Denver's craft breweries are increasingly offering nonalcoholic beer and spirits options.

• Recently, there has been a rise in the production of nonalcoholic beer and spirits in Denver, which is known for its craft breweries.
• Local breweries noted that the interest in their products is partly due to the active and health-conscious lifestyles of Denver residents.

CNBC's new quarterly Cities of Success series examines cities that have evolved into thriving business centers, drawing in capital, corporations, and talent due to their entrepreneurial mindset.

The number of alcohol-free beverage options has increased significantly in recent years, particularly in the form of nonalcoholic beer in Denver, a city known for its craft breweries.

Breweries in the city, situated in the Rocky Mountains, are shifting towards offering more inclusive beverages as the alcohol-free trend gains popularity.

The percentage of nonalcoholic options on menus increased by more than 55% from the fourth quarter of 2022 to the same period in 2023, as per data from Technomic, a food service research and consulting firm.

Since the launch of O'Doul's in 1990, nonalcoholic beers have been available. However, recent interest in these beverages has increased significantly, mainly due to younger and health-conscious consumers, resulting in a boom in the sector, according to Technomic.

Nonalcoholic beer volumes are predicted to increase by approximately 25% between 2022 and 2026, according to IWSR data.

In 2023, according to NielsenIQ's consumer buying behavior database, Colorado was the second-highest state in terms of nonalcoholic beverage investment.

"As Denver is a city with a growing population of health-conscious individuals, there is an increasing demand for nonalcoholic and alcohol-free beverages. Keith Villa, co-founder and brewmaster of Ceria Brewing Company in Colorado, has observed this trend and is seeing more people become educated about the benefits of these products."

Villa and his wife, Jodi, launched Ceria in 2018, focusing solely on the growing alcohol-free beer market, which has been particularly popular among younger consumers, according to Villa.

Villa stated that nonalcoholic and alcohol-free beer can be produced using four methods: vacuum distillation, filtration, specialty yeast, or creating a low-alcohol beer and diluting it with water. However, these processes are costly and time-consuming, making it challenging for breweries to produce nonalcoholic spirits.

As beer consumption decreases, more breweries in Denver are following the trend.

"Craft brewers are facing challenges in the market, so they are turning to nonalcoholic beers to generate revenue. However, these beers must be made carefully to meet consumer demand. By working together and ensuring quality control, we can provide safe and enjoyable options for consumers."

Denver's beer scene

According to Kara Nielsen, a food trend expert, the increasing popularity of nonalcoholic beer and spirits in Denver aligns with the city's identity as a beer-focused metropolis.

"Nielsen, who used to reside in Denver, stated that people in the city enjoy playing hard and then celebrating. In recent years, there has been an increase in the production of high-quality nonalcoholic beers, including those from Colorado breweries. As a result, individuals now have more options when it comes to choosing their beverages."

Grüvi, a Denver-based brewery, has been successful since its founding five years ago due to its wide range of nonalcoholic offerings. Co-founder Niki Sawni stated that the company chose Colorado as its base because of the state's residents' preference for a healthier lifestyle and the potential for growth in the alcohol-free market.

Initially, Sawni's customers were health-conscious consumers. However, he stated that nonalcoholic and alcohol-free beer became trendy, drawing in more mainstream customers. As a result, almost every bar or restaurant in the area began to offer zero-proof options.

"Sawni explained that the realization that there was a gap in the market for non-alcoholic beverages led to the creation of "Grüvi," a fun and playful brand that aims to make nonalcoholic products more popular."

Sawni noted that as his company has achieved success, he has observed a positive trend among larger, established alcoholic breweries that are collaborating with him in a "symbiotic relationship" without resulting in competition.

Denver Beer Co., founded 13 years ago with a single taproom, now has multiple taprooms and offers sparkling hop water, a nonalcoholic alternative, on its menus.

""As a beer company, we recognize the demand for nonalcoholic products among consumers, and we want to be inclusive by offering a space for everyone to enjoy," CEO Robert MacEachern stated."

The nonalcoholic trend has enabled Denver Beer Co. to maintain its core identity while catering to its customers' preferences. MacEachern observed that run and bike clubs, particularly those that meet in the summer, are increasingly interested in nonalcoholic beverages that provide a refreshing experience in the taproom.

Hop water has become an integral part of the company's identity, alongside alcoholic beer.

"Denver is the hub of the craft beer industry, and we're deeply entrenched in it. The people of Denver are open to change and innovation, which has allowed us to thrive amidst the growing trend of nonalcoholic beer. We will continue to strengthen our brand and reputation, not just for ourselves, but for all craft beer companies. Nonalcoholic beer is not a replacement for who we are, but rather an addition to our identity."