The rise of the 'sober-curious' consumer and movements such as Sober October and Dry January have alcohol companies weighing the benefits of moderation. Now, cannabis firms are soberly getting in on the action.
Makers of cannabis-infused beer are developing brews free of booze — as well as bud — to sell alongside stalwarts such as O'Doul's and newcomers such as Heineken 0.0 and Pabst Blue Ribbon Non-Alc.
Several cannabis beermakers, including Two Roots Brewing and Ceria Brewing, say it's a no-brainer to craft no-cannabis, no-alcohol beers. For one, they already make non-alcoholic beers as bases for their infused brews because laws prohibit them from combining alcohol and psychoactive cannabis. Non-alcoholic beer sales are also growing. Perhaps most importantly, the non-alcohol channel represents an easier path to market — and revenue — than the nascent and uniquely regulated cannabis industry.
'We do have extra capacity before we have new states,' said Michael Hayford, CEO of investment management firm Lighthouse Strategies, which founded Cannabiniers to capitalize on cannabis products including beverages.
Cannabiniers owns Two Roots in San Diego and has acquired traditional craft breweries across the United States to supplement Two Roots' efforts.
'It made sense to [utilize] the capacity into the non-alcoholic space as we work our way into California,' Hayford said.
Sales of cannabis beverages such as infused beer, cola or tea products, are growing. However, they remain quite small. During the first half of 2019, cannabis beverage sales at dispensaries in Colorado, Nevada and Washington totaled $18 million, up about 15% from the same period a year earlier.
As the market develops, other makers of cannabis-infused brews have set their sights on the non-alcohol channel. Ceria Brewing, the cannabis beer company founded by the creator of Blue Moon beer, plans to launch a non-alcoholic, non-infused line this winter. High Style Brewing, a San Diego-based maker of THC-infused beers, is exploring doing the same.
By launching the alcohol-free, non-infused Grainwave NA Belgian White Ale, Ceria is targeting longtime beer drinkers as well as cannabis consumers who like beer but want to avoid mixing the two substances, said founder Keith Villa, who founded Ceria after a 32-year career at MillerCoors, where he developed Blue Moon Belgian White.
'We decided it's worth the chance now to launch it as-is and really gauge the market,' Villa said.
It's no hard seltzer, but non-alcoholic beer -- containing no more than 0.5% alcohol by volume -- is experiencing a slight renaissance. Breweries large and small are developing low-to-no-alcohol offerings as some health-conscious consumers, especially millennials, shift away from drinking.
Total non-alcoholic beer sales are up 19% so far this year, according to Beverage Marketer's Insights, which noted that non-alcoholic brewers highlighted advantages such as direct sales over the internet.
However, non-alcoholic beer sales are a relatively nonexistent piece of overall beer sales, representing a 0.35% share of beer sales in the multi-outlet and convenience channel, according to Beverage Marketer's Insights, citing data from market research firm IRI.
'[Non-alcoholic beer] sounds good on paper, and it kind of makes sense,' said Eric Shepard, vice president and executive editor of Beer Marketer's Insights. 'It remains to be seen whether there's a real market or extensive market for it.'
At the Great American Beer Festival in Denver earlier this month, the non-alcoholic beer category returned to the largest commercial beer competition after a 13-year absence. The category was canned in 2006 for a lack of interest and participation.
Two Roots' 'Enough Said N/A' beat out 16 beers to take the gold for non-alcoholic beer.
The non-alcohol releases are part of the evolving 'beyond beer' category: brewery-developed products such as mead, seltzer, sake and kombucha that fall outside the realm of the traditional brews of malted barley, hops, yeast and water, said Julia Herz, craft beer program director for the Brewers Association, the trade association that represents small and independent brewers.
Gruvi, a new craft brewery in Denver, sought to differentiate itself by carving a niche: Developing non-alcoholic beers catering specifically to cannabis consumers. Gruvi developed non-alcoholic beers enhanced with plant-derived terpenes such as the citrusy limonene and the earthy humulene with the aim of complementing the cannabis experience.
Gruvi launched its beers on 4/20, a cannabis holiday. But Gruvi overestimated its ability to sell directly to cannabis consumers and underestimated the buying power of the traditional beer consumer.
Although Colorado boasts the nation's oldest regulated recreational cannabis industry, the state has been slow to allow for social consumption lounges and cannabis tasting rooms -- markets Gruvi was initially targeting.
The brewery's booze-free beers are sold at 150 liquor stores and restaurants in the greater Denver metro area. Sales have increased 50% each month since launch, Niki Sawni, Gruvi's founder and CEO said, declining to provide revenue of the privately held firm.
'The growth has really shocked us,' Sawni said. 'The growth was coming from that whole non-alcoholic beer category.'