Like many a novelist before him, Marcus Sakey valued the rite and reward of savoring a cocktail while pondering plot twists, especially with his good friend and drinking buddy David Crooch. But he also knew that gin, in particular, has a bad temper, and is nobody's friend the next day. One evening, over drinks and a chess game, the pair pondered a new business plot: gin and whiskey analogs that could deliver the experience-the ritualof a mixed drink without the alcohol.
Laura Taylor was a corporate warrior, an engineer by training, who was marching along in a career with the likes of Rockwell, Accenture, IBM, and Tableau. She routinely mixed work and drinking until the drinking got to be a bit too routine. But trying to stop proved difficult, given there were few interesting nonalcoholic options. That's when she decided to make one.
Molly Fedick was the creative director at Hinge, a dating app, and enjoying the club and party scene in New York City like a proper young professional when the pandemic first shelved her social life and then her job. Relocating to Lake Tahoe, Nevada, she often gathered with the locals for après-ski beverages in the parking lot, since the bars were shut. Having given up alcohol, though, she was repeatedly chided by the ski bums for being a buzzkill. To her social media-trained brain, that began to sound more and more like a brand.
They are entrepreneurs from different walks of life, and at different ages and life stages. In seeking to adjust their individual titration levels, they each realized that adult, nonalcoholic beverages-non-alcs-were positioned to take off in a society that was looking to dry out but didn't want the party to die out. They took different paths to market and funding. They had zero experience in the drinks business, and yet saw that as an advantage. As Sakey says, "It took people from outside the spirits world to make something that shook the spirits world up." For Sakey and Crooch, that something would be Ritual Zero Proof Gin Alternative, now part of a Ritual lineup that includes non-alc versions of whiskey, rum, and tequila, as well as an aperitif. For Taylor, the launch of Mingle Mocktails would end her corporate career and kick off a new one as an entrepreneur. Fedick, for her part, would turn the après-ski taunts into a real brand, Buzzkill, a canned non-alc sauvignon blanc, with more varietals to follow.
All of which is to say: Faux booze is for real. Although the non-alc market is still dominated by beer, the real action is now in spirits, mocktails, and wines, which are enjoying explosive growth. According to NielsenIQ, the non-alc category, including beer, expanded by about 31 percent in the 12 months through July 2023, to $550 million in off-premise sales (retail excluding bars and restaurants). Non-alc spirits, though, grew 94 percent.
Diageo, the drinks giant that owns Johnnie Walker, Tanqueray, and Guinness, is working hard to accommodate the moderation market. And why not? By some estimates, 10 percent of the global alcoholic drinks business-now about $1.6 trillion, according to Statistacould convert to non-alc. Diageo (which also owns Guinness 0) intends to drink up some of that market share.
The growth of non-alcs is spawning specialist retailers, too. Today you can buy hundreds of these drinks at Boisson, a chain that sells nothing but nonalcoholic adult beverages. It was founded by Nick Bodkins after his wife pleaded, "I really need a negroni," when she couldn't have alcohol for health reasons. Boisson, he says, is now the largest U.S. non-alc retailer and wholesaler, and its shelves reveal the startup starting lineup. There are the brothers Louie and Matt Catizone, craft distillers and co-founders with Steven DeAngelo of the Brooklynbased St. Agrestis, which makes Phony Negroni; Rachel Martin, co-founder of Oceano Wines in San Luis Obispo, California, who is culturing a non-alc version of her acclaimed chardonnay; Melanie Masarin, the L.A.-based former head of retail at Glossier, who founded Ghia, a non-alc aperitif; and Tom and Lisa Johnstone, left coasters who left Diageo to co-found Optimist Drinks, which makes botanical spirits-original products that don't mimic anything.
The fact that non-alc liquors don't have alc yet have alc-like prices has also drawn in a swath of old-line retailers. CVS, which sells alcohol in some states, is clearing space for non-alcs in the name of healthy lifestyles. "It's about giving our customers the options they may be looking for to live a balanced life," says Don Fahey, director of beer, wine, and spirits for CVS, which now stocks Ritual and other brands. And a subset of nonalc beverages using adaptogenic and nootropic ingredients is threatening to amp up the category's health claims, or at least the good-for-you boasts.
Playing their part, the big drink companies are pouring capital into the newcomers. Diageo's own accelerator was an early funder of Ritual and is scouting for more deals this year. "We're looking for passionate founders with high-quality products that build connections with consumers," says Eugene Khabensky, vice president of global ventures at the London-based company. Kitchen-table mixologists across America will be hoping their potions can entice outfits like Diageo and Pernod Ricard, its French counterpart, into an investment.
Juicing the popularity of the non-alc sector are a host of demographic and sociological trends that have prompted people to reevaluate their relationship with alcohol. Dry January, a movement started in 2013 by the British nonprofit Alcohol Change UK to reduce harm in a nation known for binge drinking, crossed the pond and began to gain momentum as a broader lifestyle choice. From that evolved sober-curious, a wellness movement designed to get people to rethink their drinks, spawning, most recently, Sober October. It's a movement that has resonated with Gen-Z, in particular.
According to the Adult Non-Alcoholic Beverage Association-a trade group that didn't exist five years ago-more than 40 percent of Gen-Z adults have never consumed an alcoholic beverage.
They're patronizing booze-free bars like Hecate Café & Elixir Lounge in Manhattan, where you can buy a drink called the Healer (Apothékary's Blue Me Away, lemonade, seltzer, and lavender simple syrup) for $12. And their new habits seem likely to stick.
As they set out to build Ritual in 2018, Sakey, 49, and Crooch, 46, adopted an unusual funding strategy. They identified the investor they believed to be their best prospect for getting to market-and then stalked its executives. That was Distill Ventures, the venture capital arm of Diageo, which had been funding artisanal liquor companies for the better part of a decade. For an industry summit and booze fest in New Orleans known as Tales of the Cocktail, Crooch flew down with a folder filled with headshots of everyone who worked for Distill. Out on the prowl, he found a couple of Distill's leaders at one lecture and pounced. "I effectively bum-rushed the stage afterward," he says, "and told them what our idea was."
That idea: to replace the alcoholic component of a cocktail with a non-alc liquid that echoed actual spirit flavors, creating a true alternative to liquor in the same way that almond milk is an alternative to dairy milk and that gluten-free bread exists and the Impossible Burger is a thing. Crooch and Sakey began pondering the question, naturally enough, at a bar in their Chicago neighborhood. "What if I could have another old-fashioned like we've been drinking all night, but it didn't have alcohol?" asks Sakey. "I don't need any more alcohol."
That moment of thoughtfulness on a night of imbibing was what they pitched to Distill Ventures. Their timing was exquisite. Diageo was well aware of the changes in people's attitude to alcohol and had already been offering consumers non-alc variants of its portfolio. Ritual was the kind of company they were searching for. "We believed in them," says Khabensky. "They had a real clear strategy for their product and a plan for how they would execute it."
For Crooch, the deal was crucial, because he had already burned through three startups. He'd built a thriving business as a personal trainer but couldn't scale it beyond himself-he was the product. He then tried to transfer his knowledge about physical wellbeing into companies that made protein supplements, soup, and bone broth. The constant fundraising was exhausting, and he knew what being cash short could do to relationships. "We're best friends," says Crooch of Sakey, "and we're going to finish this company best friends. We're not going to let that get in the way."
What the pair didn't have when Distill decided to invest was the actual product.
One of the unusual aspects of faux booze is that it can be much more difficult to make than the genuine article. People have been distilling whiskey for at least 1,500 years and fermenting wine and beer for 8,000 years. An Irish concoction called poitín dates to the sixth century. Gin, a relative newcomer, was developed in the 1550s by a monk as a medicinal product. Herbal liquors such as amaro followed the same course. But remove the alcohol by, say, boiling it off, and the taste goes with it.
Sakey is an accomplished novelist who has published nine thrillers but is also a dedicated if less accomplished amateur chef. As the talks progressed with Distill, he set to work in his kitchen to replicate the taste of a mixed drink with gin or whiskey rather than try to duplicate the taste of gin or whiskey on its own. One goal: Reproduce the bite of a spirit. He began experimenting with chili peppers, steeping spices, fruits, and teas until he had a proof of concept.
The Distill money then allowed them to take their concept to flavor specialists in bourbon country in Kentucky, who found their project "amusing," says Sakey, but played along. A year and 500 flavoring iterations later-a 1 percent lemon concoction, say, or a potion with a hint of prickly ash-the partners had a commercial liquid, a gin alternative, that they could actually sell.
The pair now faced the problem that greets all entrepreneurs in new product categories: persuading retailers to carry it. They started local, in 2020, with a liquor store chain in Chicago named Binny's. They got a meeting with the buyer, who thought they might have had a liquid lunch. "The buyer absolutely hated the idea," says Crooch. "He thought it would never work." Nevertheless, he took a flier on two locals and gave them three stores as a test. A month later, he upped the number to 22, until finally they were in all 45 of the chain's stores.
Today you'll find Ritual's headquarters in the Ravenswood Industrial Corridor in Chicago's North Side, within a group of old industrial buildings called Malt Row that hosts a number of brewery and distillery startups. The pair launched in a storefront that served as office and store and now count a staff of 15 to handle a business that is selling a bottle every second, each retailing for about $30.
And on a late summer morning, the headquarters' bar is open. Sakey plays mixmaster and offers a selection of the cocktails: a negroni and a margarita.
Faux booze is meant to be mixed, not drunk straight. And as a mimic, the stuff works. Ritual's tequila alternate doesn't give itself away in a margarita when compared with the real deal. Neither does the alternative whiskey in a Manhattanespecially if you sneak in some actual red vermouth. A negroni made with Ritual's alternative gin and alternative aperitif is still a proper aperitivo.
The public is drinking up. This year, Ritual expects to hit about $44 million in sales and is moving into Walmart and Meijer as well as launching direct-toconsumer sales in 15 countries. The company has been growing 100 percent annually for three years and has already surpassed the early mover in the category, Seedlip (a British com...
Laura Taylor was a corporate warrior, an engineer by training, who was marching along in a career with the likes of Rockwell, Accenture, IBM, and Tableau. She routinely mixed work and drinking until the drinking got to be a bit too routine. But trying to stop proved difficult, given there were few interesting nonalcoholic options. That's when she decided to make one.
Molly Fedick was the creative director at Hinge, a dating app, and enjoying the club and party scene in New York City like a proper young professional when the pandemic first shelved her social life and then her job. Relocating to Lake Tahoe, Nevada, she often gathered with the locals for après-ski beverages in the parking lot, since the bars were shut. Having given up alcohol, though, she was repeatedly chided by the ski bums for being a buzzkill. To her social media-trained brain, that began to sound more and more like a brand.
They are entrepreneurs from different walks of life, and at different ages and life stages. In seeking to adjust their individual titration levels, they each realized that adult, nonalcoholic beverages-non-alcs-were positioned to take off in a society that was looking to dry out but didn't want the party to die out. They took different paths to market and funding. They had zero experience in the drinks business, and yet saw that as an advantage. As Sakey says, "It took people from outside the spirits world to make something that shook the spirits world up." For Sakey and Crooch, that something would be Ritual Zero Proof Gin Alternative, now part of a Ritual lineup that includes non-alc versions of whiskey, rum, and tequila, as well as an aperitif. For Taylor, the launch of Mingle Mocktails would end her corporate career and kick off a new one as an entrepreneur. Fedick, for her part, would turn the après-ski taunts into a real brand, Buzzkill, a canned non-alc sauvignon blanc, with more varietals to follow.
All of which is to say: Faux booze is for real. Although the non-alc market is still dominated by beer, the real action is now in spirits, mocktails, and wines, which are enjoying explosive growth. According to NielsenIQ, the non-alc category, including beer, expanded by about 31 percent in the 12 months through July 2023, to $550 million in off-premise sales (retail excluding bars and restaurants). Non-alc spirits, though, grew 94 percent.
Diageo, the drinks giant that owns Johnnie Walker, Tanqueray, and Guinness, is working hard to accommodate the moderation market. And why not? By some estimates, 10 percent of the global alcoholic drinks business-now about $1.6 trillion, according to Statistacould convert to non-alc. Diageo (which also owns Guinness 0) intends to drink up some of that market share.
The growth of non-alcs is spawning specialist retailers, too. Today you can buy hundreds of these drinks at Boisson, a chain that sells nothing but nonalcoholic adult beverages. It was founded by Nick Bodkins after his wife pleaded, "I really need a negroni," when she couldn't have alcohol for health reasons. Boisson, he says, is now the largest U.S. non-alc retailer and wholesaler, and its shelves reveal the startup starting lineup. There are the brothers Louie and Matt Catizone, craft distillers and co-founders with Steven DeAngelo of the Brooklynbased St. Agrestis, which makes Phony Negroni; Rachel Martin, co-founder of Oceano Wines in San Luis Obispo, California, who is culturing a non-alc version of her acclaimed chardonnay; Melanie Masarin, the L.A.-based former head of retail at Glossier, who founded Ghia, a non-alc aperitif; and Tom and Lisa Johnstone, left coasters who left Diageo to co-found Optimist Drinks, which makes botanical spirits-original products that don't mimic anything.
The fact that non-alc liquors don't have alc yet have alc-like prices has also drawn in a swath of old-line retailers. CVS, which sells alcohol in some states, is clearing space for non-alcs in the name of healthy lifestyles. "It's about giving our customers the options they may be looking for to live a balanced life," says Don Fahey, director of beer, wine, and spirits for CVS, which now stocks Ritual and other brands. And a subset of nonalc beverages using adaptogenic and nootropic ingredients is threatening to amp up the category's health claims, or at least the good-for-you boasts.
Playing their part, the big drink companies are pouring capital into the newcomers. Diageo's own accelerator was an early funder of Ritual and is scouting for more deals this year. "We're looking for passionate founders with high-quality products that build connections with consumers," says Eugene Khabensky, vice president of global ventures at the London-based company. Kitchen-table mixologists across America will be hoping their potions can entice outfits like Diageo and Pernod Ricard, its French counterpart, into an investment.
Juicing the popularity of the non-alc sector are a host of demographic and sociological trends that have prompted people to reevaluate their relationship with alcohol. Dry January, a movement started in 2013 by the British nonprofit Alcohol Change UK to reduce harm in a nation known for binge drinking, crossed the pond and began to gain momentum as a broader lifestyle choice. From that evolved sober-curious, a wellness movement designed to get people to rethink their drinks, spawning, most recently, Sober October. It's a movement that has resonated with Gen-Z, in particular.
According to the Adult Non-Alcoholic Beverage Association-a trade group that didn't exist five years ago-more than 40 percent of Gen-Z adults have never consumed an alcoholic beverage.
They're patronizing booze-free bars like Hecate Café & Elixir Lounge in Manhattan, where you can buy a drink called the Healer (Apothékary's Blue Me Away, lemonade, seltzer, and lavender simple syrup) for $12. And their new habits seem likely to stick.
As they set out to build Ritual in 2018, Sakey, 49, and Crooch, 46, adopted an unusual funding strategy. They identified the investor they believed to be their best prospect for getting to market-and then stalked its executives. That was Distill Ventures, the venture capital arm of Diageo, which had been funding artisanal liquor companies for the better part of a decade. For an industry summit and booze fest in New Orleans known as Tales of the Cocktail, Crooch flew down with a folder filled with headshots of everyone who worked for Distill. Out on the prowl, he found a couple of Distill's leaders at one lecture and pounced. "I effectively bum-rushed the stage afterward," he says, "and told them what our idea was."
That idea: to replace the alcoholic component of a cocktail with a non-alc liquid that echoed actual spirit flavors, creating a true alternative to liquor in the same way that almond milk is an alternative to dairy milk and that gluten-free bread exists and the Impossible Burger is a thing. Crooch and Sakey began pondering the question, naturally enough, at a bar in their Chicago neighborhood. "What if I could have another old-fashioned like we've been drinking all night, but it didn't have alcohol?" asks Sakey. "I don't need any more alcohol."
That moment of thoughtfulness on a night of imbibing was what they pitched to Distill Ventures. Their timing was exquisite. Diageo was well aware of the changes in people's attitude to alcohol and had already been offering consumers non-alc variants of its portfolio. Ritual was the kind of company they were searching for. "We believed in them," says Khabensky. "They had a real clear strategy for their product and a plan for how they would execute it."
For Crooch, the deal was crucial, because he had already burned through three startups. He'd built a thriving business as a personal trainer but couldn't scale it beyond himself-he was the product. He then tried to transfer his knowledge about physical wellbeing into companies that made protein supplements, soup, and bone broth. The constant fundraising was exhausting, and he knew what being cash short could do to relationships. "We're best friends," says Crooch of Sakey, "and we're going to finish this company best friends. We're not going to let that get in the way."
What the pair didn't have when Distill decided to invest was the actual product.
One of the unusual aspects of faux booze is that it can be much more difficult to make than the genuine article. People have been distilling whiskey for at least 1,500 years and fermenting wine and beer for 8,000 years. An Irish concoction called poitín dates to the sixth century. Gin, a relative newcomer, was developed in the 1550s by a monk as a medicinal product. Herbal liquors such as amaro followed the same course. But remove the alcohol by, say, boiling it off, and the taste goes with it.
Sakey is an accomplished novelist who has published nine thrillers but is also a dedicated if less accomplished amateur chef. As the talks progressed with Distill, he set to work in his kitchen to replicate the taste of a mixed drink with gin or whiskey rather than try to duplicate the taste of gin or whiskey on its own. One goal: Reproduce the bite of a spirit. He began experimenting with chili peppers, steeping spices, fruits, and teas until he had a proof of concept.
The Distill money then allowed them to take their concept to flavor specialists in bourbon country in Kentucky, who found their project "amusing," says Sakey, but played along. A year and 500 flavoring iterations later-a 1 percent lemon concoction, say, or a potion with a hint of prickly ash-the partners had a commercial liquid, a gin alternative, that they could actually sell.
The pair now faced the problem that greets all entrepreneurs in new product categories: persuading retailers to carry it. They started local, in 2020, with a liquor store chain in Chicago named Binny's. They got a meeting with the buyer, who thought they might have had a liquid lunch. "The buyer absolutely hated the idea," says Crooch. "He thought it would never work." Nevertheless, he took a flier on two locals and gave them three stores as a test. A month later, he upped the number to 22, until finally they were in all 45 of the chain's stores.
Today you'll find Ritual's headquarters in the Ravenswood Industrial Corridor in Chicago's North Side, within a group of old industrial buildings called Malt Row that hosts a number of brewery and distillery startups. The pair launched in a storefront that served as office and store and now count a staff of 15 to handle a business that is selling a bottle every second, each retailing for about $30.
And on a late summer morning, the headquarters' bar is open. Sakey plays mixmaster and offers a selection of the cocktails: a negroni and a margarita.
Faux booze is meant to be mixed, not drunk straight. And as a mimic, the stuff works. Ritual's tequila alternate doesn't give itself away in a margarita when compared with the real deal. Neither does the alternative whiskey in a Manhattanespecially if you sneak in some actual red vermouth. A negroni made with Ritual's alternative gin and alternative aperitif is still a proper aperitivo.
The public is drinking up. This year, Ritual expects to hit about $44 million in sales and is moving into Walmart and Meijer as well as launching direct-toconsumer sales in 15 countries. The company has been growing 100 percent annually for three years and has already surpassed the early mover in the category, Seedlip (a British com...
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Inc. (Digital) - 1 Issue, Winter 2023/2024