As interest in wellness shakes up the cocktail world, this executive gets her chance
‘Transforming Spaces’ is a series about women driving change in sometimes unexpected places.
On any given weeknight, you might find Heidi Dillon hopping around Manhattan or San Francisco, popping into bars and settling in one of them for over two hours, grilling the bartender on various products and cocktails.
But there is a caveat. She doesn’t hop for the crowds. With her background in health and wellness marketing and branding, which she has applied to coffee, fresh juices, snacks and “clean” ready-to-drink cocktails, Ms. Dillon is at the forefront of the growing no-alcohol and low-alcohol beverage industry. The category finds its place within the alcoholic beverage industry as global spirits manufacturers recognize the heightened interest in wellness from consumers across a wide range of ages and genders.
Ms. Dillon is the CEO of Distill Ventures, a company that supports founders and helps them grow their brands in the alcohol industry. She was recruited in 2018 specifically to develop Distill Ventures’ alcohol-free and low-alcohol portfolio, and she is now uniquely positioned in a growing segment of what has long been a male-dominated space. That’s reflected in every liquor store, where brands line the shelves are named after distillers and distillery owners of yesteryear – Jack Daniel’s, Elijah Craig, Pappy Van Winkle, George Dickel, Uncle Nearest and Evan Williams.
But the landscape is changing. “About 70 percent of people occasionally drink non-alcoholic beverages and occasionally spirits,” said Ms Dillon. “It broadens the opportunities for retailers, bartenders and distributors because it’s a lot of the same people they already serve. People are drinking less – and there is a whole younger generation that is drinking significantly less – and are looking for more.”
That means more flavor, more creative substitutes for their favorite liquor and just more options in general, she said, all to stay clear-eyed, sharp-witted and hangover-free.
Unless you’ve lived in a bourbon distillery, it’s hard to miss evidence that alcohol-free cocktails are no longer a niche option, reserved for designated drivers and those who are sober. Both high-end restaurants and craft cocktail bars have added booze-free cocktails to their menus, and shops and bars dedicated solely to teetotalers are bustling (if you will) destinations in New York, Los Angeles, Austin, Denver, and elsewhere.
Dry January and Sober October, common alcohol refraining exercises as a type of cleanse, have grown in popularity. According to a 2022 survey from market research firm Morning Consult, 19 percent of Americans reported participating in Dry January, up from 13 percent in 2021. Among millennials, the figure is 27 percent.
There are now enough devotees that it has stimulated an entire lifestyle and a whole host of hashtags. (#SoberCurious, #SoberLife, #SoberLiving, #SoberIsSexy.) A trade group, the Adult Non-Alcoholic Beverage Association, was founded in 2021 and currently has 110 members. The rapid growth is due to a number of factors, such as millennial awareness of physical health and mental well-being, the broader clean-living trend, and the growing availability of legal marijuana, which some prefer to alcohol.
According to IWSR, a company that analyzes the beverage market, global retail sales of non-alcoholic and low-alcohol products are estimated to be more than $11 billion, up from $8 billion in 2018. As the category continues to grow, non-alcoholic products are becoming more more important the increase, and are expected to account for 90 percent of that subgroup’s growth.
“It’s a misnomer that non-alcoholic drinks are for sober people,” says Ms. Dillon, a single mother of two young daughters in Santa Cruz, California. “We’ve had to prove that it’s not really about that. This is about choice. This is about, maybe one day I’ll lean this way, the next day I’ll lean this way. It’s the idea that a lot of people over the course of switching back and forth between a higher proof and a no proof or low proof drink for a week – or an evening.
There’s an increasing number of products, but limited space on the shelves of bars and stores, so part of Ms. Dillon’s job is figuring out how non-alcoholic products fit into that wider landscape.
She’s quick to note that zero-proof cocktails have broader demographic appeal than one might think. In this health-conscious moment, non-alcoholic drinks are bigger than the cocktail trend du jour. After all, vegan food was also once a niche market and was a $26.16 billion industry by 2021.
“The beverage industry has a constant mix of tradition and modernity, but I think the traditional side often wins. A huge number of the world’s biggest brands talk about heritage going back 100 years,” said Frank Lampen, co-founder and CEO of Distill Ventures, an independent company funded by Diageo, the global beverage company that produces brands including Johnnie Walker and Smirnoff. Mr. Lampen added: “There’s a sense that that heritage is reflected in the make-up of today’s industry, which is still quite male-dominated.”
To lead the company’s non-alcoholic division, Mr. Lampen was looking for someone who could bring a different perspective to the role, someone who had the experience to connect not only new products but an entirely new category with a broad cross-section of consumers.
“We needed someone with the empathy to take the alcohol-dominated perspective and understand it and see where that takes you,” he said. “Heidi brings an additional mindset and experience in terms of understanding and reaching consumers and how we can combine our world of alcohol-driven venues with something different and innovative.”
In the spirits industry – whiskey in particular – innovation is often a matter of tinkering with cask type or char level, or incorporating different grains into a recipe for distillation. Non-alcoholic drinks require a different tactic.
“It’s about developing new flavor profiles and taking inspiration from its distilled counterparts, but taking it to the next level with inputs from the culinary world and other areas,” said Ms Dillon, pointing out that creators of alcohol-free and low-alcohol brands are not tied to the familiar flavors of traditional spirits, so they look beyond drinks for inspiration. “You look at bitterness and length and mouthfeel, but how do you achieve and balance all of that without the alcohol?”
This isn’t the first time Ms. Dillon has made strides in an industry largely run by men for men. While working as a field marketing manager for Clif Bar & Company, she showed up at sporting events and handed out the snack to elite athletes about to run a black diamond, for example. Men generally outnumbered women. When the company introduced the Luna Bar, aimed at women, she became marketing manager for that new brand. Not only did she show up at events like professional women’s mountain bike races, but she also helped grow lifestyle events like LunaFest, a short film festival featuring female filmmakers, to connect with women outside of the sports world.
“Throughout her career, the idea of equality and inclusion and creating access has always been at the forefront of the conversation,” said Lisa Novak, the senior director of brand partnership and communications for Clif Bar, who, in her time with Ms. worked. as Luna’s marketing manager. “She always invites women to thrive in male-dominated spaces, like sports and now ghosts. Women standing for women transcend any individual product category and help transform industries.”
As an incubator, Distill Ventures provides coaching and mentorship to brand founders to help them grow their businesses. Within the alcohol-free and low-alcohol division she oversees, Ms. Dillon has made it a priority to focus on startup brands owned and run by women and minorities. By focusing on these startups from underrepresented groups in the industry, Ms. Dillon aims to normalize diversity. She wants to get to the point where someone doesn’t have to be qualified based on gender, race or sexuality, but is simply referred to by their title.
“It’s their business,” Mrs. Dillon said. “So they shouldn’t say, ‘I’m the female founder’ or ‘I’m the black founder.’ They are just the founder, they don’t need an adjective.”
That sensitivity is evident for Cindy Pressman, who in 2020 co-created Atost, a low-alcohol aperitif with her husband, Kyle, with her husband, Kyle. When Distill Ventures invested in it in 2022, Mrs. Dillon became her mentor. On numerous occasions, Ms. Pressman said, her husband got the first handshake and most of the eye contact when they went to a business meeting. She was not used to that in her previous work, in the fashion industry.
“I’ve always worked in companies that were mostly women, so getting into the alcohol industry was definitely a culture shock,” said Ms. Pressman. “Heidi gave me a voice in a very crowded room. She sees me as a human being, not a business transaction or an investment or a number. It has allowed me to recognize my differences and be who I am.”
For Ms. Dillon, prioritizing inclusivity is the most logical way to market a beverage brand.
“This is really an industry that brings people together,” she said. “Why not have a great drink that you can enjoy on an occasion – it doesn’t matter what proof it is if it still has poise and intrigue.”