Deschutes Brewery is moving production of its non-alcoholic beer in-house with an investment in Sustainable Beverage Technologies’ BrewVo equipment at its production facility in Bend, Oregon.
The equipment will allow Deschutes – the 11th largest Brewers Association-defined craft brewery by volume in 2021 – to scale up and package an expanded portfolio of NA offerings in the future, beyond its non-alcoholic version of its legacy Black Butte porter brand.
“As consumer attitudes toward alcohol consumption evolve, we’re expanding our capabilities to scale this highest-quality non-alcoholic beer that rivals the flavor and aroma experience of a full-strength craft beer across the U.S. and beyond,” Deschutes CEO Peter Skrbek said in a press release. “Bringing non-alcoholic production in-house opens the door to expansion in a top growing sub-category of craft.”
Deschutes first partnered with Golden, Colorado-based Sustainable Beverage Technologies (SBT) in 2020 to release a non-alcoholic stout, Irish Dark. The company followed that release in 2022 with an alcohol-free version of Black Butte Porter, Black Butte Non-Alcoholic featuring the same hops and specialty malts as the original beer.
“Having worked with SBT now for four years, it feels very much like a partnership because we collaborated so heavily early on on the recipes and testing to get to the point where we can produce a non-alcoholic product that we said truly has all the flavor and aroma experience of a full strength beer,” Skrbek told Brewbound.
Non-alcoholic beer production is expected to move from SBT’s installation in Colorado to Bend by the end of 2023. The goal is to have all of the equipment commissioned by late Q3 or early Q4 with production of salable beer by the end of the year, Skrbek said.
Skrbek anticipates Deschutes will start with Black Butte to ensure the company can match its flavor and has the quality metrics dialed in before adding hop-forward beers to the portfolio. The plan, though, is to go big with hop-forward beers eventually, starting with a non-alcoholic version of flagship Fresh Squeezed IPA
By Skrbek’s count, Deschutes has already produced “double digit” R&D batches of non-alcoholic versions of Fresh Squeezed IPA and he believes “we’re there” with the final product.
“It’s crazy the amount of aroma and high-fidelity flavor experience from the hops because that’s so Citra- and Mosaic-driven,” he said. “And our concern was always how does that happen in dealcoholization as you go through reverse osmosis and then maybe dry hopping or adding hops after that first the dealcoholization step and we played around with it a lot.”
Skrbek said he’s “confident that we are going to be able to deliver specifically hop-forward beers at a fidelity that’s never been done before at any semblance of scale.”
However, the wait for Fresh Squeezed NA may be until 2024, as the company is still figuring out how the new equipment – particularly, the tunnel pasteurizer – will fit within its Bend production facility.
Nevertheless, the opportunity ahead appears to be a big one for Deschutes. Black Butte Non-Alcoholic became “the highest-velocity product” in the Deschutes portfolio, according to the company. That data point does come with a caveat, Skrbek said.
“We were so out-of-stock for so long, that number may be in reality higher or lower,” he said. “It could be that when a consumer finds it, they buy as much as they can because they know it’s in short supply. So hard to tell, but suffice it to say we know that demand out there is overwhelming and vastly exceeded our wildest expectations.”
Black Butte is distributed in “multiple states” but is concentrated in a few retailers who adopted the brand early on, Skrbek said.
“We’re not pushing on the gas just yet because until we can say surety of supply is there, we don’t want to disappoint any fans,” he said. “We don’t want to disappoint any retailers. So we’re just trying to manage our existing supply, keep everybody as in-stock as possible throughout this, honor that retail partner, and then as soon as we got the ability to produce, we’re going to open the floodgates.”
Skrbek sees parallels between the current non-alcoholic beer growth and the craft brewing movement of the late 1980s.
“In many ways at the same moment on the non-alc side, having tasted a lot of what’s out there, it’s better than what was there 10 years ago,” he said. “But there’s still a long way to go and a lot of opportunity to deliver the consumer a full-flavor, full-aroma experience.”
Deschutes expects to add jobs and create a dedicated brewing team to focus on the non-alcoholic beer portfolio, Skrbek said. The NA beer will be tunnel pasteurized, as “just from a safety standpoint, having less than 0.5% alcohol, there’s no way we would introduce something without pasteurization,” Skrbek added.
For the hop-forward beers, Skrbek anticipates a “gentle flash pasteurization immediately preceding a tunnel pasteurization.”
Beyond non-alcoholic beer, Deschutes is focused on three priority brands in 2023, Skrbek said:
- Fresh Squeezed IPA: Building marketing campaigns and activations around the brand in stores and in the on-premise and investing behind the product so that retailers and wholesalers remain excited about scaling the brand;
- Black Butte Porter: Investing in the brand and staking claim as the top-selling porter in the market by building awareness around the beer while also seeding interest in the NA offshoot;
- Symphonic Chronic double IPA: Zeroing in on the convenience channel with the 9% ABV double IPA in 19.2 oz single-serve cans.
This is all part of Deschutes’ shift from a product-focused company to a consumer-centric brand, Skrbek said.
“We’re really integrating those insights and those desires from the fans into what we’re making versus us saying, ‘We’re a great brewer, trust us. We’ll make you something great,’” he said. Instead, the key is listening to its consumers.
Finally, Boneyard Beer, which Deschutes acquired in March 2021, is continuing to fill out distribution and seize channel opportunities in its Oregon and Washington territories, as well as growing RPM IPA in Northern California.
“Trying to really get that brand out to the fans and get folks in that market stoked on what’s happening up here in Bend,” he said.