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April 20, 2022

Low/No Alcohol Wines w/ BevZero's Debbie Novograd & Kayla Winter

Low/No Alcohol Wines w/ BevZero's Debbie Novograd & Kayla Winter

The low and no alcohol wine space is growing rapidly. Enough so that a company specializing in spinning cone technology to reduce alcohol, ConeTech, changed their name to BevZero.


The low and no alcohol wine space is growing rapidly. Enough so that a company specializing in spinning cone technology to reduce alcohol, ConeTech, changed its name to BevZero. Debbie Novograd, CEO, and Kayla Winter, Director of Product Services & Winemaking, discuss the technology, the challenges of producing good no alcohol wine, and the market for low and no alcohol wines.  

 

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Detailed Show Notes: 

Alcohol reduction technologies

  • Reverse Osmosis - pass wine through filters, removes water and alcohol, can only bring down abv by a few % per pass, requires multiple passes to get to 0% (more taken out of the wine)
  • Spinning Cones - creates thin film vacuum distillation with heat added (37C) to extract alcohol w/o cooking wine, only spends a few seconds in still

BevZero history

  • Founded in 1991 as ConeTech as a tool in the winemaker’s toolbelt to adjust alcohol to hit a “sweet spot”
  • Before 2018, >14% abv wines had a higher excise tax, alcohol reduction used to bring wines below 14%

Spinning Cone technology

  • Can pull off different substances with different molecular weights (more than alcohol if desired)
  • Small units (1,000L/hour) start at $1.5M
  • GoLo tech starts at $500-650k

Definitions

  • Low alcohol wine: 5.5-10% abv
  • No alcohol wine: 0-0.5% abv

Uses of technology by geography

  • Europe - 99% for 0% abv products
  • USA - until 2 years ago - 90% for alc adjustment, 10% for low/no alc
  • USA - 2022 - 30% low/no alc -> 50% in 2023
  • Very large players doing adjustment
  • No alc - mostly startups, recently, big players interested

Market Sizing

  • Non-alc space $2B in 2021 -> forecasts range from $3.5 - 6B over next 10 years
  • IWSR projects no/low growing faster (7% CAGR) vs. alcohol (1% CAGR)
  • Wine has been slower growth 
  • North America no alc wine market - $450M in 2021
  • Low alc mainly US (bigger than no alc) and Australia
  • No alc beer - 75% of total space

Producing no alc wine challenging

  • Need suitable grape varieties for base wine - fruit-forward and aromatic work best
  • Acid, color, tannin get concentrated
  • Sparkling does well; bubbles mask the lack of weight (bubbles through forced carbonation)
  • No alc is an FDA product - can add more ingredients (e.g., natural flavors, mouthfeel agents), must have a nutritional panel
  • Initial no alc wines used bad base wine and added lots of sugar to compensate
  • Many sweeten with grape juice concentrate, but trend is towards less sweet (now ~high 20g/L sugar)

Price points

  • Original products were $5-6/bottle, now up to $30/bottle
  • Majority are in the $10-15/bottle range, largest customer does still & sparkling wine in the $25-30/bottle range

Consumer use cases

  • Main segment (70%) - people who still drink alcohol, drink both low and no alc wines
  • Abstainers a small %
  • Gen Z pushing growth
  • Low alc targets lower calorie, lower carb segment
  • Meets a ritualistic need that non-alc fills

Branding and sales

  • No alc startups sell DTC, leveraging social media marketing
  • Low alc has some big players - 50/50 develop new brands, some use existing
  • Specialty online retailers for low/no alc

Higher quality products will drive future growth

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