Athletic Brewing Company: Bill Shufelt

Summary

Summary of "How I Built This" Episode: Athletic Brewing Company with Bill Shufelt

In this compelling episode of How I Built This, host Guy Raz delves into the inspiring journey of Bill Shufelt, founder of Athletic Brewing Company. Bill transforms the overlooked and stigmatized nonalcoholic beer market into a thriving, innovative industry, now valued at over $800 million. His story is a testament to resilience, strategic innovation, and the power of unwavering belief in one's vision.

---

1. Early Life and Personal Challenges

Background and Family Influence

Bill Shufelt grew up in Darien, Connecticut, during the 1980s and 1990s. His father worked as a manager in the textile industry, while his mother was a dedicated kindergarten teacher. The sudden illness and subsequent passing of his mother during his senior year of high school profoundly impacted Bill's life.

• Moment of Loss:
  "It was really very sudden. She was diagnosed spring of my senior year of high school... she passed away three months later."
  (06:41)

Impact on Personal Development

This early loss instilled in Bill a sense of resilience and a profound appreciation for family support, which later became a cornerstone of his entrepreneurial journey.

---

2. Career in Finance and Realization of Unfulfillment

Transition to Finance

After graduating from Middlebury College, Bill pursued a career in finance, starting at Knight Capital Group in 2005. The high-pressure environment was intellectually stimulating but emotionally draining.

• Work Environment:
  "It was totally merit-based. The harder I worked, the better I did."
  (09:38)

Recognition of Lack of Fulfillment

Despite achieving success in finance, Bill felt unfulfilled, experiencing a continuous cycle of stress and burnout.

• Feeling Adrift:
  "I was more adrift than I would have thought or that I realized in the moment."
  (08:16)

---

3. The Decision to Stop Drinking and Its Impact

Motivation for Change

Approaching his 30s, Bill decided to stop drinking alcohol to focus on his fitness goals and overall health. This decision was influenced by his growing passion for running ultramarathons.

• Health Transformation:
  "In that month, I felt incredible... I realized... I've slept through the night, like, three weeks in a row."
  (14:22)

Discovery of Intellectual Curiosity

Abstaining from alcohol reignited Bill's intellectual curiosity, leading him to engage in activities he had previously neglected, such as reading and exploring new interests.

• Rekindled Interests:
  "I started reading a lot of books again... alcohol was a dampener on my evening intellectual activity."
  (14:48)

---

4. Identifying the Opportunity in Nonalcoholic Beer

Frustration with Current Options

Bill's experience navigating social events without alcohol highlighted the scarcity of quality nonalcoholic beer options. This frustration sparked the idea to create a superior product.

• Market Gap Recognition:
  "It's unbelievable. There aren't good options without the alcohol."
  (17:58)

Support from Family

Encouraged by his wife's unwavering support, Bill began researching the beer industry, aiming to revolutionize the nonalcoholic segment.

• Wife’s Encouragement:
  "She was like, you should do that. She believes in your passion."
  (19:22)

---

5. Overcoming Initial Challenges in Brewing and Funding

Difficulty in Securing Partnerships

Entering the nonalcoholic beer market in 2015 was met with skepticism. Manufacturers and brewers were hesitant to invest in a seemingly non-viable product.

• Rejections and Setbacks:
  "Most retailers still said no. Not interested."
  (35:35)

Persistence in Fundraising

Despite numerous rejections during investor meetings, Bill remained steadfast, conducting over 120 meetings and ultimately securing support from 66 individual investors.

• Fundraising Efforts:
  "I ended up doing 120 investor meetings. 66 individuals supported us in the angel round."
  (49:53)

---

6. Building the Product and Establishing the Brand

Finding the Right Brewing Partner

A breakthrough occurred when Bill connected with John Walker, a talented brewer who shared his vision for creating a flavorful, high-aroma nonalcoholic beer.

• Meeting John Walker:
  "He was like, I totally see it. It sounds like such a fun innovation challenge."
  (39:12)

Product Development and Innovation

Bill and John embarked on a scientific approach to brewing, experimenting with numerous trials to perfect the brewing process without compromising flavor.

• Innovative Brewing Process:
  "We're going to do such small tweaks along the whole way and it's going to be hundreds of trials."
  (42:04)

Naming the Brand

After considering hundreds of names, they settled on "Athletic" to convey aspiration, positivity, and a connection to an active lifestyle.

• Brand Naming:
  "We chose Athletic because we are building in a category that had never had any positivity to it."
  (52:07)

---

7. Initial Market Entry and Scaling Challenges

Launching in Connecticut

Athletic Brewing launched in June 2018 through Whole Foods and Total Wine in Connecticut. Initial sales were slow, necessitating hands-on efforts to boost product visibility.

• Early Sales Efforts:
  "I would go up to people... and have them reach over my shoulder and try it."
  (56:56)

Grassroots Marketing at Athletic Events

Bill pioneered sampling at athletic events, aligning the brand with health-conscious and active individuals. While initial receptions were mixed, consistent effort led to brand recognition and loyalty.

• Sampling Strategy:
  "I sampled at 75 athletic events... they would go from making fun of me to rattling off occasions."
  (60:55)

---

8. Achieving Significant Growth and Industry Impact

Surge in Demand

By the summer of 2019, Athletic Brewing faced unprecedented demand, necessitating the expansion of brewing capacity and the opening of additional facilities.

• Scaling Operations:
  "In the summer of 2019, we doubled our capacity and went out of stock again after three months."
  (63:03)

Expansion During the Pandemic

Despite the challenges posed by the COVID-19 pandemic, Athletic Brewing capitalized on the surge in nonalcoholic beverage consumption, expanding to a new brewery in San Diego and significantly increasing team size.

• Pandemic Growth:
  "From March 2020 to two years later, we went from about 26 teammates to 220 teammates."
  (66:24)

Market Leadership

Athletic Brewing became one of the top craft breweries in the U.S., leading the nonalcoholic beer segment and influencing a broader shift in consumer preferences towards healthier, nonalcoholic options.

• Industry Influence:
  "Nonalcoholic beer is still only 1.5% of beer, but in certain channels, it's now over 10%."
  (67:59)

---

9. Key Insights and Reflections

Role of Perseverance and Support

Bill attributes his success to relentless perseverance, strategic partnerships, and the unwavering support from his wife and co-founder John Walker.

• Importance of Teamwork:
  "Finding John as a co-founder has been one of the most important things of the whole journey."
  (71:10)

Alignment with Market Trends

Recognizing and aligning with the growing trend towards health-conscious living and moderation in alcohol consumption was pivotal in Athletic Brewing's success.

• Market Alignment:
  "Humans are not drinking alcohol 99% of the time... the occasion base is enormous for nonalcoholic beverages."
  (69:58)

Future Outlook

Bill envisions a future where nonalcoholic beer constitutes a significant portion of the beer market, driven by continual innovation and changing consumer preferences.

• Vision for the Future:
  "I think it's going to be over 50% of beer... humans are not drinking alcohol 99% of the time."
  (69:48)

---

Notable Quotes with Timestamps

• On Overcoming Adversity:
  "I've got to keep at it."
  (03:46)

• On Personal Transformation:
  "I've slept through the night, like, three weeks in a row."
  (14:22)

• On Innovation:
  "The product has to be totally reinvented."
  (24:27)

• On Perseverance:
  "Keep posting job ads, kept doing conversations, and eventually one letter came in."
  (25:53)

• On Team Dynamics:
  "We built a really thoughtful employee handbook."
  (43:50)

• On Success Factors:
  "You actually can love what you do as an adult."
  (71:10)

---

Key Takeaways

1. Identify and Fill Market Gaps: Bill recognized the lack of quality nonalcoholic beer options and strategically positioned Athletic Brewing to fill this void.
2. Persistence Pays Off: Despite numerous rejections, Bill's unwavering commitment and strategic networking eventually led to securing necessary partnerships and funding.
3. Leverage Support Systems: The support from Bill's wife and partnership with John Walker were crucial in navigating the entrepreneurial challenges.
4. Innovate Continuously: Athletic Brewing's focus on flavor and aroma innovation set it apart in a stagnant market.
5. Align with Consumer Trends: Capitalizing on the growing health-conscious trend ensured long-term sustainability and growth.
6. Adapt and Scale Strategically: Bill's ability to scale operations in response to demand and adapt to market changes was instrumental in Athletic Brewing's success.

---

Conclusion

Bill Shufelt's journey with Athletic Brewing Company embodies the essence of entrepreneurial spirit—recognizing unmet needs, relentless pursuit despite challenges, and strategic innovation aligned with consumer trends. His story not only highlights the transformation of the nonalcoholic beer market but also serves as an inspiring blueprint for aspiring entrepreneurs aiming to disrupt and redefine established industries.

---

End of Summary

Transcript

[Guy Raz]

WonderYPlus subscribers can listen to How I Built this early and ad free right now. Join WonderyPlus in the Wondery app or on Apple Podcasts. This episode is brought to you by American Express. In today's ever changing landscape, business owners like you are constantly adapting to new challenges you're always on, relying on your instincts while seeking partners and solutions to help flex and grow. That's where the American Express Business Platinum Card comes in. It works just as hard as you do to help you pursue your passions. With its world class business and travel benefits, you can get more for your business wherever it takes you. Like earning five times membership reward points on flights and prepaid hotels booked on amextravel.com, so that going the extra mile for your business is even more rewarding. And with complimentary access to more than 1400 airport lounges worldwide, including the Centurion Lounge, you can keep your business running while you're on the go. See how the Amex Business Platinum Card gives business owners like you the tools and rewards to do more of what you love. Terms apply. Learn [e-mail] AmExBusiness you know what I love most about listening on Audible? It lets your imagination soar. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, new ways of thinking. There's more to imagine when you listen. I've recently been listening to Table for Two by Amor Toles, an incredible collection of short stories and a novella that takes us back to a character from his book Rules of Civility. And as an Audible member, you can choose one title a month to keep from the entire catalog, including the latest bestsellers and new releases. New members can try audible free for 30 days. Visit audible.com built or text built to 500500 that's audible.combilt or text bilt to 500500 to try audible free for 30 days audible.combilt Ah, and here we have travelers in their natural habitat enjoying guaranteed 4pm checkout at fine hotels and resorts booked through Amex Travel. And they don't even see what's coming at them. We're in.

[Bill Shufelt]

We got the table.

[Guy Raz]

Yep. With resi priority notify they're alerted when hard to get reservations open up reservation for 2mm save the best for last thanks to Amex Platinum, the last day vacation brings yet another experience. That's the powerful backing of American Express. Terms apply. Learn [e-mail] with AmEx.

[Bill Shufelt]

So I was basically raising money in A category that didn't exist, had no money. I wanted to do it in a very capital intensive way. I didn't have a product to share. I had already committed to the lease to the brewing equipment with like my life savings. And there was just less than no momentum. And I remember at one point lying on our kitchen floor, it was one of the very few valleys I've really been in. And my wife basically immediately and without blinking was like, get off the floor. That's absolutely silly. And you've gotta keep at it.

[Guy Raz]

Welcome to How I Built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Bill Shufelt took non alcoholic beer from the dusty backwater of the beverage aisle to center stage. And how he kept building Athletic Brewing even though the world told him it would fail. You know what's really hard in business? Trying to introduce an unfamiliar product into the market. And we've told some of those stories with brands like Vitacoco, Guaiaci, yerba mate, even HealthAid, Kombucha. But you know what's even harder? Launching a product that is familiar but also widely disliked and disparaged. This was the challenge Bill shufelt faced in 2017. Because the thing he wanted to make was nonalcoholic beer. This is a beverage that had been banished to the lowest, most remote shelf on the beer aisle. At the time, it accounted for less than half of 1% of the entire beer market. No self respecting brewer gave non alcoholic beer the time of day. But Bill wanted to do for non alcoholic beer what Jim Cook did for American craft beer back in the 1980s when he launched Samuel Adams Lager. Bill wanted to change perceptions. But at every stage, and I do mean every stage, he got major pushback. No manufacturer wanted to make the beer for him. Very few people wanted to invest. And even after he begged a brewer to help him, and even after they brewed a pretty great batch, most retailers still said no. Not interested. In fact, a lot of potential customers didn't even want to sample the beer. They assumed that any non alcoholic beer was going to taste terrible. And as you will hear, one of the only people who supported Bill through all of this was his wife. But Bill really believed he was onto something. That it was just a matter of time before people might reconsider it. Today, his brand, Athletic Brewing Company is valued at over $800 million and it now commands about 20% of the non alcoholic beer market. But more importantly, it's a beer that is actually enjoyed and appreciated by people who truly like beer. Bill Shufeld grew up in the 1980s and 90s in the of Darien, Connecticut. His dad was a manager in the textile business, and his mom was a kindergarten teacher. But when Bill was a teenager, she got very, very sick.

[Bill Shufelt]

It was really very sudden. She was diagnosed spring of my senior year of high school, and then she was very sick by the end of that summer as I was going off to college. And she passed away three months later. And, yeah, she was really the rock of our family and a huge inspiration in my life. So supportive, so optimistic, endlessly busy and encouraging. And in many ways, as I've become a parent or on this journey, I almost feel like she's more present in my life. There are all these moments in the day where I actually talk to her, like when I walk my dogs at night at the end of the day, or I'm with my son, or I'm making a big business decision, I do feel like there's someone in the room giving me, like, good guidance on judgment. Yeah. As I look on it with, like, a more of a distant lens on it especially, I was very fortunate to meet my wife almost at the exact same time my mom got sick.

[Guy Raz]

Wow.

[Bill Shufelt]

So.

[Guy Raz]

Wow. So you were like 18, 19 years old when you met the woman who you would marry?

[Bill Shufelt]

Yep. And so we've been together 23 years now, me and my wife.

[Guy Raz]

You met in high school.

[Bill Shufelt]

Yep. We've been married for 10, together for 23 years.

[Guy Raz]

Wow.

[Bill Shufelt]

And my wife knows me basically as well as my mom did at that point.

[Guy Raz]

I wonder whether. So this was about 20 years, 23. 23 years ago. And you are 18, you go off to Middlebury College, and during your first year, you lose your mom. How did you just get through that year?

[Bill Shufelt]

Looking at that period, in hindsight, I think I was more adrift than I would have thought or that I realized in the moment.

[Guy Raz]

How could you not be?

[Bill Shufelt]

Yeah, I was just doing my thing, going to classes. Not incredible class attendance, a lot of partying and socializing. And I would say towards the end of college, I took academics more seriously. But it was unfortunately a bit of an underwhelming academic college focus for me.

[Guy Raz]

Yeah. So you're in college and you grew up where so many people, so many of your friends, parents, were basically were commuters to New York City and many of them worked in finance. Was that your thought, too? Did you think, that's sort of what I'm going to do?

[Bill Shufelt]

Yeah, I didn't really know what I wanted to do. So I defaulted into finance. I was great at math and science and that seemed like a good fit. And, and so I kind of pulled on that thread. And a professor really helped me go down the trading route more than anything else. And I did a lot of interviews but didn't get into any of the major banks. I talked to them all and I ended up getting into a firm that is, I would consider very like entry level in the financial world. It was called Knight Capital Group, probably one of the top trading shops on Wall Street. Didn't have the big bank pedigree, but it was probably the perfect spot for me to get in and learn.

[Guy Raz]

This was in around, I think, 2005, right when you started there?

[Bill Shufelt]

Yeah, 2005. So I started on the help desk. There's 12 monitors around you while you're sitting there, blinking lights everywhere, instant messages coming in from 200 people. And so it's like a constant barrage of inputs, 270 days a year, 12 hours a day. And it was so exhausting that I'd often be crawling in the door at the end of the day. The part I did love about it is it was totally merit based. The harder I worked, the better I did. And yeah, eventually I got asked off that desk because I was being helpful and got better and better opportunities from there.

[Guy Raz]

Was it interesting work? Like, did you see this as a path to fulfillment and you know, the peak of Maslow's hierarchy, or did you kind of just see this as a way to make money and, and have a good life?

[Bill Shufelt]

I actually do find a real intellectual passion for trading and investing. And then my next step in six years was I went to sac, which is widely considered one of the top hedge funds in the world. But at some point work, it didn't have a fulfilling nature to me. It was intellectually challenging. But like the Sunday scaries were so real that like they would bleed into my Saturdays.

[Guy Raz]

Even the Sunday scary is like knowing that you got to go back to work on Monday and it's just going to be just a merit, just a sprint from Monday to Friday night.

[Bill Shufelt]

Yeah. And my baseline assumption was that no adults like work. So I, I was of the mindset of like, I show up Monday through Friday, I crush it, and I live my life for the hours outside of that. And I was at this firm that I like, no one in their right mind would ever leave. Like there was something to the stability for my family. And really I didn't know any other path to. And I would have never considered leaving it for another 25 years. I didn't even have a LinkedIn account. I had absolutely no interest in looking around.

[Guy Raz]

And you were married at this point, right?

[Bill Shufelt]

We got married in 2014.

[Guy Raz]

Okay.

[Bill Shufelt]

So I. Yeah, I stopped drinking a year and a half before we got married.

[Guy Raz]

Okay, let's talk about alcohol, because this just says, come out of the blue that you stopped drinking. I don't think you had an alcohol problem. Like, you were not an alcoholic, is it? Right.

[Bill Shufelt]

So I never, like, on paper, had an alcohol problem. In hindsight, I definitely look back on the period from 18 to 28 or 30 after my mom passed away, and I was definitely drinking more than I should have been.

[Guy Raz]

Binge drinking, too, for sure.

[Bill Shufelt]

Yeah. I love having fun. Very social. I'd really fallen in love with craft beer when I went to college in Vermont. That was kind of like a hotbed of the early regional craft breweries, but in New York City, really liked, generally anything. It was more about the social experience and the food pairings. In the finance world, especially at that time, it was very common to do three or four work dinners a week and steakhouses, boozy dinners, and inevitably it was probably almost 150 to 200 work dinners a year.

[Guy Raz]

Wow.

[Bill Shufelt]

And then I was very social. And so Thursday, Friday, Saturday, often Sunday, for sports and stuff, you'd have happy hours, family occasions, barbecues, weddings, bachelor parties, everything. And so very often I was in the five to seven nights a week of drinking. After about 12 years of that, as I was turning 30, I was about to get married. And, you know, me and my wife had had conversations that I should probably. I should definitely drink less and maybe not drink at all.

[Guy Raz]

What was the spark that got you to just stop drinking for a while? Because I think initially it was just. You just stopped drinking for like, a couple weeks. Right. Like a lot of people do. Dry January, or I don't know if it was January, but you basically did a version of that.

[Bill Shufelt]

Yeah. So mine was September, and I'd been running longer and longer distances all summer. So ironically, like, five years after I left college, I absolutely fell in love with fitness. And I had this idea that I wanted to run ultramarathons. And here I was, this adult turning 30, trying to be healthier. I was thinking about what kind of father I want to be down the line, what kind of husband I want to be. And I was like, I'm going to stop drinking as I'm in this training block, but also with an eye towards maybe I'm stopping forever. And in that month, I felt incredible. And speaking personally, like, not making broad health claims or anything, all of a sudden, I realized, whoa, I've slept through the night, like, three weeks in a row.

[Guy Raz]

Yeah.

[Bill Shufelt]

And I didn't realize adults could sleep through the night. I just figured it was stress. It was everything. And so my sleep was better when I worked out. I went from surviving workouts to feeling like I wanted to accelerate throughout the whole workout. And one of the most notable things to me was this intellectual curiosity. In high school, I'd been in every honors and AP class across the board. I used to take electives like Latin that were totally off the curriculum.

[Guy Raz]

Yeah.

[Bill Shufelt]

And all of a sudden, 12 years later, when I stopped drinking, I found myself watching YouTubes on different topics. I started reading a lot of books again. And I think alcohol was a dampener on my evening intellectual activity. I think it was a way to escape from the stress of my day job, the world and everything, and just shut off my busy brain for, you know, a few hours.

[Guy Raz]

You come home buzzed, and you just. You're not going to read.

[Bill Shufelt]

Yeah. Maybe read something for work. Catch up on the rest of my emails. Yeah.

[Guy Raz]

So when that month ended, did you continue it? Did you say, you know what? I'm going to just try this. I'm going to become, like, a teetotaler.

[Bill Shufelt]

Yeah. So I felt confident a talking to my wife. And then I went into work and told not only my boss, who sat directly next to me, but the head of the desk, and I said, I want you guys to hold me accountable because there are social pressures. There's everything. And I want accountability both outside the work walls and inside the work walls. And I was like, I'm stopping drinking, and I want you guys to hold me to that. And they're like, hey, can we actually talk about that? And they pulled me in confidentially, and they were like, I bet you don't know about that guy. That guy. And all these respected people I knew either inside or outside the walls of the firm actually didn't drink. And they were like, you may want to go ask them about it. And I went to some AA meetings just to respect the process and commit to my decision. And I read the big book of AA and learned about those programs, and I put in some work on myself personally.

[Guy Raz]

All right, so you basically decide. You go through the process of pushing alcohol out of your life, but now, I mean, what does it mean for the dinners you're going to and the social events you're going to? I mean, we're talking about? I think like 2014. Ish timeframe. Right. 2015. And so, you know, you could have sparkling water, you could have like just soda water and lemon or something. Did you feel like people would be like, when you wouldn't order a drink, it would make people uncomfortable or like, do you remember how people reacted?

[Bill Shufelt]

For sure. It was like, imagine a work dinner where there's 12 people around the table and a waiter waitress is taking the orders of everyone. And they get to me and I try to ask about a non alcoholic cocktail menu. Non alcoholic beer.

[Guy Raz]

Can I get your mocktail menu, please? Which is normal now, but I mean, even 2015 was still kind of new.

[Bill Shufelt]

Yeah. And it honestly felt like the music stopped in these restaurants and like everyone at the table would stop and look at me.

[Guy Raz]

Record scratch.

[Bill Shufelt]

It really did. And like, so I was someone who was so used to being extremely comfortable socially and like owning those moments and like really using social occasions to my benefit in the workplace or personal life, to being on really awkward footing.

[Guy Raz]

Yeah. So you're dealing with this just kind of awkwardness of going to these places. And did that sort of spark any ideas or thoughts? I mean, eventually it would, but just initially you would just be frustrated.

[Bill Shufelt]

So like at a restaurant, a good drink is equally as important to whatever's on the plate.

[Guy Raz]

Of course.

[Bill Shufelt]

And so I was kind of just muttering to myself, like, it's unbelievable. There aren't good options without the alcohol. I said that to a fair amount of people, but I was mostly internalizing it. And it wasn't till I mentioned it to my wife. When we were on vacation, we were walking to the nicest dinner of the trip that we had kind of circled on the week. And I was just complaining about the three sugary pina coladas or the cokes I'd had that day. And I was like, I know this food's gonna be great, but the drink is going to absolutely ruin it. I mean, have some sugary meal pairing. That is absolute garbage. And I was like, why can't someone just fix this?

[Guy Raz]

Yeah.

[Bill Shufelt]

And why isn't there a delicious non alcoholic beer? Like everyone would want it. And I was just kind of talking out loud. And like, I always talk out loud to my wife. We'd known each other for 13 years at this point, and she never ever told me I had good ideas. Like my biggest critic, best advisor, perfect partner for me. Her reaction to that moment was so singular and stood out. She like, hit my shoulder as we were walking on the sidewalk so hard that it like Spun me around. And she was like, you should do that. And I was like, I'd like literally never had an entrepreneurial bone in my body. I thought I was off on this finance career for the next 25 years. And she was like, you should do that. She's like, the changes you've undergone, like this is such a great opportunity. And we went to dinner, we talked about the whole dinner. And so it's worth noting she was also in a really receptive place to hear this. She had always had entrepreneurial ideas and instincts, but she was more working a corporate job up until the point she got her mba. And so at the time I mentioned this, she was in her MBA program. And so she is naturally hearing in a really good spot to hear an idea and also have the research resources ready to recommend. And then I kept researching it over the next couple of years. So I was researching the beer industry, I was researching how it worked, starting to build a business plan.

[Guy Raz]

When you were looking at, I mean, one of the things you do when you're researching an idea is you're looking for market share or market opportunity. And from what I read, the whole non alcoholic adult beverage market was like 0.3%. I think non alcoholic beer was like an $80 million market. I mean, that's not that big, right? When you're a bunch of businesses competing for $80 million, most people would just say, this is not worth going into.

[Bill Shufelt]

Yeah, it was non alcoholic beer at the time. Basically for 30 years. No innovation, no exciting marketing. A totally flatlined industry with even most.

[Guy Raz]

Of the big brands didn't even have non alcoholic brands. I mean, they had a few and they're a couple from Germany. But it's always like, there's always like those three sad like bottles at the end of the beer aisle in the supermarket. Like three or four just sad, depressing bottles of non alcoholic beer.

[Bill Shufelt]

Yeah. And from a branding perspective, it was a totally radioactive category for any major beer company to put their flag ship in. Because really my hypothesis is in our country that there's these prohibition era stigmas where alcohol had been taken away. It was replaced by this very lesser than product, near beer. And then there was really almost no innovation in near beer besides like light branding innovation for like 80 years. In 2015, almost all the non alcoholic beer on the shelf when I stopped drinking. So I stopped drinking in 2013 and immediately started looking at that shelf. And I'm standing in a very exciting natural foods grocery store where everything has been innovated, locally sourced, organic, and you get to this one corner of the grocery store and there's been no innovation in 30 years.

[Guy Raz]

Yeah.

[Bill Shufelt]

The products are all made in the same way they were made in the 1970s. No new branding dust on the bottles. You're lucky if they're in code. And I was like, this should be an exciting shelf.

[Guy Raz]

Yeah. So clearly, I mean, this was a category that nobody was really thinking about. So why did you think it had potential? I mean, I think I read that around this time you did some market surveys or something.

[Bill Shufelt]

Yep.

[Guy Raz]

But like how, what did you do?

[Bill Shufelt]

So I was using a couple softwares. One my wife recommended from her MBA program and then Google used to have this amazing Google surveys program where you could pay like a penny a survey response or something.

[Guy Raz]

So you would just put surveys out and I guess people would see them as like ads.

[Bill Shufelt]

Yep. Yeah. And so it'd be like, with what frequency would you drink a great tasting non alcoholic beer? Never. Rarely. Regularly. Frequently. Whatever. And I found typically with like 55% frequency people would drink a great non alcoholic beer if it existed.

[Guy Raz]

I mean, it's interesting because, you know, we've done beer companies, dogfish and Samuel Adams and Sierra Nevada. And in virtually every case, the way the story starts is I went to my basement, I got some equipment from Home Depot and I started to mix stuff up to see what I could make. And you were not doing this at all. You were not like buying a home brew kits. Right. You were just, you were just really doing research about the market opportunity? Initially, yeah.

[Bill Shufelt]

One of my first principles moments was the product has to be totally reinvented. And so then I started to think about actual process to brewing beer. And I actually was reaching out to a lot of people. There was a very nice man in Germany who worked for one of the largest equipment manufacturers who actually got back to me and I did some phone calls at 4 in the morning before I went to work with him. He was incredibly helpful, foundation wise on how non alcoholic beer is made, what kind of equipment, how to cost it out. That was frustrating. Frustrating because it just wasn't really available and practical to implement because just so.

[Guy Raz]

I understand how the process is made from what I gather, basically the way non alcoholic beer traditionally was made in the US was you'd make beer and then you would just heat it up and you just basically like steam out the alcohol, right?

[Bill Shufelt]

Yeah. There's essentially burning off the alcohol. Right.

[Guy Raz]

Which means you also burn out the flavor, presumably the complexity of the hops and the barley and all that stuff.

[Bill Shufelt]

Yep. And there's other methods. But we really wanted to make great craft beer, like fully loaded, incredibly aromatic. And to that I decided to just start reading brewing textbooks. And so I went on the UC Davis, the Siebel, like all these famous brewing school websites and downloaded the whole curriculum and probably spent the next upwards of six plus months just reading all those books with the lens of okay, if I want to brew great non alcoholic beer now, what can I change here? Potentially.

[Guy Raz]

But you yourself said you were not intrinsically, you didn't feel like you were an entrepreneur. You didn't feel like you had that risk profile that you. Well, I mean you must have because you were in, you know, a trader, but you worked for a company, you had a steady income. So how does a person who doesn't call himself that, who does, who has risk aversion, which by the way, most entrepreneurs do, I should mention. How does he go get to a point where he's like, I'm going to leave this thing and do this insane other thing?

[Bill Shufelt]

Well, as I started to look around and ask people, I realized that there's like my experience was probably very common and increasingly so. I could see in the financial world that when I entered the financial world, it was a badge of honor to be coming in hungover. If you weren't hungover and out till midnight with clients, people, people would ask, what are you doing? Like, oh, you went home after work. That must have been nice, like half day. But I could see in that transition, in the 12 years I was in finance that that totally got flipped on its head. And in 2015, if you were walking in with a hangover, everyone was kind of talking about it and being like, what's this guy doing? Like the concept that people want to be a little healthier and a little more productive and a little more present with their friends and family and loved ones is I had such confidence that's going to be evergreen. But it was one of those things where I didn't talk to anyone close to home or in the market because I was being so precious with my idea.

[Guy Raz]

I thought it was such a good idea that you didn't want someone to steal it.

[Bill Shufelt]

Yeah. And I, I opened my mouth a few times about it and there was great feedback about like usage occasion, but then also very skeptical feedback about doing this as a full time job. My dad, who, his perspective of seeing my childhood, seeing me at a great college, seeing me at a top financial firm, when I told him I was thinking about doing this full time, that is taking 30 years of investment in my future and jumping off the diving board, basically. But I will say there were a few moments in that last month of 2016 which all kind of cascaded. I came home around Thanksgiving 2016, and my wife was at the kitchen table listening to Jim Cook's episode of your show.

[Guy Raz]

Great episode, by the way. Just if I say so myself, it's incredible.

[Bill Shufelt]

And she was like, I could see her just lit up. And she's like, people have done things like you're talking about in alcohol. She's like, you can do this. She was basically like, I believe your passion in it. I have watched you undergo this amazing transformation. How you talk about helping other friends get sober and get better options. This idea is a way for you to take that impact that you've had on yourself and take it to tens of millions of people. And right now I literally have the chills. And something just came over me as I said that out loud. But she was basically, if we are talking about this idea in 20 years and either someone else has done it or you haven't done it, she's like, I don't want to know you. I don't want to talk about this the rest of our life and have you not do it. She's like, I want you to walk in on the first day of the year and quit your job.

[Guy Raz]

When we come back in just a moment, Bill learns just how challenging it is to make a non alcoholic beer with very few backers and no brewer. Stay with us. I'm Guy Raz and you're listening to How I Built this. This podcast is brought to you by Squarespace. Squarespace is the all in one website platform for entrepreneurs to stand out and succeed online. Squarespace can help any business owner craft a strong web presence and sell anything from products to content to time, all in one place, all on your terms. With Squarespace Blueprint, you can build a completely personalized website optimized for every device. With powerful SEO tools that help you grow the way you want. Squarespace makes checkout seamless for your customers, accepting credit cards, PayPal and Apple Pay and in eligible countries, afterpay and Clearpay. And you can easily manage your clients and invoices, from vetting leads to receiving payments in one one streamlined, customizable workflow. So check out squarespace.com for a free trial and when you're ready to Launch, go to squarespace.combilt to save 10% off your first purchase of a website or domain. If you've been listening to me for a while, you know that I'm really interested in health and fitness and for the past year the single biggest game changer for me has been a biowearable. Why is it a game changer? Well, because it's helped me figure out which foods leave me energized and which ones make me foggy and sluggish and even hungry. And that matters because it turns out 88% of us have suboptimal metabolic health. That's why I'm so excited about Lingo. It's a new bio wearable from Abbott that tracks your glucose in real time and gives personal insights and science backed recommendations to eat in a way that works for to see how your body responds to food and learn what you can do to improve your metabolism, try Lingo. It starts at $49 for a two week plan. No prescription needed for a limited time. Save 10% off your first order by using the code HIBT@Hello Lingo.com the Lingo Glucose system is for users 18 and older, not on insulin. It is not intended for diagnosis of diseases including diabetes. For more information please visit hellolingo.com us. You know when you're shopping for like a new car or even a new bike, which I was shopping for recently, and you want to find one with all the right features, something that fits exactly what you need? Well, that's the way it feels today, trying to find the right AI tools for your business. You want to get it right, but but it's not always clear which tools are actually going to help. Grammarly is designed to fit your business's unique needs and works right away to help contribute to your overall success. Grammarly works effortlessly with the apps I already use every single day and it saves me so much time while I'm writing. With its super helpful AI prompts, Grammarly works where you work, from docs to messages to emails, integrating seamlessly across 500,000 apps and websites. No cutting, no pasting, no context switching. Join 70,000 teams and 30 million people who trust Grammarly to work faster and hit their goals while keeping their data Secure. Go to Grammarly.comenterprise to learn more Grammarly Enterprise Ready AI hey, welcome back to How I Built this. I'm Guy Raz. So it's early 2017 and Bill's wife has just convinced him to leave his safe job in finance and commit full time to launching a non alcoholic beer. So just after the new year he quits.

[Bill Shufelt]

Me and my wife had kind of mapped out a three year budget. We were dialing back our lifestyle in a major way. And I had a certain amount I was going to invest in the company itself too. A significant portion of our savings in that book.

[Guy Raz]

Right?

[Bill Shufelt]

Yeah.

[Guy Raz]

So you're now fully into this thing, but you still haven't made a product. You don't have a minimally viable product, to use a startup term. How did you start to, I mean, when you started to like, where did you go? Did you go to Linked? Like, where do you go to LinkedIn? Or is there like a beer LinkedIn? Because you have to find somebody who knows how to make beer, I'm assuming, in order to find the person who can make non alcoholic beer.

[Bill Shufelt]

So I went from a world where I had 200 really talented brokers covering me and anytime I rang the phone, wrote an email, I would get a very quick and very helpful response. And it was an always on. Like, I would wake up in the morning every day and there would be 200 emails that I would scan through to catch up. And it was a very weird feeling to roll out of bed and I would instinctively grab my phone and open my email and there would be just nothing there. So it was eerily quiet. And I started trying to network to brewers. I find a bunch of brewing conferences I'm going to attend over the next six months. And I also started looking at contract.

[Guy Raz]

Brewers because most we should make this point should be made. I would imagine that more than half of craft beers are made using contract brewers.

[Bill Shufelt]

Yeah, it totally depends on if it's a local tap room model or whatever. But I would say in broader CPG and beverage, an enormous amount of products are contract manufactured. And so me, coming from the financial world thought that was going to be the most scalable way to grow this business and not have to build brick by brick facilities all along the way. So I put this big map up on the wall and I found all these contract brewers over the country and I put pins in this map all over the wall. And me and my wife were planning out this grand trip we were going to do for the next six months as we traveled around, saw these contract brewers in person and picked the perfect one. And so I'd characterize the next three months as maybe the darkest moment of the whole journey, potentially, where I had this map on the wall and me and my wife were so excited to take this trip. And one by one, I either wouldn't hear back or I'd have a terribly disappointing phone call. And really all the pins came out of the map across the country.

[Guy Raz]

What were they saying? They were saying, no, we don't have capacity or we're not interested in nonalcoholic beer, or both.

[Bill Shufelt]

Mostly either non answer or we don't do pre revenue or we don't do non alcoholic beer was the most common. Like, I also at the time was talking to dozens of brewers at this point. I had job ads on all different message boards from Pro Brewer to the Brewers Association. I joined the Guild. And so I very quickly realized absolutely no one is responding to this non alcoholic beer job ad.

[Guy Raz]

So, well, if you're like a brewer, if you're like a, like a craft brewer in some part of the country and you've won awards and stuff, like non alcoholic beer is just, just not going to go there.

[Bill Shufelt]

Which I was shocked. I. The conversations were incredibly disheartening. There were a lot of 30 second conversations, one minute conversations. You know, I'd been used to these really busy trading floors with unlimited stimuli throughout my day to, like, days that were very quiet with my own thoughts in my home office. And I'd have like, like two to five phone calls throughout the day at most planned. And for them to end in 30 seconds and be incredibly negative and discouraging was really disheartening. And I remember reaching out to my brother and I was like, I feel like I'm standing at the end of like an alley and there's literally no pass out of this corner. I'm in. And like, I, I could have cried on the phone. And he's like, my brother. My whole family, really. My brother and my sister were like sounding boards. I used to always call them my commute about the idea. And like, he's like, let's find an area where there's an unbelievable amount of brewers. And he's like, let's go do something outdoors. And so we went all the way to the Pacific Northwest. We saw probably 15 breweries like packed in around that and flew home on the red eye on Sunday night. And even though I was exhausted, I had this unbelievable rejuvenation. I was like, you know what? If no one wants to make this beer for us, I'm going to eventually find the right person to team up with and I'm going to build it ourselves. Where we're going to actually build a.

[Guy Raz]

Brewery instead of working with a contract manufacturer, you're going to do it yourself. Okay, that makes sense. Although it's going to be expensive, but you still need to make the beer.

[Bill Shufelt]

Yeah. So I started going to brewing conferences in person and I still couldn't get anyone to talk to me at these Brewing conferences. I would go up to people left and right all day, which was exhausting and trying to get their attention. And very nice people, largely. But most of them would say, I just can't get interested in that. Like, no one's ever asked for that. You should probably do yourself a favor and, like, really reconsider this. And I remember going back to the hotel at night at a particular conference in D.C. that had probably over 10,000 craft brewers at it. And I just flopped on the bed and called my wife. I was like, I really, really tried today, but absolutely no one was interested in talking about this with me. But I was obsessed with this book, the Alchemist, during my entrepreneurial journey.

[Guy Raz]

The Paolo Coilo book, right?

[Bill Shufelt]

Yep. And the basic line is, when you're on your life's mission, the universe conspires to help you. And I kept looking, kept posting job ads, kept doing conversations, and eventually one letter came in that was very different from all the others.

[Guy Raz]

I'd received a letter responding to a job ad.

[Bill Shufelt]

Yep. John Walker, based in New Mexico, and.

[Guy Raz]

He was a brewer. And he did not respond. I think the ad he responded to did not say non alcoholic beer, right?

[Bill Shufelt]

It did not, no.

[Guy Raz]

So it just said innovative brewing brand.

[Bill Shufelt]

Yep. He was looking for, like the right long term opportunity. He liked the idea of moving to Connecticut. John had actually grown up here, even though he was in New Mexico. But he wanted to hear more about the concept and in his, like, resume also, he had won in some very prestigious medals. And so I immediately knew I was talking to the most talented person I probably talked to in the whole process.

[Guy Raz]

Yeah.

[Bill Shufelt]

And so I basically pick up the phone with John and I'm like, I'm gonna break some news, but please hang with me for five minutes. Don't hang up, and please just don't say no until Monday. Don't tell me no on the spot. And he's like, yeah, let go. I'd love to hear about it. And he lets me just riff for five or ten minutes. And I think he was just overall shocked that it's non alcoholic beer. And. But he's like, okay, I'll get back to you on Monday. And he ended up getting back to me that Sunday morning. So two or three days later on Sunday morning, and the email basically says, I was immediately gonna say no, and I was just being nice, but brilliant. And he's like, I totally see it. He's like, it sounds like such a fun innovation challenge. I've been looking for a challenge like this. It seems like a Wide open area, a potential to have a positive impact. And like the riffing he did in that email was basically like, when I read it I was like, someone sees what I'm talking about and it was amazing.

[Guy Raz]

What was that like, what was this, you know, proverbial Road to Damascus moment? Like why over the course of a weekend did you ever find out what changed his mind?

[Bill Shufelt]

I think John genuinely loved the craft beer world. He said his dad drank non alcoholic beer from time to time in his house, so it was like fairly destigmatized. But what he articulates so well is that he envisions a world in the future where his kids are turning 21 and it's just not a big deal if you're drinking or not. You can get a great beer on either side of the menu, alcohol or non alcohol. And over a series of probably 10 or 20 more touch points, I convinced him to move his family across the country. And so we met in June 2017 in person. And he moved up to Connecticut around mid August 2017.

[Guy Raz]

Wow. Okay, so you've got a brewmaster and you've got, and you know that you want to build a production facility. Did you have enough money that you had saved from your time as a trader on your own to self finance that?

[Bill Shufelt]

Absolutely not. So we had pivoted to a very capex heavy model.

[Guy Raz]

You could not make your own beer and build your own brewery without people putting in money.

[Bill Shufelt]

Exactly. So I had found us a location for that first brewery. It was a 8,000 square foot warehouse in Stratford, Connecticut and I had bought a three barrel brewing system which John immediately saw. He's like, leave that wrapped up in plastic over there. He's like, I've got my homebrew set here and we're going to just go through the scientific method. We're going to change one degree of temperature in one tank on one day until we get the reactions we like in that one tank and then we're going to go to the next one. And there are all these variables we want to control for just on the brewhouse side even before you get to fermentation. And he's like, we are going to do such small tweaks along the whole way and it's going to be hundreds of trials. So we set off doing that.

[Guy Raz]

And by the way, how much time did one batch take? Like a day, 24 hours a day. Okay, yeah.

[Bill Shufelt]

So picture two guys who barely know each other at all for nine hours a day in a warehouse. I had my laptop off to the Side, John had the boots on and was like mostly doing the brewing, which I thought I knew and I really didn't know anything about. And John and I were building something very proprietary that we couldn't talk to anyone on the outside about. So John and I could stand together in a warehouse and talk about what's really important. We talked about our families, we talked about what life we wanted out of our career in that time. We built a really thoughtful employee handbook that I still sit down with every teammate who starts to this day with, you know, we have a chance to really get the culture right and everything. So we had a lot of time on our hands.

[Guy Raz]

So you were, I mean, you were literally writing an employee handbook when you had no employees.

[Bill Shufelt]

Yep.

[Guy Raz]

And you mentioned that, okay, you're in this warehouse with these, you know, glass jugs, trying to make a prototype of what this beer would taste like. Meantime, you've got your laptop on the side. Are you also trying to take meetings with potential investors? Are you like emailing people and connections that you might have made from your days in finance?

[Bill Shufelt]

Exactly. I probably should have waited until we had beer in hand before I started doing investor meetings.

[Guy Raz]

How did you get meetings? Who did you call?

[Bill Shufelt]

General colleagues, friends and family and then networking from there. And so I had this confidence coming from the financial world that everyone from my former life was just going to invest in the concept and I'd be off and running with funding. But. But in angel investing, people write very small checks to pre revenue companies. And I know there's very high probability of loss. And a lot of people who I expected to invest and invest, I'd go out to a dinner with five to 10 people and I'd be really optimistic and get five to 10 no's. There was no momentum in the category, so I was basically raising money in a category that didn't exist, had no money. I wanted to do it in a very capital intensive way. I didn't have a product to share and so there wasn't much to really sink their teeth into besides this hundred page white paper I had and a ball of enthusiasm. And I found myself three months into those meetings and had less than 10% of what I was looking to do raised.

[Guy Raz]

You were looking for two and a half to $3 million, correct?

[Bill Shufelt]

Yeah. Yep.

[Guy Raz]

Because that's what you needed to build the brewery.

[Bill Shufelt]

Yep. And then there was just less than no momentum. And I remember at one point lying on our kitchen floor and telling my wife, like, you know, like, I'll definitely pick up John's salary for the next couple years, but maybe I should get back to finance sooner than later because.

[Guy Raz]

You were guaranteeing his salary because he had a family to support and. Right, okay.

[Bill Shufelt]

Yeah. And I had already committed to the lease to the brewing equipment with like my life savings. But before I made the next wave of investments, like did I really want to take outside capital and do this? And my wife basically immediately and without blinking was like, get off the floor. That's absolutely silly. You just have a totally different ambition and you've got to keep at it.

[Guy Raz]

When we come back in just a moment, Bill finally gets his beer into stores and when it doesn't sell, he does what any self respecting founder would do. He buys it all himself. Stay with us. I'm Guy Raz and you're listening to How I Built this. I love a great deal as much as the next Guy, but I'm not going to crawl through a bed of hot coals just to save a few bucks. It has to be easy. So when Mint Mobile said it was easy to get wireless for $15 a month with the purchase of a three month plan, I called them on it. But it turns out it really is that easy to get wireless for 15 bucks a month. In fact, the longest part of the process was the time I spent on hold waiting to break up with my old provider. To get started, go to mintmobile.combilt there you'll see that right now all three month plans are only $15 a month, including the unlimited plan. All plans come with high speed data and unlimited talk and text delivered on the nation's largest 5G network. You can use your own phone with any Mint Mobile plan and bring your phone number along with all your existing contacts. To get this new customer offer and your new three month premium wireless plan for just 15 bucks a month, go to mintmobile.combilt that's mintmobile.combilt cut your wireless bill to 15 bucks a month at mintmobile.combilt $45 upfront payment required equivalent to $15 a month new customers on first three month plan only speed slower above 40gb on unlimited plan. Additional taxes, fees and restrictions apply. See Mint Mobile for details. As a B2B marketer, you know how noisy the ad space can be. If your message isn't targeted to the right audience, it just disappears into the noise. With LinkedIn ads, you can precisely reach the professionals who are more likely to find your ad relevant. LinkedIn's targeting capabilities allow you to filter by job title, industry, company and more, and reach your customers in a respectful environment. You'll have direct access to and build relationships with decision makers. On a platform with a billion members, 130 million decision makers, and 10 million C level executives, you'll be able to drive results with targeting and measurement tools built specifically for B2B. In the technology space, LinkedIn generated two to five times higher return on ad spend than other social media platforms. And 79% of B2B content marketers said LinkedIn produces the best results for paid media. And we know this because we hear this from the founders who are on this show every single week. Start converting your B2B audience into high quality leads today. We'll even give you a $100 credit on your next campaign. Go to LinkedIn.com BuiltThis to claim your credit. That's LinkedIn.com BuiltThis, but terms and conditions apply. LinkedIn, the place to be. To be. Hey, welcome back to How I Built this. I'm Guy raz. So it's 2017 and Bill is trying to raise money to build a brewery. But so far he's only gotten a fraction of what he needs. And then after he meets with like 50 investors, a breakthrough, a turning point came.

[Bill Shufelt]

And it wasn't like I got a huge commitment, but a college friend set up a dinner with four of his local friends in Brooklyn and they all just like, let me talk about the idea for a couple hours. And I was so enthusiastic. And all five guys committed $5,000 each, which very small progress towards our goal, but, like, an amazing turn in momentum for me. And I walked out of that dinner with like, just like, I felt like I was walking on air. And over the next six months, a lot of people who had said no were like, you know, I'm still not interested. It's not fit for me. But you got to talk to this guy. I was talking to someone and I just mentioned your idea and like, I know you don't know him, but we do a phone call with them. I ended up doing 120 investor meetings. 66 individuals supported us in the angel round. And that group of investors has been some of our best ambassadors. Our believers have given us great leads over the years, have been through us throughout the whole roller coaster. Yeah.

[Guy Raz]

What was the valuation of the company during that angel round?

[Bill Shufelt]

So it was basically, it had a toggle. If we never got off the ground. I was trying to ensure investors would get their money back. But if it did get off the ground, it would toggle to $5 million.

[Guy Raz]

Right. So pretty, pretty good. So you weren't. I don't. I would say you were not overvaluing your business at that point because some people started, you know, we're valuing it at $10 million.

[Bill Shufelt]

Yeah. And this was on in 2017 still. So like a ways before the craziest years of fundraising for sure.

[Guy Raz]

Yeah.

[Bill Shufelt]

And as we're exiting 2017, all of a sudden the beer was tasting really good. Like John had really started to dial in all these like 10 changes to the brewing process. We ended up ultimate to come up with our process. And then so the beer was tasting great and I was like, let's start construction. And we're underway in construction. John moved the home brewing kits to his parents garage about 40 miles up the street. And we started bottling the beer in.

[Guy Raz]

His parents garage in bottles or in cans.

[Bill Shufelt]

So it was just into like blank brown bottles.

[Guy Raz]

Right. And did you have a name at that point or not yet?

[Bill Shufelt]

We did. The name Athletic was a huge decision. I went through hundreds of names, Latin names, geographic names, silly names, totally made up words. I really liked the number eight at one point. So it was going to be like liberate and all these words that could have theoretically ended in eight. Thank goodness. Our legal counsel, whether they were trademarked or not, I think he might have been shooting down a lot of just bad names looking out for me. But we chose that name Athletic because we are building in a category that had never had any positivity to it. And I wanted it to be something that was aspirational, positive, that people could hold in their hand for the first time and be really proud of what they were holding. Active lifestyle tones, which really came out of my lifestyle. But also I want it to be a really recognizable word with a hard sound in it that like, you know, you could really hear in a loud bar, restaurant. And I think this. Checked all those boxes.

[Guy Raz]

And did you think of this? I'm assuming you also didn't want this to be like, you know, perceived as like an AA brand or, you know, a teetotaller brand, but maybe not even like a non alcoholic brand, but a brand that people might just, you know, you might have regular beer, wine, you know, a couple times a week, but this is what you would have on a weeknight.

[Bill Shufelt]

Yeah. So I, I have a huge amount of respect for the recovery world, but I also never wanted to market to those communities because I don't want to tempt anyone into bars who may be vulnerable or susceptible to taste. And we just wanted to lift it up as like a place of Positivity to make moderation cool and accessible. And that was something John actually said. We are never going to market with this beer and I'm not signing on with you if you're going to force me to market with a bad beer, if we can't make it indistinguishable from full strength alcoholic beer.

[Guy Raz]

Okay, now you started to get, I guess by 2018, the middle of 2018, this product was. John felt it was like it was ready, that it was good and you had a great product.

[Bill Shufelt]

Yeah. So November, December 2017, we're deciding the beer is tasting really good and We Soft Circle May 2018 as our launch so that we're on market for the summer of 2018. So we've got to do all our construction and tank installations at the facility in four months, get that up and running. And then on the outside world is when I need to start going to market, convincing retailers, convincing distributors. And I had some preliminary conversations with distributors and there really wasn't any interest in the industry because you need distributors.

[Guy Raz]

To get into stores. You cannot do it otherwise. I mean it's almost impossible without a distributor.

[Bill Shufelt]

I needed to convince beer distributors that they needed this product and it's going to be a big part of their future. And so John and I would hand bottle beer in his parents garage. And at this time in the winter In Connecticut, it's 30, 40 degrees and our hands are absolutely freezing doing this. So we'd spend the morning doing that and then I'd hit the road with fresh beer for the afternoon and would go all over the state of Connecticut and I would just sample the owners or the bartenders or the attendants. And overall the feedback was, I'd say, very negative.

[Guy Raz]

By the way, did people ever get mad, especially people in the beer industry. It could be like a third rail, like what, are you trying to undermine our industry? Did you ever get that kind of reaction?

[Bill Shufelt]

I mostly got that from the distributor tier and bartenders where they thought it would be a one for one cannibalization. But non alcoholic beer, I was telling them, is something that people are still going to drink their beer or their cocktail like one night a week when they go out to dinner or do something fun. But this is a beer people are going to drink seven nights a week at home. They're going to drink at different hours of the day. We're going to have totally new consumers coming into the category and shopping the beer shelf for the first time.

[Guy Raz]

You were trying to say our competitors are not other beers. It's like Non alcoholic beverages. It's soda, it's sparkling water. Is that what you were saying?

[Bill Shufelt]

Yeah. It's like a generational unlock of new occasions and new populations. And people basically met that with like, yeah, sure, okay, like, prove it. And I would go out and talk to dozens of retailers, and I got a lot of nos, but I got a lot of enthusiastic yeses also. And over time, I built 300 commitments in the state of Connecticut.

[Guy Raz]

These were just mainly individual stores.

[Bill Shufelt]

Yep. Up and down the street, retailers, bars and restaurants.

[Guy Raz]

I mean, that's a lot of work.

[Bill Shufelt]

That's like weeks and weeks. And there were days where I would get like five no's in a row, and then at that next place, or I would walk back out to the parking lot and grab someone and say, I'm having a really tough day. Do you mind following me in and having some fun with this? And I'd have people come up behind me as I was sampling the owner and pretend they overheard and be like, did you say 50 calories? Like a great tasting beer and 50 calories? I gotta try that. And, like, have them, like, literally reach over my shoulder and try it. And yeah, even though I was having fun with it, I had the survey work to know people in that area really wanted it. So I had confidence that if we got on the shelf, it was gonna sell.

[Guy Raz]

Yeah. And I guess not that long after you got into some of those smaller stores in Connecticut, you had a pretty significant breakthrough with Whole Foods. How did that happen?

[Bill Shufelt]

So in December 2017, I was sampling a local Whole Foods beer manager, and they said, you should really go down to the Brooklyn store and meet the Forager, who has a bit more decision making authority. And so the next day, I drove to Brooklyn, tracked down the Forager. It turned out to be her last day. And she gave me, like a few minutes of her time and we sampled the beer. She said, this is incredible. Our customers would love this. She's like, you've got to go to regional next week. And so she made me an appointment for the following week with Chris and Justin at the Whole Foods regional office in New Jersey. And that meeting went well. And that was our biggest breakthrough, I'd say, early on, where they committed basically on the spot to a statewide launch in Connecticut.

[Guy Raz]

Wow. Okay. Now, getting in Whole Foods, especially with a product like this, is a huge coup, but you still have the challenge of getting people to buy it. Right. It's not like liquid death where you see a can of this thing and you're like, what is this? And you pick it up. I mean, over the last few years, a lot of craft breweries have shut down, because we can talk about this later, but beer consumption, to your benefit, has fallen in the United States over the last decade. How are you going to get people to be aware of it? I mean, you still, even if you're in Whole Foods and you've got a tiny little space in the refrigerated section, how are you gonna get people to even know what it is?

[Bill Shufelt]

So I did a mix of grocery sampling, store samplings, everything. But I found in those moments, I was really only interacting with, like, 20 people and, like, a pretty low hit rate. And I just started to think about my life and, like, where would I like to see a beer? And I'd run a number of spartan races and half marathons and, like, at all those things, I would have loved a beer, just not the alcohol. And at those places, people are happy, sweaty, thirsty. They want to celebrate. And so I started reaching out to local race directors and saying, can I show up? I'm going to run your race, but can I bring a beer, a cooler of a bunch of beer and hand them out? And so many people were like, I've been organizing this race for 20 years. It finishes out of high school. We can't have beer. And I've been dying to have beer at it for 20 years.

[Guy Raz]

Right, so you were basically able to go there and just hand out cans of beer to people at the finish line.

[Bill Shufelt]

Yep. And that first summer, to my wife's chagrin, I sampled at 75 athletic events. I was waking up at 3am on Saturday and Sunday and driving and setting up the tent. And my thought was targeting these races and these populations was if I can get the healthiest people in every community, the most aspirational people, to drink our beer, that's going to filter out from there. But like, it went from at these sampling events, I would get nothing but made fun of, too. And I can tell you more about that.

[Guy Raz]

Yeah, please.

[Bill Shufelt]

I was set up at these 75 athletic events, and there were some events where waves of people would come through and there'd be some passionate people who stood around the table. But there were a lot of days, and probably more than I'd like to admit, that no one would talk to me for hours. And I think those days were almost more formative to me than the really good days, because if only one or two people is approaching you every 20 or 30 minutes and you have a bad interaction or you don't really get your point, across or your pitch falls flat. You learn to iterate really quickly if you don't have many opportunities. And the second I could get a beer in someone's hand, very often within a minute, they would go from making fun of me to just rattling off occasions where they could see themselves drinking it and where can I buy it? And I really got to know our customers face to face also in that time.

[Guy Raz]

Yeah. All right, so how did that whole. I mean, so now you're in Whole Foods, I think by what, by the end of 2018, you're in whole Foods.

[Bill Shufelt]

Yep. So we launched retail in June of 2018, and Whole Foods and Total Wine were some of the first retailers to take us out to a statewide footprint in Connecticut.

[Guy Raz]

And how did it do?

[Bill Shufelt]

Like everything else in the athletic store, it was. The Boulder was at a standstill at first, and we had to get it rolling. There were definitely times where on Sunday I would roll through a bunch of stores and clear out the shelf to make sure there were reorders the coming week.

[Guy Raz]

You yourself would do that in the.

[Bill Shufelt]

Early days, for sure.

[Guy Raz]

You would go and just buy a bunch of beer.

[Bill Shufelt]

Oh. For key retailers, I wanted to make sure kept our. Like I would. There were days where I'd have 12 athletic six packs in my cart. Going back to a car that already has 56 packs in it. Yeah.

[Guy Raz]

By the way, Sara Blakely did this with Spanx at the beginning. I mean, this is a. You know, you gotta do what you gotta do.

[Bill Shufelt]

Yeah.

[Guy Raz]

All right. So you're buying your own beer. And so they keep reordering, but at a certain point, you can't just buy your own beer back. Like, you need people to buy it. So what do you think happened? Like, how did the tide start to turn?

[Bill Shufelt]

Yeah, so the summer of 2018 started to go pretty well at the end of the summer, and we hit January and it went vertical. And all of a sudden, our distributors, as we came around the corner towards our first full summer on the market in 2019, we went from nobody talking to us, everybody making fun of us in 2018, to the biggest shortage of non alcoholic beer in 2019, we're staring down a summer where we are just very clearly out of stock. So for that summer of 2019, we brought in a wave of bigger tanks and doubled our capacity. And we outgrew that three months later. And so we're out of stock again after three months and doubling our capacity. And then we started to look further and further afield for a new brewery that we could grow into.

[Guy Raz]

Okay. You start to get quite a bit of traction by the summer of 2019, and the demand is outstripping your production. You cannot make enough beer right at this point, what was going on? I mean, this seems like a good problem to have, but it actually was, I imagine it was not a good problem at all.

[Bill Shufelt]

Yeah, so we opened the doors with four teammates at Athletic Brewing. So we hired 20 more people in 2019. We built a sales force all over New England at this time. We also had a couple incredible investors join our team and we raised a Series A in March 2019. John did an incredible job scaling the manufacturing and supply chain in house. And, you know, if you go back to then, the non alcoholic beer category had been nothing but lagers. And all of a sudden there's this craft brewery in Connecticut that's launching with a full flavor lineup of IPAs, golden ale stouts. And every week I would mention something to John. I'd say, you know, it's so hot out, should we make like a great fruit stand summer beer? And John would like literally stop at the farmer's market and make like a BlackBerry Berliner Weiss or a Raspberry Sour. And so we had built this e commerce business over this time where so like beer had never been available on the Internet essentially before. And we started to list these beers every Monday at 5:00pm and so our customer base that was slowly growing national started to expect us to have a new beer that was like new to non alcoholic beer style, available online nationally at 5pm on Mondays. And we were selling out these beers in like 30 seconds. It was like, wow, it was like a concert going online on Ticketmaster.

[Guy Raz]

I mean, it's kind of remarkable because two things started to happen. This is the, you know, around this time, 2020 would be supercharged. One was alcohol consumption, just spikes in 2020 during the pandemic, which proved to be a blip. People thought it was a long term trend, but it proved to be a blip. But non alcoholic beverages also started to explode. I mean, to the point where you start to see all kinds of brands coming out. Non alcoholic spirits and wines and mixed drinks and all these interesting alternatives. And it's almost like you had some kind of premonition.

[Bill Shufelt]

Well, 2020 was such an interesting time for so many reasons, and it's a miracle we survived as a business. We made the biggest financial investment we've ever made. On March 17, 2020, John and I committed to purchasing a brewery 3,000 miles away in San Diego. And when a lot of our competition stood still, like big corporates, we very safely, with respect to our teammates, were able to move really fast. We were well financed. We had a lot of business momentum. From March 2020 to two years later, we went from about 26 teammates to 120 teammates to 220 teammates. The year after spanning the two breweries, by the time 2022 was over, we'd built a brewery on the east coast that was 50 times as big as that original brewery as well.

[Guy Raz]

Wow. I mean, it's kind of remarkable because it's like an overnight success story, which really took a long time. I mean, you started this idea in 2015. In July of 2024, you raised a round that valued the company at $800 million. I read that you guys were one of the top 10 biggest craft breweries in the US which I guess we should put into perspective because craft beer is still a tiny fraction of all the beer sold. Jim Cook jokes that Coors and Budweiser spill more beer than they sell every year. But still, I mean, we're not talking about non alcoholic breweries, we're talking about all craft breweries. You're in the top 10 in terms of volume.

[Bill Shufelt]

Yeah. Athletic is top 10 crappers number one, biggest non alcoholic beer brewers. But even though it feels like we've come a long way, we are so early in this seismic tide shift that's happening. Non alcoholic beer overall is still only 1.5% of beer, which overall has grown 5x since we started. But in most channels it's grown well over 10x. And they're certainly certain channels and national retailers where non alcoholic beer is now over 10% of all beer.

[Guy Raz]

Yeah. When you were getting into this space. Not that long ago. Right. We're talking about seven years ago when you left your job, and eight, six years ago when you launched it. Since then, there's been an explosion of non alcoholic, not just beverages, but beers. And some of the big players have gotten into this space. There are good things about that. Right. Because it just. Right. Rising Tide floats all boats, but that means there's more competition. How do you think about staying ahead of the competition when you know you've gone from basically being the only one out there to now being one of many.

[Bill Shufelt]

So I think it's awesome. Like 10 years ago when I used to go to a bar, restaurant or anywhere, there was nothing. And now you can open a menu and brands are permissioned to put their biggest name brand into the category. So there's flagships of all kinds of beer brands, all kinds of spirits. All kinds of wine brands are getting there. So like Bill, the consumer absolutely loves that. And I think about this in a very positive some way. I non alcoholic beer is 1.5% of beer. I say publicly it's going to 10 to 20% of beer, but like you.

[Guy Raz]

Think it's going to be 10 to 20% of beer?

[Bill Shufelt]

In my head I think it's going to be over 50% of beer.

[Guy Raz]

But you think over 50% of beer consumption is going to be non alcoholic.

[Bill Shufelt]

And I have almost no doubt around that. Like it is like humans are not drinking alcohol 99% of the time. They're awake. And I see people interact with our beer at all different times, all different occasions and like the occasion base is enormous for non alcoholic beverages and very restricted for alcohol. So we're confident that we're sitting on the term disruption is thrown around so often. But alcohol being in adult beverages is a 5,000 plus year trend. And I think time is such an overlooked variable where the force of compounding over time is just so powerful. So more and more people will keep coming around to it.

[Guy Raz]

When you think about the journey you took and where you got to, now you've got a company that's now valued at $800 million and growing west coast facility, east coast facility. Everything that happened, I mean meeting John and him agreeing to work with you and where you are now, how much of where you are do you attribute to the work and the skill? And what do you attribute? Where does luck come into this story?

[Bill Shufelt]

It's unbelievable. As I get farther into the journey, I keep going back to the book the Alchemist and when you're on your life's mission, the universe conspires to help you. And this has been such a lucky, fortuitous journey. And there hasn't been a moment where I've been like, I shouldn't have done this. I think finding John as a co founder has been one of the most important things of the whole journey because we've seen some of the craziest stuff I could possibly imagine in the last seven years and not once have we raised our voices with each other. It's always just like running at these challenges, tackling them together and doing the hardest things and doing them right has been really intellectually challenging and fun. And like, I realized that like you actually can love what you do as an adult.

[Guy Raz]

That's building. Shufelt co founder of Athletic Brewing Co. By the way, not long ago Athletic Brewing became the first official non alcoholic beer of one of the biggest soccer teams in the world, Arsenal in England's Premier League. And even though English soccer fans are known to consume a bit too much beer, apparently non alcoholic beer consumption is up nearly 40% in the country, especially on game days. Hey, thanks so much for listening to the show this week. Please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs, sign up for my [e-mail] this episode was produced by JC Howard with music composed by Ramtin Arablouei. It was edited by Neba Grant with research help from Katherine Cipher. Our audio engineers were Robert Rodriguez and Gilly Moon. Our production staff also includes Alex Chung, Carla Estevez, Sam Paulson, Devin Schwartz, Chris Messini, Kerry Thompson, John Isabella, and Elaine Coates. I'm Guy Raz and you've been listening to How I Built this. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short [e-mail] survey Klaviyo powers smarter digital relationships from more than 151,000 successful brands, including Hedley and Bennett, Fishwife and Dagny Dover. Klaviyo's unified data and marketing automation platform turns your customer into personalized connections to make every moment count across AI powered email, SMS analytics, and more. Build smarter digital relationships with your customers. Visit klaviyo.com to make every moment count.