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 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