Bill Shufelt and John Walker are making nonalcoholic beers tasty enough to please the biggest suds snobs. And with a nearly $500 million valuation, investors are intoxicated.Bill Shufelt, the cofounder and CEO of Athletic Brewing, grabs a yellow can of golden ale off the humming conveyor belt in his new 150,000-square-foot Milford, Connecticut, brewery and cracks it open. It’s 10 a.m.—but there’s no need for an intervention.
Still, that’s a heady valuation of about eight times revenue in an industry where low single digits are the norm. Although the sober sector is small beer, accounting for just 0.33% of the $100 billion U.S. suds market, industry bigwigs think that share could grow fast. Anheuser-Busch InBev, the $57.3 billion brewing behemoth, has stated it aims for nonalcoholic and low-alcohol beer to be at least 20% of its global beer sales by 2025.
Shufelt grew up in the Wall Street stronghold of Darien, Connecticut, and played football at Middlebury College. “I sleepwalked my way into a financial career,” he says. “I never intended to be an entrepreneur.” In 2005, he graduated with an economics degree and traded health care stocks at Knight Capital in Jersey City. He later became a Chartered Financial Analyst and scored a job at billionaire Steve Cohen’s hedge fund, Point72. It was both stressful and social.
The stock sells for a bargain seven times 2023 earnings estimate and has far more cash on hand than debt.Brewers traditionally make nonalcoholic beer by cooking or filtering standard brews, a process that removes the alcohol—and most of the flavor. Shufelt and Walker had a different idea: Tweak the grains, sugars, temperature and pH levels to brew a beer with big flavor and little alcohol from the start.
Traditional craft brands including Samuel Adams, Lagunitas and Brooklyn Brewery have since jumped on the alcohol-free wagon. But Athletic has held firm, accounting for roughly 20% of all U.S. nonalcoholic beer sales in 2022. Previously unable to make enough beer to meet demand, Shufelt has poured his venture cash into two breweries that will soon be able to make 650,000 barrels a year. Most revenue comes from grocery and liquor stores, including megachains Whole Foods and TotalWine.
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