CPG Playbook   //   April 10, 2024

New sparkling water brand Not Beer wants to capitalize on Liquid Death’s popularity

A new sparkling water brand called Not Beer is capitalizing on the popularity of canned water that’s packaged like alcohol.

Not Beer is marketing itself as a “zero beer taste” non-alcoholic drink that looks like a beer, feels like a beer but is actually sparkling water. The brand was partly inspired by the success of Liquid Death, as well as Big Beer’s attempt at wooing sober-curious drinkers with zero-ABV drinks. The red and white aesthetic itself is reminiscent of a classic Budweiser can. Not Beer has raised $1.9 million from angel investors, and is launching on Amazon and through select retailers this month. According to founder Dillon Dandurand, this new subcategory taps into several ongoing trends, including a healthy alternative to alcohol and a quirky TikTok-friendly branding.

“I came up with the idea when I saw a Bud Light Next billboard on a drive, which said ‘zero carbs,'” Dandurand told Modern Retail. “So I thought, at what point is this just water?” 

Gen Z is reportedly drinking 20% less alcohol than millennials, creating a race among non-alcoholic players to win this cohort over. In addition to Liquid Death, which recently announced it was valued at $1.4 billion after a new financing round, another promising upstart is Hop Wtr. The brand, which launched in 2020, sells non-alcoholic hop-infused sparkling water. In 2021 alcohol portfolio company Constellation Brands, the parent company of Modelo and Corona, acquired a minority stake in Hop Wtr.

But Dandurand said there is still a white space for brands like Not Beer. “A lot of the benefits of alcohol is this fantasy world we buy into,” Dandurand said. This feeling, he said, cannot easily be easily replicated by NA cocktails. “We’re riding the NA trend as a sparkling water, so we’re taking an alcohol marketing approach to it,” he said.

“To me, a lot of the nonalcoholic beverages are trying to mimic the taste and position themselves as a healthy alternative,” Dandurand said. But that’s not necessarily true. While these NA drinks that mimic cocktails don’t contain alcohol, many mocktails are still high in sugar and carbs.

“We chose the name because we want it to resemble beer and stand out in the water aisle,” Durand said. Not Beer uses American water — not imported Alps water, which Liquid Death used at launch before switching to a U.S. source — and can be canned anywhere in the country.

Coming up with a formulation, and finding a manufacturing partner to can water was harder than expected, Dandurand said. “We use a reverse-osmosis purification system and a proprietary electrolyte and mineral blend to enhance taste and hydration,” he said. As a result, the formula has less carbonation than most sparkling water brands to give it a bubble level that’s closer to beer. “You can drink more of them because they have less of a tongue burn,” Dandurand said. 

Dandurand is forthright about Liquid Death’s influence on Not Beer. After all, Liquid Death made its mark by marketing its purified water like a beer. The category’s growth is evident by Liquid Death’s rapid ascent. Liquid Death said it did $263 million in retail scanned sales in 2023.

“I think it’s a perfect time to start, [Liquid Death has] proven that people want a fun water like this,” Dandurand said.

As such, humorous marketing is key to standing out, hence Not Beer’s slogan “never a bad time.” There are also a lot of content opportunities for the branding, Dandurand said. “People can create short clips optimized for TikTok or Instagram Reels showing themselves drinking Not Beer at different times of the day,” he said.

To start, the company is focusing on driving sales velocity in Texas, where the company is based. “It’s an important market but is not as hyper-competitive as L.A. or New York where brands are typically popping up,” Dandurand said. Not Beer is launching first on Amazon before entering select retailers, beginning with Texas-based grocery chain Brookshire’s in the coming weeks. 

Mike Jones, co-founder and managing director of venture fund and startup studio Science Inc., was an early investor in Liquid Death. Jones said he expects the market for these health-conscious NA products to continue growing. “There’s a simple appeal to holding a can of water mimicking the appearance of an alcoholic beverage in social situations,” Jones said.

But today, people cutting back on alcohol have an array of options, including mocktails, sparkling beverages, flavored water or plain old water. To remain innovative and relevant, Jones said brands have to stand out through branding, flavor development, impactful marketing campaigns, collaborations and fun partnerships. Liquid Death, for example, is trying to expand its audience reach through collabs with beauty brands like E.l.f. 

This is the marketing playbook Not Beer plans to adopt. For now, the startup isn’t planning on investing in paid digital ads. Rather, a big part of Not Beer’s strategy will be focused on doing as much sampling as possible, both in retail and through influencer marketing. “We have a fun VIP mailer we’ll be sending out to high-level influencers,” Dandurand said, in which they will be showcasing comedic “never a bad time” content. In-house content and organic social media campaigns are also being planned for the coming months.

Dandurand said that thus far, retail buyers seem excited about the brand’s addition to the category. “It’s an alternative to a boring plastic water bottle and a more fun alternative to the existing sparkling waters out there,” he said.