Better brew: The duo redefining non-alcoholic drinks

The entrepreneurial class have created a self-image that tells them, and us, that facing into challenges, embracing them even, is the key to success. And there is probably a lot of truth in that.

But launching a new drinks brand while creating an entirely new category in the middle of a global pandemic? That sounds more like masochism than appetite for a challenge.

That, however, is exactly what Jerry Goldberg and Fraser Duncan, co-founders of I’m Still Standing Brewing Company, have done.

Established in 2019, the company had just introduced its first drink brand to the market when coronavirus and lockdown struck, forcing the duo to place everything on hold.

“When we set this up, we had the lowest possible fixed cost base, so we are not as vulnerable [as others]. We can hibernate the business without much damage,” says Goldberg.

“We were reasonably fortunate in that it started earlier in our life. We hadn’t built a big infrastructure, had just got some distribution, had our first week in a dozen pubs and restaurants in London. [We] were having lots of good retail conversations and then it all comes down.”

The drink in question is ZAG, billed as an alternative to non-alcoholic beer. It is a blend of kombucha, matcha tea, lime, lemon, mint and cucumber. When they say it’s not beer, they’re not kidding, but everything about the drink, from the product design to the way it is marketed is entirely in line with the well-trodden craft beer category.

And categorisation is both the opportunity and the stumbling block for this new entrant.

“We want to create a new category and have ZAG as the leader in it,” says Goldberg.

“I have never tasted anything like it which makes it difficult to explain. The soft drinks market appears to follow fairly conventional trends ... but some of the flavours in ZAG are more challenging.”

He admits that communicating what it is and what it tastes like is the problem (it is incredibly difficult to describe) as there are no existing reference points for consumers but he is convinced there is a market for it. He just needs to create it.

All the stats point towards an increasing number of people turning their backs on alcohol. A recent study by the International Wine and Spirits Record found that 65 per cent of alcohol consumers aged 25 to 34 were trying to cut back on their alcohol intake but that only 39 per cent had tried low or no-alcohol products.

The same research suggests that in the UK the low or no-alcohol category is expected to grow exponentially by 2022 (spirits up 81 per cent, ready to drink products 44 per cent, cider 13 per cent, wine 6 per cent and beer 5 per cent).

It is this, and the experience gained in a ten-year stint in marketing at Courage and Scottish & Newcastle, that gives Goldberg the confidence that ZAG can create and lead a new drink category.

He says there has been very little real innovation in the beer market over the years, the explosion in micro-breweries and craft beer aside. However, even this is not catering to a growing number of people who want less alcohol in their lives.

“I was thinking about innovation in this market but much of it was irrelevant. And it occurred to me that alcohol-free beer ... was disgusting,” he says.

“Which got me wondering why people were buying it. My conclusion was it is the occasion they want, not the product.”

This thought process took place years ago, but it was his business partner’s temporary abstinence one year that got things moving. “Fraser’s dry January reminded me of the idea, and he said we should do it. We knew that creating a new category was ambitious but also that it would be quite good fun and interesting to do. That’s where it started,” he says.

From there, the two key challenges of creating the right brand and the right product were tackled with one guiding principle: to create something that is completely different but that still satisfies those occasions which are complemented by beer.

And lo, ZAG was born into a global pandemic, a situation that could have seen this upstart killed off before it even completed its first stumbling steps. Instead, it was put into hibernation and the focus turned to figuring out the best way to communicate something that is largely indescribable.

“We have been working a lot in tightening up communication and it is a much bigger challenge than perhaps we considered,” admits Goldberg. “But once you crack it, it will be incredibly powerful.”

They have also been tweaking the recipe – switching the matcha tea for green tea to remove the sediment and upping the mint flavour – but it is the communication that Goldberg keeps returning too.

“We are well on the way to cracking that. Classic food and drink communication are always visual so however we present it, we need to make it look incredibly refreshing,” he says.

And while he says it would be crass and insensitive to try to push a new category and product to an on-trade sector that been “traumatised” by the lockdown, he is optimistic about the future.

“In hospitality, some will survive and carry on, some will have to adapt their business model and then there will be others that won’t make it,” he predicts.

“The demand will still be there, as will the premises, but some of the operators won’t be.”

He predicts a new wave of capital and entrepreneurs coming in to fill the gap and he thinks these new entrants will be modelling their businesses on a post-Covid world and consumer.

“You will have an acceleration in innovation caused by this and I think those new operators are going to be much more receptive to new ways of doing things and new brands and they will be in tune with how young people socialise,” he says.

“These new businesses will be much more tailored to the way young people are going out now and some of the old brands will look incredibly dated. I think we’ll have an acceleration in change and that will suit us very well.”