In a recent national TV ad for its non-alcoholic beer, Heineken features Daniel Craig bellying up to the bar as James Bond, opting not for a cocktail but for the Heineken 0.0, the beer maker's zero-percent alcohol lager.
Non-alcoholic beer has been around for decades, but the major marketing push shows just how serious beer companies are taking 0% ABV drinks — and highlights an industry in growth mode. Consumer demand for non-alcoholic beverages was up 60% in the first seven months of 2020, with demand for non-alcoholic beer up by 85%.
"You know how a category has arrived? When James f---ing Bond is advertising for it," said Marcus Sakey, the founder of Ritual Zero Proof, a Chicago startup that makes zero-alcohol gin, whiskey, tequila and rum.
Founded in 2019, Ritual has become one of the emerging NA spirits brands taking off with consumers who want the experience of a cocktail, without the buzz. Starting as a direct-to-consumer brand, Ritual has increased its retail presence, and is now in 125 Whole Foods stores across the U.S. In January, it will be in every Whole Foods in the country.
Sakey said the NA spirit space is behind the growth of its beer counterpart, but it's catching up. Ritual's revenue has grown more than 240% since early 2020, proof that there's a serious appetite for cocktails that don't pack a punch.
"It's simply becoming a CPG product that people want, the same way meat and dairy alternatives did," he said.
The comparison between NA spirits and brands like the Impossible Burger or Blue Diamond almond milk is an apt one, Sakey explains, as it targets a similar consumer. Ritual's drinks aren't marketed toward someone who's quitting alcohol entirely, but rather someone who's in search of a little more balance.
"Our product is aimed at people who are conscious and mindful, the same way 95% of buyers of dairy and meat alternatives aren’t vegetarians or vegans," Sakey said.
Sakey said the typical Ritual consumer is drinking its product on the weekdays and saving the hard stuff for the weekend. Or they're switching to Ritual after they've had a few already. For the regular alcohol consumer, opting for a booze-free cocktail might sound like a hard sell. But Sakey said the company's traction shows that the reasons to try NA spirits are growing, whether you're pregnant, on a diet, training for a marathon or just trying to be more mindful about your alcohol consumption.
"We’re not anti-alcohol at all. But there are times when you don't want the calories, when you’re not after the alcohol," he said. "Where in truth, what you really want is the ritual of mixing and drinking something in your hand while you chat or read a book."
Sakey said it took over a year of development and 500 iterations before Ritual settled on its formula, which is made with all-natural, individually-distilled botanicals that simulate the taste, smell and burning sensation of liquor.
"Bite and burn is critical to Ritual," he said. "Alcohol has a bite and you need that for a cocktail. It doesn’t work without that."
Last year Ritual landed an investment from Distill Ventures, the venture arm of Diageo, the London-based owner of Johnnie Walker, Smirnoff, Captain Morgan, Don Julio and other alcohol brands. The exact size of the deal wasn't disclosed, but Sakey said the seven-figure investment brings the startup extra visibility in the spirit space and insight into the market. And Sakey wouldn't rule out the possibility of Diageo incorporating Ritual into one of its labels down the road.
Ritual was founded after Sakey, a 47-year-old father of one, decided to become more conscious about his own alcohol consumption. And he knew many others felt the same.
"If you're willing to go to the gym or take a yoga class or be conscious of your diet, then this is exactly that," he said. "Half of what I was missing [from drinking] was the ritual of the thing. I liked mixing a drink. I liked sitting by the fire with a cocktail in my hand far more than I wanted the alcoholic calories, most of the time."
