In this series, we ask some of Canada’s Top Growing companies to share advice on finding new and innovative routes to success in an unpredictable business environment.
When Ted Fleming was diagnosed with Crohn’s disease over a decade ago, it forced him to make some significant lifestyle changes. Giving up alcohol was one of them, and he found that not being able to enjoy drinks with friends cast an unwelcome shadow over his social life. Centuries of time and effort have been poured into the creation of beers, wines and liquors with alcohol, but Mr. Fleming found that alternatives with the same sophistication proved scarce.
“I looked to non-alcoholic beer to satisfy any taste cravings I’d have. It was also an important part of me feeling comfortable in social situations like weddings or holidays,” Mr. Fleming says. “It was difficult to give that up.”
As Mr. Fleming researched his options, he found there was a community of other people facing the same dilemma. They bonded around an online shop Mr. Fleming launched in 2012 that imported alcohol-free wines and spirits from Europe.
As demand for non-alcoholic beer grew among Mr. Fleming’s customers, he discovered that it was particularly challenging to source quality craft beer from abroad, and even harder to import it. Five years later, Mr. Fleming decided to fill the market gap another way, and began to brew alcohol-free beer himself. Those efforts laid the foundation for Calgary-based non-alcoholic beer company, Partake Brewing. The company hit 28th on The Globe and Mail’s Top Growing Companies list this year, with revenue growth over the past three years of more than 2,000 per cent.
“The concept of what I was doing was still pretty unique. People hadn’t caught on to the non-alcoholic beer market, so I had to put my own money behind it for quite a while,” he says. “Then we did a Kickstarter campaign and it helped us leverage the community I built. We had a group of passionate fans who came to the table to support the idea.”
Mr. Fleming likens people looking for booze-free beer to flexitarians: those who only eat meat on rare occasions. He says a new generation of health-conscious consumers are interested in changing their relationship with alcohol, and while they may not be completely sober, they don’t treat frequent drinking as an inevitable part of adulthood like the generations before them.
”Millennials and Gen Z are both health and wellness focused generations. They reject that long-standing messaging from the alcohol industry saying if you don’t drink, you can’t have fun, or be cool and accepted. Younger consumers are pushing back against that and are charting their own course and doing their own research,” he says.
Partake’s first offering was an India Pale Ale or IPA – a bitter beer that doesn’t have the same widespread appeal as an easy-drinking lager. Eager to support the budding company, even non-IPA drinkers purchased beer during the campaign, just to help Mr. Fleming fundraise.
”People were sending me messages saying they were buying it even though they didn’t like IPAs, because they knew I’d eventually be able to make the style of non-alcoholic beer they do like down the line,” he explains.
Motivated by the success of his first campaign, which supplemented personal assets Mr. Fleming had put on the line to launch Partake, he teamed up with a venture capital firm to put forth a more formal attempt at approaching investors. His first fundraising round brought in US$4-million.
“When we raised that first round of money, all the years of toil and putting up my personal assets behind this felt worth it,” Mr. Fleming says.
”Last year, we passed $10-million in sales, and we’ve continued to accelerate. It speaks to the strengths of the team, our community and our retail partners. Next year, we’ll be at over $10-million in Canadian sales alone, and we’ve just begun to distribute in over 20 U.S. states,” he says.
”We want to be seen as leaders in the non-alcoholic beer industry, even against some of the bigger companies, and we want to be seen as the pioneers. We have some big goals – we’d love to be a company that does over $100-million in sales.”
In the five years since Partake’s founding, competition in the non-alcoholic beer market has been steadily mounting. In 2020, non-alcoholic and low-alcohol beer sales saw a 30-per-cent surge, even with restaurants buying less alcohol because of the pandemic.
Heineken 0.0 is the industry leader in sales, according to IWSR, a drinks industry analytics firm, leaving craft brews with significant competition for the industry’s top spot.
Still, Mr. Fleming’s faith in Partake isn’t wavering. He says his lived experience with Crohn’s disease brings something unique to Partake’s market presence that other companies can’t duplicate.
”We were the first to market to solve this problem, and it was because I was personally experiencing a problem that a lot of other people were also experiencing. A lot of competitors are jumping into the category, but we have that authenticity,” he says.
The company has enjoyed its share of accolades for both its approach to business and brewing. While Mr. Fleming says he’s honoured by praise for being an innovative Canadian startup, he’s most heartened by winning the coveted World’s Best Style award at the World Beer Awards competition.
”At the end of the day, we’re in the product business, so to know you’re the best in the world, it really doesn’t get better than that.”