Non-alcoholic (NA) beer brand Best Day Brewing has added another $12.5 million in investment as part of a Series B round, bringing its total fundraising to $22.5 million this year.
The latest round featured “new partners and existing investors,” including a new family office, co-founder and chief strategic officer Mike Sheehan told Brewbound. He declined to name who specifically participated in the round.
Earlier this year, Best Day raised $10 million, according to a Form D filed with the U.S. Securities and Exchange Commission. The company’s previous raises included $150,000 in debt offered in April 2023, more than $2.8 million in equity sold in October 2022 and $2.5 million in equity sold in February 2022.
The latest investment round will be used to add sales and marketing support for its 35-state footprint, Sheehan said. The company now employs around 50 workers.
“We very much come from the belief of, you’ve got to knock on the doors yourself, build it with your distributors, and not just expect them to do all the heavy lifting,” Sheehan said.
Best Day’s distribution footprint covers about 90% of the U.S. population, and the company is seeking additional programming with larger chain retailers. The company’s largest markets are California, Oregon, Washington, Texas and New York.
“We don’t need to open another state to have the ability to sell $100 million in annual revenue,” Sheehan said. “We just need to keep diving deeper into these markets.
“We don’t need to really do anything special to keep scaling at a pretty solid clip with the distribution footprint that we got,” he continued.
Best Day is on pace to produce around 30,000 barrels in 2024, its third year in operation, Sheehan said. He admitted that Best Day’s forecasts for 2024 may have been “a little bit too conservative.”
“We could have done more,” he added. “We have great distribution partners. We got a great team. We just had some capacity constraints over the summer that put us a little bit behind. We could have done more. The demand is definitely there.”
Sheehan acknowledged the tricky balance of producing enough NA beer to meet demand while not being “too over our skis with inventory.”
“We just had a really great summer, and we have great distributors and great partners and our team’s out there doing a good job,” he said. “And when you hit some of the stretch goals that you’re aiming for, or you get some really good chain programming that maybe came a little bit out of left field, you just run out of beer faster than you can brew it.”
For 2025, Best Day is targeting 60,000 barrels, with a core beer portfolio of West Coast IPA, Hazy IPA, Kölsch, and Electro-Lime Mexican-style lager, Sheehan said.
Sheehan sees a “significant” opportunity for NA beer companies. Off-premise dollar sales of the segment are up +29.3%, to more than $366.2 million, and volume up +23.5% year-to-date through October 6, according to market research firm Circana. The segment has gained +0.24% share of beer category dollars, now holding 1.03% share through early October.
Scans capture only part of the NA segment’s sales, notably excluding direct-to-consumer e-commerce sales and on-premise sales, among others.
“This wellness trend, this better for you, this healthier lifestyle piece, that is a macro trend that is driving so much of this opportunity,” Sheehan said. “What we see is there’s going to be a few folks in the space, Athletic, obviously, being the lead dog.”
Sheehan called Athletic Brewing’s success “unbelievable.” Athletic is the 24th largest beer category vendor in Circana-tracked channels, with sales topping $72.6 million YTD through early October. Athletic’s dollar sales and volume are up +70.7% and +75.5%, respectively, YTD. In the grocery channel – where the bulk of NA beer sales are recorded – Athletic is the 15th largest beer category vendor, with more than $57.6 million in sales (+61.6% YTD).
“They’re 10x plus the size of us,” Sheehan continued. “But if they’re the Coke, we’re the Pepsi. If they’re the Red Bull, we’re the Monster. If they’re the Sierra [Nevada], we’re Lagunitas.
“To quote one of our guys, ‘They’re the category creators, we’re the category builders,’” he said.