SAVE THE DATE!

Is NA beer approaching a tipping point? Tho still just around 1% of total US beer volume, plenty of winds at the back of one of beer's brightest spots in a soft market. Distribs may be beginning to embrace the segment as a more meaningful piece of their biz. And while we've heard heady predictions from suppliers before, yesterday Evercore ISI's Robert Ottenstein published a report stating that "we expect a steady build to at least 5% share of the beer category in the US," and "it would not shock us if the share well exceeded 5% at some point." "We believe that NA beer is one of the most vibrant and attractive sectors" in adult US bevs and "certainly in the beer segment," Robert wrote in perhaps the most full-throated support we've seen from a Wall St analyst thus far. The sector is accretive to industry sales, brings beer into new occasions at above avg margins, profits "everyone in the ecosystem," fits health & wellness trends and over-indexes with women vs mainstream beer, he added. "Importantly, growth looks measured, organic, and not hyped up as characterized in the boom/bust of Hard Seltzers." Report was published in wake of a panel Evercore hosted with Athletic Brewing co-founder & ceo Bill Shufelt, Bero ceo John Herman and ThirstWell founder & ceo Brandy Rand, which "underscored our optimism in the category."Growth ain't guaranteed, of course. But Robert eventually sees 5 share as reasonable, particularly if new entrants like Mich Ultra Zero and Corona Cero prove durable alongside "impressive entries from Guinness, Heineken, Blue Moon, and Sam Adams." To drive "well over 5% share," however, "we suspect we also need powerful brand building by new to the world brands like BERO, which is off to a great start." Then too, Robert believes "big CSD companies" will "get involved given the importance of portfolio diversification and fulfilling all consumer needs." Tho KDP already invested in Athletic, that could mark a new kind of convergence.Global NA Beer Growth to be Led by US; Current US Mkt Between $1.3-1.5 Bil, Sez Bill Global NA beer mkt is approaching $10 bil and projected to grow $4 bil by 2028 on back of robust US growth, according to Brandy. Bill estimated total US non-alc beer mkt at $1.3-$1.5 bil currently. (Retail sales at $823 mil in 2024, per report, and Circana MULC tracked at $471 mil for full yr.) But the US alone reportedly added 37 mil new adult NA drinkers last yr as the "population of no-alc consumers in the US doubled between 1H23 and 1H24, led by non-alc beer usage." Beer still about 90% of adult NA bev volumes domestically with ~70% of NA beer priced "premium+."Athletic Likely #2 Bbl Gainer in All of Beer; at 275 Beer Distribs with "Barbell" Curve Athletic "led the way" on brand building to become the #1 NA growth co and beer supplier. But more impressive, it was likely the 2d largest bbl gainer among all US beer cos in 2024 behind only STZ, as our flagship newsletter Beer Marketer's INSIGHTS wrote last wk. Athletic grew ~45% to 375K bbls, we estimate. Co's now up to 275 beer distribs with a curve shaped like a "barbell," at "30-50% share of the category in some channels but others with only 0-5%," per report. But while distribution "has been a challenge" for the segment more broadly, Robert notes that "with consumption of traditional beer falling, trucks need higher velocity products and the incrementality that comes with NA beer."Bero Snagged Top NA Beer Spot on Amazon and in Target; 30 States by End of Mar; 55/45 Male Female Split Both Athletic and Bero have about a 55/45 split between male and female consumers as well as core consumers in their mid-20s to mid-40s. (Athletic closer to 50/50 at 47% female with gap tightening.) Bero started out strong by nabbing the "#1 share of NA on Amazon and in Target, including a top-10 share position at Target for beer overall" with help from 1400 endcaps there, according to the report. It's currently sold in 12 states and aims to be in 30 by end of Q1. Amazon could be "crucial to the brand's success and for that of NA overall," report posits, given lack of DTC restrictions. But like Athletic and others, Bero sees strong potential on-prem among other channels. It's garnered over 3.6 bil social media impressions to date.

Steady NA Beer Build to "At Least" 5 Share of Category; Could Well Exceed at Some Point, Sez Robert

Publishing Info