Brooklyn Brewery: ‘Non-alcoholic beer is opening up a whole new base to riff off'

By Rachel Arthur contact

- Last updated on GMT

Brooklyn Brewery: Non-alcoholic beer can open up innovation potential

Related tags: NABLAB, Beer, Craft beer

Non-alcoholic beer has the potential to grab a significant chunk of the beer market, according to US craft icon Brooklyn Brewery. But that’s not all: it could signal the start of a whole new era of beer innovation – which could take off in any number of directions.

Brooklyn Brewery – which is the #12 craft brewer in the US but also has one of the strongest US craft presences internationally – launched its 0.4% ABV beer Special Effects in Europe last year. It’s now launching the brew in select US states with a full launch to follow in January.

Brooklyn Brewery CEO Eric Ottaway says its not inconceivable that the low and no alcohol category could reach 20% of the market. But mastering non-alcoholic beer is not just about selling a new product: it’s about creating a springboard for future beer innovations – such as in CBD and THC.

Special Effects: From Sweden to the US

Special Effects

'A hoppy lager with unexpected zesty aroma and pleasantly bitter finish... a bready sweetness from specialty malts, a surprising nose from dry-hopping with citrus-forward hops.'

Brooklyn Brewery researched the potential for a non-alcoholic brew back before its initial Swedish launch: and from this emerged the theme of ‘more not less’.

“The driving theme that really came back was that it’s not so much that people want to not drink any more; it’s that they want to do more,” ​explained Ottaway.

“They want to go out with their friends on Thursday night and watch the ball game, but they still want to get up and be productive on Friday. That theme kept coming forward more and more in the data.”

Brooklyn Brewery launched Special Effects in Sweden last December: followed by the UK, Italy, Norway, France, Finland and Denmark.

Despite being a US brewer, Brooklyn realised Europe was the natural launch pad for the brew, with the market being much further developed than in the US. And its been an immediate success, said Ottaway. 

“It took everybody by surprise: obviously alcohol-free beer is much more developed in Europe than in the US, but even with that, we’re more than double our original forecasts,” ​he said.

“And that’s even with a number of the markets only being a couple of months into the rollout, so it's doing extremely well.​”

Now, Ottaway sees the same trends and culture - health, wellness, and a younger generation who no longer feels it is necessary to drink to be social - arriving in the US, meaning the time is right for the US launch.

Use an existing brand - or a new brand?

For any brewery looking to diversify into non-alcoholic beer, the choice has to be made whether to create an extension of an existing brand; or a new brand altogether.

“We made a conscious decision we didn’t want to make a 0.0 version of an existing brand, but rather create a new category for us, a subset of brands,” ​said Ottaway.

And in terms of branding: “We actually made a decision to separate it a little bit from the current brand architecture, it does have a very distinct look to it.”

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Anytime, anywhere, any pattern.

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Special Effects comes in at 0.4% ABV (as per the US definition for non-alcoholic beer). “From a technical standpoint, it’s much harder to make a strictly 0.0 product when you’re trying to develop a lot of flavour," ​said Ottoway.

"Alcohol is one of the hooks that flavour components grab onto. If you have literally no alcohol in the product it’s a lot harder to hang things like hop flavours onto something because there’s nothing to grab on to. Even a trace amount makes a difference.”

Non-alcoholic beer: 5% of Brooklyn's European volumes

So how big can the alcohol-free category get? Despite being a newcomer to the Brooklyn portfolio, Special Effects looks set to account for a chunk of Brooklyn’s European volumes next year: “If everything works out the way it seems to be right now, it will be more than 5% of our total volume in Europe. And I think it has the potential to push a lot higher,” ​says Ottaway.

But predicting the potential of the sector is more difficult because there are still many consumers who have not yet encountered the category, making it hard to predict how they will react. But while Ottaway warns that growth won’t happen overnight, he is upbeat about the category’s potential.

“I don’t think we know how big it can get. The consumer doesn’t know what they don’t know yet. Until the consumer has really been given the opportunity to experience this as an option and see how it can fit it into their lifestyle, it’s hard to know what the limit is on how big it can get. It’s not hard for me to conceive of how it can be 15%, 20% of the market, at all – I don’t think that’s a stretch.”

Non-alcoholic beer as a springboard

The potential of non-alcoholic beer as a drink is clear. But Ottaway sees non-alcoholic beer not only as a product in itself: but as the base for a whole new world of beer – whichever direction that may take.

A prime example is the growing interest in cannabis beverages: “It’s pretty safe to say the Feds are never going to allow CBD or THC to be blended with alcohol. If beer is going to participate in those segments, it’s going to have to be through a non-alcoholic version,”​ he said.  

For Brooklyn Brewery, Special Effects may be the first of its non-alcoholic beers (other launches are already lined up) but it could also be the springboard for its future innovations.

“We’re obviously very, very early on in that exploration, but we think of it as opening up a whole new platform, a whole new base, off of which to riff – in any number of directions,” ​he said.

“Whether it’s functional beverages, this CBD THC world whenever that becomes legal, that’s one of the things we’re excited about: not only the product in itself as a non-alcoholic beer, but the whole other world it potentially opens the doors to.

“Whether people are going to want to participate in those segments through a beer vehicle remains to be seen – how far into the health and wellness arena can you stretch a beer – but nonetheless it opens up a whole world of health and wellness opportunities we hadn’t thought of before.” 

The full interview

Eric Ottaway was speaking to Rabobank Liquid Assets Podcast: you can listen to the full interview here.​ 

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