Non-Alcoholic Drinks: A New Opportunity

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Photography by: Video from Distill Ventures

Whilst the revolution in the non-alcoholic drinks category picks up steam, Distill Ventures, the Diageo-backed spirits accelerator, are for a second year seeking independent entrepreneurs with bold ideas to pitch for their non-alcoholic business development programme. Successful entrepreneurs will receive mentoring sessions and a one-off investment of £10k/$12k to help them start their brand.

When it comes to non-alcoholic choices for adult consumers, the drinks industry is changing rapidly. People are looking for alternatives to sugary soft drinks, and an array of premium substitutes have launched to capitalise on this demand.

Consequently, Distill Ventures are looking for original non-alcoholic drinks brands or concepts. Successful candidates will benefit, not only from the investment, but guidance from experts at DV to help establish these new businesses and harness changes in drinking trends.

"There's clearly a big trend among people who are more engaged in thinking about health and welfare in a holistic way," explains Distill Ventures co-founder Frank Lampen. "Two elements of that impinge on traditional ways of drinking. The first is to have a varied repertoire of drinks that includes alcoholic and non-alcoholic, and the second is not defaulting to sugary drinks if you're not drinking alcohol."

At this year's Tales of the Cocktail, the opening party, hosted by William Grant & Sons, was entirely non-alcoholic. This spirit-free celebration emphasised the market trend of non-alcoholic drinks, but also, comes at a time when responsible consumption and wellbeing is at the forefront of the industry. Indeed, the introduction of non-alcoholic beverages is becoming normalised in the global bar community.

The question, what to drink when you're not drinking, took centre-stage. Ben Branson, founder of Seedlip, found his own experience with unbrilliant non-alcoholic drinks inspired his creative leap into the distillery world. With his copy of The Art of Distillation as a companion, he took to his kitchen in the woods, using copper pot stills, he created the recipe for Seedlip which includes no sugar or alcohol. Seedlip now comes in three varieties: Seedlip Garden 108, Seedlip Spice 94 and Seedlip Grove 42. And this spirit behaves much like an alcoholic spirit, intended to be sipped, as a base spirit substitute, not quaffed in lightning speed.

His example and consumer demand for greater choice in the non-alcoholic sector has spurred other entrepreneurs to create alcohol free distillates and establish a new drinks category. However, Seedlip stands out in the non-alcoholic drinks category not only for being the "world's first" distilled non-alcoholic spirit, but also for drawing attention to non-drinkers seeking something far more.

"There seems to be this ground swell of interest in not drinking," says Henry Chevallier Guild, co-founder of Nonsuch Shrubs. The non-alcoholic consumer net casts far and wide, from health enthusiasts to the designated driver, and individuals who are pregnant, religious, allergic or enjoying Dry January, or simply, don't want alcohol. And those looking for the same experience, a base spirit substitute, are now finding these in cocktails being offered in high-end bars and restaurants.

"The inspiration for Nonsuch came from a desire, about a decade ago to stop drinking, just for a bit. Luckily for me, I found giving up alcohol quite easy. But the thing I really struggled with is after three or four days, I just run out of things to drink... I wanted to produce something that behaved in every way, from a drinkability perspective, like alcohol does except it doesn't get you drunk," says Henry.

The rise in non-alcoholic drinks is causing exciting market transformations. There's a demand to cater for the specific individual. And there's an experience to be had, one which does not compromise on flavour. Distill Ventures comments on areas prospective brand owners could explore, but applicants need not be limited by these. "It could be using a process associated with alcohol, like fermentation or distillation, so there's some of that complexity there," says Lampen. "Another interesting area is having drinks that are served in a way that might deliver the mouthfeel or foamy head that you associate with alcohol."

Distill Ventures found last year's call for applicants gathered a superb response, awarding five entrepreneurs a one-off investment. Nonalquino, crafted by John deBary, and Twayblade, created by Paul Matthews, are just two of the recipients bounding into the non-alcoholic business. Paul's product first emerged when he found the market demanded a non-alcoholic flavoursome drink. And Distill Ventures provided the funds and knowledge necessary in helping John start to get his brand off the ground. "I came in with this idea and I thought it was really genius and after a couple of meetings... I went back to the drawing board... I was able to create something that was so far beyond what I ever thought I would have done on my own," says John.

The industry has space for a better branded and better tasting beverage for those not consuming alcohol. And for Distill Ventures, they want to help create a great restaurant and bar experience for people not drinking alcohol - and also provide bartenders a tool to craft great tasting drinks as well. "Obviously bartenders have an embarrassment of riches when it comes to spirits from gin and vodka, to whisky and eaux-de-vie," says Lampen. "But the options they have available to make non-alcoholic drinks have traditionally been sugar-based or bitters. We want to give bartenders something to play with."

These non-alcoholic products are authentic, and people are enjoying a bar experience that was missing before. But it can also be said for businesses too. Bars, restaurants and hotels need to be selling their non-drinking customers something more expensive and more profitable than a mineral water.

But launching a new product isn't cheap. Costs vary immensely depending on minimum quantities needed, whether ageing is required, raw ingredient prices, packaging costs, and so on. "We've seen people who've gone to launch with as little as £20,000 ($25,670) or £30,000 ($38,345)," says Lampen. "But if you're looking at production and going into market in a way where you can do a 6-month test, that's going to be £100,000 ($128,000) to £200,000 ($256,000)." Thus, the investment may not bring products to launch, but hopefully will bring entrepreneurs to a stage where they're ready to seek further investment.

At its heart, Distill Ventures are dedicated to accelerating the next generation of drinks brands, including the non-alcoholic segment, and providing them with tools to grow their business. "Basically, we're going to give you some money to tackle the big questions of setting up a brand," says Lampen. "You can go talk to some experts, meet manufacturers, chat to distillers and see what's possible, and we'll help you take it from there."

YOUR NON-ALC ADVENTURE BEGINS HERE

To apply, please visit the Distill Ventures website. Submissions will be accepted from 31st July until 7th September 2018.

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