better available, but then like this innovation where we’ve probably launched over 150 beers in the life of athletic on our e-commerce platform. And in any given month, we probably launched two or three new things. And so what’ll happen next with that hot chocolate beer? If our team loves it then like in a week or two, depending on the style and the production method we use, that’ll make its way into like small testing that we share around the office. And if people are like,

Bill @ Athletic (47:45.058)
this is great, like we should launch this. We’ll whip together a label and we’ll sell it on our e-commerce platform and see what our community thinks of it. And every few months we ask our community, what beer did we launch that you’d like to see more of? And everything is kind of like crowdsourced from our community. And so popular beers we bring back more and more often and eventually the most popular on our e-commerce make it out to the real world.

Adam (48:15.335)
That’s also surprised me in reading up, but that’s like a benefit I would not have expected of being in the NA space is the is the e commerce options like the ability to do that small batch testing. Did you also at the outset, like did it did the light go on and be like, ah, and this is another thing. This is another benefit to being NA or were you pleasantly surprised like, hey, this is gonna, this could be a great way to try out low risk and launch new vetted ideas.

Bill @ Athletic (48:45.834)
Yeah, so it’s not only actually non-alcoholic beer, it’s like all of CPG. It was a big part of why I wanted to build our own facilities was this to control our process, control our quality, be able to do our own innovation, but also be able to like make changes fast and serve our customers directly. So if, imagine you are creating like whatever category CPG business.

and you go find a manufacturer for that. They have like these enormous minimum runs. And if you launch something and you realize pretty early that something’s wrong with that, it is really hard to course correct and fix that if you don’t own production. And at Athletic, like we own it and like the batches were super small. And so we could course correct and iterate so fast in our business. And of course, my cell phone was the company number. My email was the customer service. And so like I’d get…

500 to 1000 emails and phone calls a day. And like, I knew when things were either going good or bad with our customer base. And I was able to iterate that so fast and talk to them. And at times be like, oh my goodness, I’m so sorry. Like here’s a coupon for like your next six pack. Like that’s our mistake or, you know.

Yeah, there’s very relevant now because the whole country is below zero. But, um, in 2019, our first winter we’re doing e-commerce and sending out hundreds of packages a day and the mail directly, there was like a polar vortex and the whole country went down in temperature and we just had hundreds of packages of beer freeze. And so like, there’s all sorts of lessons like this that we learn every week of the year.

Adam (50:30.639)
Do you feel like you’ve now scratched that entrepreneurial itch? Or is there a chance now that you’ve launched one, seen it through, encountered those hiccups? Do you think maybe there’s a chance some part of your brain is going to be like, Bill, you know what else we could fix? We could also fix paper towels that always rip on the bottom. We could fix that, Bill.

Bill @ Athletic (50:48.76)
I

Bill @ Athletic (50:52.262)
I know I had no itch and there is no ongoing itch to scratch. It’s I just cared so deeply about one thing that is like I can’t possibly turn it off. It’s like I wake up every day thinking about I go to bed thinking about it. I think about it in the shower. I think about while I’m jogging and just totally obsessed with this one thing and having a lot of fun at it and thinking very long term. But that being said, like I.

I’ve had a lot of unexpected fun on this journey and have, unfortunately, unfortunately learned so many lessons and had so many experiences that, and I went through so much rejection also as an entrepreneur that I couldn’t get anyone’s ear. And I was so thankful for those that did talk to me that I, I talked to a lot of entrepreneurs who are just getting going and share.

whatever I can. Hopefully I’m not leading a bunch of people astray, but it’s trying to help keep people out of the ditch and share some of the lessons I’ve learned and pick up phone calls. It’s super, super exciting to talk to people who aren’t at that like so excited stage of their journey.

Adam (52:03.983)
So let’s say there is one or two entrepreneurs listening to the podcast. If you had to distill one or two nuggets based on this experience to say, Hey, take, take this wisdom that I’ve gleaned on your journey. What would it be?

Bill @ Athletic (52:19.514)
Yeah, I mean, if anyone wants to reach out directly to my email is just bill at athletic brewing.com. And it’s a but yeah, in terms of, I think making sure you’re so passionate about what you’re working on, because the entrepreneurial journey is so hard, like every inch of ground you have to cover is like 1000 just super annoying steps. And but if there’s like true passion there.

Like if you can’t stop thinking about it and if you couldn’t possibly stop, it becomes so easy. It’s like, oh, these are like fun challenges or sales becomes easy. Like I couldn’t possibly have imagined doing sales in my prior life. It would make my skin crawl if I didn’t really care about like what I was selling and I do. So it’s like super easy and fun for me to talk about and sell and like travel all over the country, meeting with distributors and retailers and stuff. So yeah.

Adam (53:17.839)
Bill, I’m a big fan and I think a lot of the listeners are as well. This was fun. Thank you, sir. Thank you for the time. Luke, did you get everything you wanted to know about athletic brewing accomplished in this podcast?

Bill @ Athletic (53:20.45)
Thank you so much.

Bill @ Athletic (53:42.288)
Yeah.

Bill @ Athletic (53:47.626)
Awesome. Yeah. Thank you so much for having me on. Yeah. And anyway, I can be helpful to you or your community. I love what you guys do. So thank you so much for having me.

Adam (53:55.383)
It would help me if you could send some spiced hot chocolate beer, and then I can help spread that gospel for you.

Bill @ Athletic (54:02.95)
Absolutely. Yeah. If you guys share an address, we, we always have such fun innovations coming out. It’s like, in both breweries, we have a three barrel system in Connecticut and in San Diego, we have small jugs and then a seven barrel system and they’re just constantly churning with fun stuff. So yeah, I’d love to send some stuff.

Bill @ Athletic (54:27.554)
Not officially. So our first brewery in Connecticut, which was 10,000 barrels where John and I did all the testing and stuff, we did have a tap room at that facility. We haven’t built the tap room at our new brewers yet. Actually, neither of them are zoned for it yet. So we’ve kind of run into challenges there. But we do hope to have tap rooms in the future and then potentially like pop up stuff around the country.

Bill @ Athletic (55:05.298)
Yeah, if you’re ever in the area, we’d love to give you a tour. So, yeah.

Adam (55:10.551)
Outstanding. Well, we’ll wrap her there. That is the gear junkie podcast and we are out. So yeah, it wasn’t too bad. Was it?

Bill @ Athletic (55:18.154)
Thank you so much. Yeah, that was really fun.