Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How a Family-Owned Brewery Pivoted to Non-Alcoholic Beer
Transcript
- Lucas: So, Luna, you know how every big beer brand has jumped on the non-alcoholic bandwagon over the last couple of years? Luna: Sure, I've seen the ads. Athletic Brewing, Heineken zero, all that. But what's the story here? Lucas: Well, the story is a one-hundred-and-twenty-year-old family brewery that made the pivot years before it was trendy, and it's paying off in a big way. I'm talking about the Haas family and their brewery, Haas & Sons, based in a small town in Wisconsin. Luna: Haas & Sons. I think I've seen their old-school lagers in the Midwest. But non-alcoholic? That seems like a huge gamble for a legacy brand. Lucas: It was a massive gamble. In 2018, the great-grandson, Max Haas, took over as CEO. The company was still profitable, but sales had been flat for a decade. Craft breweries were eating their lunch, and the big guys were pushing them off the shelves. Luna: So what did he do? Did he just flip the switch and start brewing near-beer? Lucas: Not exactly. He spent two years researching, and he realized something: the non-alcoholic category was growing, but most products tasted like watered-down soda. People wanted the taste of real beer without the alcohol. So he invested in a state of the art dealcoholization system that uses a low-temperature vacuum process to remove alcohol after fermentation. It preserves the hop profile and mouthfeel. Luna: That sounds expensive. How did he convince the family to go along with that? Lucas: That's the interesting part. He didn't have to convince them all at once. He started with a pilot line, just one non-alcoholic pale ale called 'Reviver.' They launched it in 2021, and it sold out in three weeks. That got everyone's attention. Luna: Okay, so that's a nice little experiment. But how did it turn into a full pivot? Lucas: Well, the pale ale did well, but the real breakthrough came when they realized they could use the same process on their flagship lager. They released a non-alcoholic version of their classic lager, and it won a couple of industry awards. That gave them credibility. Suddenly, they weren't just a novelty; they were a serious player. Luna: And what did that do to their overall business? Did it cannibalize their regular sales? Lucas: That's the million-dollar question, right? And the answer is, surprisingly, no. In fact, their alcoholic sales actually went up slightly. They found that people who bought the non-alcoholic version were often new customers, maybe people who were cutting back on drinking, or younger folks who didn't want alcohol at all. And some of those people started trying their regular beer too. Luna: So it's a halo effect. That's smart. But what about the distribution? How did they get shelf space in a market dominated by giants? Lucas: They played the long game. They focused on regional grocery chains and independent liquor stores first, offering tastings and partnering with local bars that wanted a non-alcoholic option. They also made a big push on their website, selling directly to consumers, which a lot of legacy breweries hadn't really embraced. Luna: And what's the end result? Are we talking about a successful pivot or a massive flop? Lucas: So far, it's a win. By the end of this year, non-alcoholic products are expected to account for over forty percent of Haas & Sons' total revenue. That's up from almost nothing four years ago. And the company has grown overall by about fifteen percent annually since the pivot. Not bad for a brewery that was basically stagnant. Luna: Wow, forty percent. That's not just a side project anymore. That's a whole new business model. Lucas: Exactly. And it's not just about the product. They've repositioned the entire brand. Their marketing now focuses on 'the taste of tradition, without the buzz.' They sponsor local marathons and wellness events. They even have a line of non-alcoholic hop water for athletes. Luna: So they're not just selling a drink; they're selling a lifestyle. That's a classic brand pivot. Lucas: Right. And the interesting thing is, they didn't abandon their heritage. They still brew their original lagers, and they still sell them. But they've shifted their growth engine to a product that aligns with where consumer preferences are heading. It's a lesson in reading the market without throwing away what made you successful. Luna: Honestly, this is the kind of story I could talk about for hours. And you know, if today's episode gave you a bit of that same spark, that 'aha' moment, maybe consider supporting the show. It's what keeps these conversations going, ad-free. If it was worth a coffee to you, that's the link: buy me a coffee dot com slash fexingo. Lucas: Yeah, that's really it. Every little bit helps us keep digging into stories like this. But back to Haas & Sons for a sec, because there's one more angle I want to get into. Luna: What's that? Lucas: The role of the family itself. Max Haas had to navigate the egos and traditions of a multi-generational family business. That's not easy. He had to convince his father and uncle, who were still on the board, that this was the right move. And he did it by showing data, not just gut feeling. Luna: Data over tradition. That's a hard sell in a family that's been doing the same thing for over a century. Lucas: It was. He presented a detailed market analysis showing that the non-alcoholic segment was growing at a double-digit rate, while their traditional market was shrinking. He also brought in a consultant who had worked with other legacy brands to validate the strategy. It took a year of meetings, but eventually, they gave him the green light. Luna: So it wasn't just a business pivot; it was a family management pivot too. How did he handle the inevitable pushback when things got tough? Lucas: Well, there were definitely moments of doubt. In the first year, they had production issues, and a batch of their non-alcoholic lager came out tasting sour. They had to throw away thousands of bottles, and his uncle was ready to pull the plug. But Max insisted on fixing the process, and they eventually got it right. He also set up a separate profit and loss statement for the non-alcoholic line, so the family could see it as a separate venture, not just a drain on the main business. Luna: That's a smart governance move. It's like having an internal startup. Lucas: Exactly. And that internal startup is now the growth engine. The brewery is planning to expand its production facility, and they're looking at exporting to Europe, where non-alcoholic beer is even more popular. It's a far cry from the struggling regional brand they were in 2018. Luna: So what's the takeaway for other businesses listening? Is it just 'follow the trends'? Lucas: I think it's more nuanced. It's about identifying a durable shift in consumer behavior, not a fad. And then having the courage to invest in the capabilities to serve that shift, even if it means changing your core product. But also, it's about doing it incrementally, testing the waters, and using data to bring people along. Luna: And maybe it's also about not being too proud to admit that your old way of doing things might not be the future. Lucas: That's the hardest part for a family business. But Haas & Sons showed that you can honor your past while embracing the future. And that's a pivot worth raising a glass to, even if it's zero-proof. Luna: Cheers to that. Okay, next time we're going to look at a completely different kind of pivot, something in the tech world that might surprise you. Thanks for listening, everyone.