Zero alcohol brewer Heaps Normal raises $8.5m to fuel growth

Simon EvansSenior reporter

Nov 29, 2021 – 5.00am

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Zero alcohol craft brewer Heaps Normal has raised $8.5 million in capital from a range of investors including Adore Beauty founder Kate Morris and the co-founder of eco toilet paper outfit Who Gives a Crap, Simon Griffiths.

Heaps Normal chief executive Andy Miller said the craft beer group began selling its first products in July 2020 and is expecting volume growth to be 8.5 times higher in 2021-22 as the zero alcohol category expands quickly, driven by a shaper focus on health and wellbeing.

Heaps Normal chief executive Andy Miller says a pure-play zero alcohol beer company has more credibility than brewing giants having an each way bet.

After the capital raising, the business has a valuation of $58 million.

Heaps Normal aims to build a production facility and tasting room in Sydney’s inner suburbs and double staff numbers as sales climb. The brand is stocked in almost 2000 outlets including Endeavour Group’s Dan Murphy’s and BWS chains, First Choice and Liquorland owned by Coles Group, and a string of independent outlets.

Mr Miller said being a pure-play zero alcohol company that does not make any alcoholic beers gives the company extra credibility.

He said the pandemic had been the catalyst for many people to pay closer attention to their health and wellbeing, and this had helped accelerate growth in the broader zero alcohol category.

“I think it’s been a flashpoint for a lot of people to reassess their relationship with alcohol,” he said.

Other investors in this fundraising round include Athletic Ventures, an investment fund headed by managing partner Matt de Boer, who has played 211 matches in the Australian Football League for Fremantle and Greater Western Sydney.

Mr de Boer said Athletic Ventures had put funds into Heaps Normal because of the strong upside in the category and the company.

“They’re really committed to purpose,” he said.

“We think the non-alcoholic beer category will keep on growing fast.”

Mr de Boer, who has a commerce degree, did further studies in applied finance, and in 2020 completed a Harvard University short course in disruptive strategies, declined to specify the size of the group’s investment but did say it was larger than usual. “It would be above average,” he said.

Sector had grown fivefold

Steve Donohue, the managing director of Endeavour Group, said in October the zero alcohol and low alcohol category had grown fivefold over the past year.

Mr Miller said the trajectory of the segment was promising. “We haven’t touched the sides yet.”

He said Heaps Normal had spent 18 months on research, development and testing before hitting the market with its first products. It uses the Brick Lane brewery in outer Melbourne to make its beer.

He said Heaps Normal uses special yeasts and biological processes to make beer in a way that does not require alcohol to be stripped out late in the process, thus enabling a fulsome beer flavour. “There’s nothing to be removed,” he said.

Mr Miller said Heaps Normal was in a unique position compared with big players such as Heineken and Asahi-owned Carlton & United Breweries, whose core business is still traditional alcoholic beers, but which had also developed zero alcohol products.

“We’re not saying alcohol is the devil. Overall, it’s a positive for the category that Heineken and Carlton and others have invested heavily in the zero alcohol category,” he said.

He said Heaps Normal could authentically promote the benefits of zero alcohol.

Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com