Over the past decade, the better-for-you movement has been defining the food and beverage category. Consumers are keenly aware of ingredients, nutrition labels, and diets. This is part of a broader trend in which US consumers are spending more than ever on overall wellness including fitness, sleep, mental health, etc. With a generational wellness trend, it was inevitable consumers would begin to reconsider their alcohol preferences and consumption. According to Mintel, 44% of US alcohol drinkers say they try to “select the healthiest alcohol option.” 52% of US consumers say they want to reduce their alcohol consumption based on a survey from Alcohol Trade Group. These numbers are even larger in younger demographics that are leading the health and wellness movement.
Emerging alcohol brands and incumbents are beginning to deliver on this demand with low-calorie options (i.e. hard seltzers), increased visibility in nutrition labels, and functional benefits (i.e. hard kombucha). These are all great choices for BFY alcohol, but they don’t fulfill the occasions where a consumer wants to be a part of a social event and reduce or avoid alcohol. Sure they could drink sparkling water, but that doesn’t fulfill the social connection of sharing a drink. On the other hand, the incumbents in the NA category have subpar products and carry a stigma of abstaining from alcohol.
This is where emerging NA brands are stepping up. They are changing the perception of non-alcoholic beer with better tasting products and branding for mainstream alcohol consumers. Today, 78% of non-alcohol purchasers also buy traditional alcoholic drinks. The category is growing quickly and becoming a big business: non-alcoholic beverage sales grew 33% to $331 million over the last year according to Nielsen. Goldman Sachs forecasts the category reaches 3% of the $100B US beer market by 2025.
Both as consumers and investors, we’ve been interested in the NA category for some time. Most of the PowerPlant team enjoys drinking alcohol, but there are many events where we crave a great NA craft beer like Partake’s: Tuesday night networking happy hours, Sunday night football, or after a couple of beers on a night out with friends.
We initially met Ted and the Partake team when they were raising their prior round in 2020. We loved Ted’s personal mission to build in the non-alcoholic set. He initially built an e-commerce marketplace for non-alcoholic brands and then launched Partake to give consumers great craft beers. Partake has won multiple awards for its products including the World Beer Awards, US Beer Championship, Frankfurt International Trophy, and others.
Since our initial meeting, the brand has grown almost 100% y-o-y and has expanded from Canada into the US. Today, we are excited to announce that we are leading their $16.5M Series B alongside Amberstone, CircleUp, EDC, and others. We’re thrilled to join the Partake team in its mission to give consumers better drinking options and build one of the leading non-alcoholic brands.
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