InvestBev moves into non-alc category, invests in Sèchey

14-Aug-2024 - Last updated on 14-Aug-2024 at 17:15 GMT

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Related tags non-alcoholic Investment

Private equity firm InvestBev’s is making its first foray into the non-alcoholic category with an investment in Sèchey, a zero-proof wine, beer and spirits brand and marketplace.

Terms of the deal were not disclosed. According to InvestBev, the firm holds $200 million in assets under management and $100 million in private credit.

Sèchey’s operates a brick-and-mortar store in Charleston, SC and has a dedicated section across 1,300 Target stores since last year. With the additional resources from InvestBev's investment, Sèchey plans to "return to the NYC metro area and expand the availability of our dealcoholized wine portfolio in that region," and launch a loyalty program for its e-commerce business, Emily Heintz, Sèchey’s CEO, founder and chief curator told FoodNavigator-USA.

Sèchey's "combination of DTC, brick and mortar and mass merch retail" served as key differentiators for InvestBev, Brian Rosen, chairman of the firm, told FoodNavigator-USA.

"Our partnership aligns to ensure our success by connecting [InvestBev's] industry expertise to support our rapid growth as the no/low movement continues to gain traction. My vision for Sèchey was always about alternatives for connection, socialization and celebration, not about vilifying alcohol. We both understand the idea of alcohol flexibility, and choice…that incorporating alternatives helps our customers live healthier lives. Together, we can apply the fundamentals of bringing an brand to market in a new exciting category of adult drinking," Heintz added.

InvestBev's team will focus on Sèchey's "core attributes of brand growth, distributor management, sales marketing, financial planning and analysis," Rosen added.

Non-alc market sees continued growth led by Millennial, Gen Z

The non-alcoholic space saw strong growth in 2023, growing 29 points in overall volumes since 2022, and pacing further than the low alcohol segment which grew only 7% in the same time period, according to IWSR Drinks Market Analysis data.

In 2023, non-alcoholic beer and cider led the segment, accounting for 81% of servings and growing by 30% compared to the previous year due to the relative maturity of the segment, readily available products that deliver on taste and brewery culture, while no-alcohol wine volumes grew by 18%, according to IWSR. The data also suggests that US growth is driven by higher prices for premium-plus products, which made up 75% of no-alcohol beer volumes, while alcohol-free wine and spirits held larger shares at 87% and 93%, respectively.

Alcohol-free beverages—marked by consumers’ desire for moderation—gains traction as leading beer and spirit brands launch non-alcohol options to cater to consumers’ wellness preferences, particularly Millennials and Gen Z. In 2023, 45% of Millennials were no-alcohol consumers, which dipped from the previous year from 51% due to the influx of Gen Z consumers, which grew from 11% in 2022 to 17% in 2023.

Rosen emphasized the wellness factor as a driver in the category, particularly for consumers over 40 who "want to feel good as [they] age ... [and] alcohol is not always the best for [them] physically, and [they] want options."

The segment is expected to grow, as other channels participate in the category’s maturity, including the rise of specialist retailers, like Sèchey, sober bars and venues that include non-alcoholic options on cocktail lists.

*Editor's Note: This article has been updated to include exclusive commentary from Emily Heintz of Sèchey and Brian Rosen of InvestBev.