The non-alcohol spirits beverage sector represents one of the fastest-growing opportunities in the drinks industry, yet it remains one of the most complex to navigate successfully. As consumer demand for sophisticated alcohol alternatives reaches unprecedented heights, entrepreneurs are discovering that launching a successful NA brand requires far more than just creating great-tasting products. These Bar Convent Brooklyn 2025 sessions provide essential guidance from industry experts who have successfully navigated these challenges, offering practical insights on everything from initial brand conception and regulatory strategy to the critical importance of industry self-regulation in maintaining category credibility and consumer trust.
What to Consider When Starting a Non-Alcohol Beverage Brand
In this Bar Convent Brooklyn 2025 legal deep dive, Ryan Malkin, Principal Attorney at Malkin Law, cuts through the regulatory chaos of the booming non-alcohol beverage category. Malkin reveals the make-or-break legal distinctions that could save your NA brand from costly mistakes.
How Non-Alcohol Beverage Brands Can Self-Regulate
Marcos Salazar, Co-Founder & CEO of ANBA, addresses the critical need for industry-wide standards and how non-alcohol beverage brands can self-regulate. As health experts debate age restrictions and comparisons to “candy cigarettes,” learn how ANBA is leading the charge for responsible self-regulation while fueling category growth.
5 Steps for Creating a Non-Alcohol Beverage Brand
Jake Mackay, CFO & U.S. GM of Pollen Projects, shares hard-won lessons from launching UK-based non-alcohol beverage brands in the complex U.S. market. Discover how to navigate FDA hurdles, state-by-state quirks, and hidden costs that trip up 80% of imported beverage brands.
What to Consider When Starting a Non-Alcohol Beverage Brand Transcript
Ryan Malkin (0:03)
My name is Ryan Malkin. I have a law practice focused on the beverage industry. One quick disclaimer: everything here is for educational and informational purposes only and not specific legal advice. I’m going to move relatively quickly because I have a lot of information to cover — essentially everything you could possibly want to know about starting an NA brand, all within ten minutes. Ask questions at the end.
Some of the things we’re going to cover: which federal agencies regulate your product, whether it’s subject to excise tax, what has to appear on the label, where it can be sold, and what type of retailer can sell your product. This information is findable online, so I’ll move through it quickly. The whole key with regards to non-alcoholic beverages is 0.5% ABV and below — that’s largely the threshold for whether the TTB will regulate the product, other than for malt beverages. Malt beverages are subject to TTB regulation regardless, because it’s more about production and what the product is made from than the alcohol content. Wine follows similar rules, which are easy enough to find online. And for malt and cereal beverages — I know we’re talking largely about NA spirits today, but non-alcoholic beer is also quite popular and is obviously the largest category within NA, so it’s worth flagging.
Ryan Malkin (1:44)
On labelling, regardless of the type of product — beer, wine, or spirit — you need to have the product identity, stating what the product actually is; any alcohol content declaration, or confirmation that it’s 0.5% ABV or below; net contents; manufacturer information; and any required health statements or allergen disclosures. If it’s an NA product, you don’t need the government health warning, but these other requirements still apply.
From a regulatory perspective, the key question is whether it’s TTB or FDA that regulates your product. FDA regulates the ingredients in a product regardless of whether it contains alcohol — even alcoholic products must use ingredients that are generally regarded as safe, and TTB looks to FDA for that standard. But if you have a non-alcoholic spirit alternative, that product is regulated by FDA. The key difference between FDA and TTB from a market compliance and market access perspective is that with TTB, you must submit formulas and labels for pre-approval. With FDA, there is no pre-approval process. In some ways, that makes alcohol easier — you know from the outset whether the government has approved it, which gives you a level of comfort. Even if TTB approves something in error, you can point to that approval and typically be allowed to continue using that label. With FDA, you have to review everything ahead of time and ensure you’re working with a good lawyer or compliance professional to make sure you’re not putting something non-compliant into the market. So from that perspective, having an alcoholic beverage product can sometimes be easier than having a non-alcoholic one.
Ryan Malkin (3:45)
Now, once you actually have the product — let’s say you’re governed by FDA and you don’t have to worry about obtaining different licences and permits to sell into different states as you would with alcohol — the issue, as was discussed on the other panel, is that you’re often still going through an alcoholic beverage distributor. If you have an NA spirit alternative and you want to be in cocktail bars or in Total Wine or other outlets that traditionally deal in distilled spirits, you’re likely working with a spirits distributor. And the contracts you’re going to have are going to look the same as contracts for a spirit or wine product. Even if you go with a distributor that focuses on NA or food products, the contracts are still going to lock you in the same way. So while there may not be franchise laws as there would be for a beer, wine, or spirit product, you’re still going to face similar restrictions.
The Southern Glazer’s contract, Republic National contract, Breakthru contract — whatever it may be — are going to include perpetual terms where failure to auto-renew carries a penalty. Sometimes it’s five times gross profits to exit. So you have to think carefully about the contract term, the penalty for non-renewal — which can range from two to five times gross profits — and when you get paid. A big distributor might want to pay you on 90-day terms, or they may not specify at all, so you may need to negotiate that down to 30 days. All of these things are negotiable, and they’re really important to address upfront.
Ryan Malkin (5:39)
The other thing to be mindful of is the duties of the distributor — what you actually want them to do. Obviously, maintaining sufficient inventory levels — at least 30 days of stock, for example — and providing you with certain data. But if someone asked me to do a light-touch review of a contract and identify the single most important thing, it’s always going to be some form of goals or KPIs that give you a way out. Most of the time, that’s the one thing a distributor is unlikely to fully comply with. Other obligations — like maintaining sufficient inventory — usually have a cure period, so if they’re short, they can fix it by ordering more. Goals are different: if it’s an annual goal and they don’t hit it, that’s it. Often there’ll be a two-year requirement, but goals are the one area where, if you had to pick one thing to negotiate, try to make non-performance against those goals a material breach so that you can terminate the contract without paying a penalty.
Think about how you’re going to get out before you get in. Treat a distributor contract largely like a prenup — make sure you know exactly how you’d exit before you sign.
Ryan Malkin (7:20)
The next piece to address is the co-pack agreement. Most of the time, if you’re doing an NA product, you’re going to be co-packing rather than producing at your own facility, and there are a lot of issues that arise with co-packers — especially if you’re doing cans, which is one of the most popular formats. You can have issues with the can liner disintegrating, or — especially with CO2 products — cans exploding when stacked incorrectly, or even correctly. One of the issues that comes up repeatedly in my practice goes like this: you go to the co-packer, order cans, have your labels delivered, everything arrives — and then the cans start exploding. You weren’t even there when it happened. The co-packer will say your cans were faulty, or your labels were faulty — whatever it takes to avoid responsibility for your damaged product. This comes up over and over again, and you need to make sure all of those scenarios are addressed in the co-pack agreement. Otherwise, everyone points fingers, no one knows what to do, and you end up in litigation or without product on the shelf — or both — for years. It has happened to several clients, unfortunately.
So you want to define exactly what the co-packer is going to do and what they are responsible for ordering. Is it you or them that’s responsible for sourcing the cans? If it’s them, make sure those cans are adequate for the product. Who’s applying the labels, and will their seaming machine put tiny holes in the cans that could cause them to fail? If you’re using glass, make sure the agreement requires them to inspect and clean all materials upon receipt so that foreign matter doesn’t end up in the product.
Ryan Malkin (9:31)
You also want to make sure you have an approved sample and that they produce against that sample, so you have a benchmark to reference if the product doesn’t match. Address orders and timing of pickup — how long from the time you place the order to when you can collect, and how long you can store product at their facility without incurring warehouse fees. If they don’t produce in time for a major order, what’s the recourse? You need to be able to say: “You were supposed to have this ready by a certain date — I need a discount or some form of remedy.” And then of course, claims generally — who is liable for what if something goes wrong.
Critically, make sure you own all of your intellectual property. That includes the recipe. If they develop the recipe for you, make sure it’s classified as a work made for hire so that you own it even though they created it — otherwise they can make the same product for someone else, or replicate it after you leave. You want to make sure you own everything you’re bringing to market, and that you are licensing your trademarks and IP to them solely for the purpose of manufacturing on your behalf. Also consider exclusivity — do you want the flexibility to use one co-packer in New York and another in California, or are they requiring you to work exclusively through them?
And as with distributor agreements, know how to get out before you get in. Think about what happens after termination: do you have to buy all remaining stock from them? What can you do with leftover cans or materials? Make sure they can’t use your materials going forward, and that you can reclaim them if you want. And finally, make sure you are indemnified — if they do something wrong and you get sued, you need the contract to require them to protect you.
How Non-Alcohol Beverage Brands Can Self-Regulate Transcript
Marcos Salazar (0:03)
What I’m going to speak about today is what we do at the Adult Non-Alcoholic Beverage Association — advocating for and supporting adult non-alcoholic beverage brands, with the regulatory landscape being one of the key areas we focus on. Our mission is to promote, protect, and grow the overall adult non-alcoholic beverage category with a unifying voice, from production to marketplace. The word “adult” is intentional — these are products marketed towards adults of legal drinking age, at 0.5% ABV or below. That’s how we define the adult non-alcoholic beverage category.
The other thing we really want to do is create overall industry standards, which is important because we want to self-regulate in a number of ways — and where regulation does emerge at a state or federal level, we want to be leading that charge so it’s built around what’s conducive to category growth, without unintended consequences. I’ll give you an example. There was a story that gained some traction last year, where a researcher was calling for age limits on non-alcoholic beers and mandatory ID checks in all states. Her thesis was that if these products are widely available, there’s a risk of younger people consuming them — and specifically that a product like Heineken 0.0 could act as a gateway for minors to eventually drink full-strength Heineken. There is no global evidence of that whatsoever. It’s referred to as alibi marketing, and while research on it is limited, the concerns she was raising had no evidential basis. She was drawing comparisons to candy cigarettes — which, granted, are sugary and appealing to children — but the connection was tenuous at best.
Marcos Salazar (2:23)
We ended up responding when an NPR story ran on this, pointing out that the situation wasn’t as she described, and that the heavy regulation she was calling for across states would create more and more hurdles for small, innovative brands to grow, increase costs, and reduce availability in the marketplace. The unintended consequence of her goal — which was broadly to reduce alcohol consumption — would actually be fewer NA options available to consumers. I did reach out to her directly and we had a conversation. She’s from Stanford and was genuinely well-intentioned, building her career around this topic, but we pointed out that her proposed approach would result in fewer NA products in the market — the opposite of what she was trying to achieve. So one of the things we’re focused on is getting ahead of these issues early, given how young the category still is, and creating overall standards and guidance that protect its growth.
Marcos Salazar (3:39)
On the growth of the category — if you were here earlier, Brandy likely shared the most up-to-date data, so what I’m about to show is probably six months to a year old, but one of the key findings is that over 90% of purchasers of non-alcoholic products also purchase alcoholic products. So the consumer is someone who drinks both — it’s not a binary choice. The category is growing double digits each year, which is great, and one thing worth noting is that growth used to spike heavily around Dry January but is now spread across the whole year. People are purchasing these products throughout the year, not just in January or around the holidays. Another interesting data point is that on-premise beer growth is decreasing while NA beer growth is actually increasing over a 52-week period. So overall, the category continues to grow, and our goal is to help guide both the brands and the category as a whole.
Marcos Salazar (5:10)
A couple of things to keep in mind as you grow — echoing what both Jake and Ryan said — is to cover the basics first: production, labelling, and legal foundations. Everybody tends to be understandably in love with their product, and you do need a great product, but part of that foundation is getting the regulatory and legal piece right. Get your labelling right from the beginning with the long term in mind. We have a number of brands that use “alcohol-free” on their labels and are navigating those labelling requirements. At this point, the FDA isn’t cracking down in any significant way, but it’s something to think about over the long term.
As Jake pointed out, be cautious about making health claims. Companies are getting sued for a range of reasons related to health claims, and we strongly advise brands not to make outlandish claims about functional ingredients. There are some NA brands within the association that do include functional ingredients, but they position themselves primarily as an adult product for a particular occasion that happens to contain those functional ingredients — they don’t lead with a direct functional beverage claim.
Marcos Salazar (6:36)
The other piece I’d add is: start local, then expand regionally, and then nationally. Each state has its own particular quirks, and if you try to scale wide too quickly, you’re going to run into a lot of different challenges — and so will your distributor or anyone else involved. I’d suggest starting local, going deep, and then growing regionally before expanding nationally. That’s a concentric model of growth, and it’s one that tends to serve brands well in this space. That’s it from me — you can find me at marcos@anba.org or on LinkedIn. Thanks, everyone.
5 Steps for Creating a Non-Alcohol Beverage Brand Transcript
Jake Mackay (0:03)
Hi everyone, good afternoon. I’m Jake Mackay, CFO of Pollen Projects. Pollen Projects is the next business from Ben Branson — you may know Ben as the founder of Seedlip, which was one of the first, if not the first, global brand in the non-alcoholic category. We have two brands: Seasn, which is an NA bitters, and Sylva, which is an NA dark spirit that we’ll be making here in the US, up in the Hudson Valley.
The focus of this session is on compliance, and my background is in general management, finance, and brand building, so I’ll touch a little beyond just compliance, because these things are all so entwined. What I want to give you is essentially a checklist — an overview of how to bring a brand successfully into the US from a different jurisdiction. My background is from the UK, so I’ve done this three times now: twice in the drinks industry and once in the adtech world. But this could really apply to anyone coming from outside the US.
This may be obvious to most people in this room if you’re US-based, but most of us in Europe — certainly in the UK — think of the US as one place, not as a collection of different states and different jurisdictions. Understanding the quirks between each state, the compliance requirements, tax, distribution, and so on, is really important. That may be second nature to anyone from this market, but from experience, it really isn’t common language in Europe. And speaking of language — this applies not just to compliance or finance, but to brand building especially. A lot of UK brands come to America and talk in the same way that worked very successfully in the UK or Europe, but it doesn’t land here. It’s really important to consider that from both a compliance and a brand-building perspective.
Jake Mackay (2:16)
The US is expensive, and it’s getting more expensive. There are, as was mentioned in the previous session, multiple layers of cost. For example, California is a big focus for us given the NA category, but the cost of operating there is significantly higher than somewhere like the Pacific Northwest. Really understanding that and doing your homework on it is vital. And then there are all of your partners to consider — who are you going to work with from an import perspective, from a tools and software perspective, and in terms of advisers? A lot of people will come to you and offer what sounds like free advice. It isn’t free. You’ll get a lot of it, and very quickly your supply chain can break or your models won’t add up. So it’s really important to do your homework on all of this.
In terms of a step-by-step guide, the first question is whether you’re importing or producing locally — and that’s quite a significant decision. For the first time, we’re actually going to start making our product from the outset in the US. Quite often, businesses from the UK in particular will send an initial batch production from the UK into the US to establish the supply chain, and then look for somewhere to co-pack in the US. We’ve decided to start producing in the US from day one. There may be very good reasons why you have to import — Scotch whisky is a great example, or any product with a protected geographical designation. But one of the most important things you have to do from the outset, regardless of whether you’re importing or producing, is set up a US entity. Many retailers will only engage with a US business. I’ve tried in the past to engage with US retailers as a UK business, and a lot of them simply won’t do it.
Jake Mackay (4:18)
Your business structure is a really important point — both legally and financially. I won’t dwell on the legal side as that’s very much Ryan’s area of expertise, not mine. But on the question of LLC versus corporation: from a US perspective, you’ll probably be told by a tax adviser that it doesn’t really matter. From a UK perspective, it does — there are some potential tax issues down the line if you are an LLC rather than a corporation. Just bear in mind those kinds of quirks and nuances, as they will vary depending on your home country or jurisdiction. Make sure you get advice from both jurisdictions — both the US and your home market. And of course, obtaining your EIN from the IRS is crucial.
If you’re going to create your own facility, the next step covers facility setup and registration. If you’re not, you can skip this section — but it’s important to ensure that your production partner is adhering to all of this. So: local and state licensing, checking zoning laws to confirm you can actually operate a facility in a given area. Where we’re currently looking outside of Hudson, we’ve had to verify that the location is zoned correctly for what we’re trying to do. Then there’s applying for all the correct business permits and licences. If you’re constructing or adapting an existing space, you need to ensure everything adheres to FDA Good Manufacturing Practices — including sanitation, clean water supply, drainage, and so on. This might sound obvious, but these are the sorts of things I’ve seen overlooked in the past. And then ensuring all the correct environmental regulations are met before you can finally register your facility with the FDA, which is a vital step.
Jake Mackay (6:19)
The next step is FDA compliance. Complying with FDA or TTB requirements — and making sure you know which one applies to you — is critical. Beyond that, there’s allergen labelling, good manufacturing practices, and HARPC, which is the FDA-specific version of what you might know more broadly as HACCP.
Then there’s operations and quality control. If you’re outsourcing your production, you can skip this step, but it’s important to know that your production partner is adhering to all of it. This is fairly standard globally, but it’s very important to consider specifically for the US market: training employees correctly, ensuring all standard operating procedures are in place, correct product testing, and thorough record-keeping — which is a vital, vital part of this. Be prepared for an FDA inspection, which could happen at any point and unannounced. Making sure you comply with everything the FDA sets out ahead of time is essential.
Jake Mackay (7:42)
When it comes to marketing and claims, avoiding unsubstantiated health claims might seem obvious, but there’s a nuance here too. Coming from the UK, where regulations around adaptogens and health claims are actually much stricter — we can’t make any claims whatsoever, not even tangential ones — you may find that in the US you have more opportunity to speak positively about certain attributes of your product. But again, this is something to discuss with legal advisers. Do consider that those nuances exist, and there may be an opportunity for you there.
Understanding local taxes and regulations brings us back to the point about the US state system versus federal — the idea that each state operates somewhat independently is not something you’d naturally be thinking about coming from the UK. And then ingredient sourcing: where is everything coming from? Is it all from within the US, or are you importing some ingredients from outside as well?
Jake Mackay (8:51)
To quickly recap: the five steps are, first, decide whether you’re importing or producing locally, and either way I strongly recommend setting up a US business entity. Second, facility setup and registration if you’re building or adapting your own site. Third, ensuring FDA compliance, I know of other UK businesses in this space, which I won’t name, that launched without FDA compliance initially, and it caused an enormous amount of problems down the track. Fourth, operations and quality control. And fifth, the additional considerations we’ve just covered.
If I could give you one piece of advice having done this many times: treat each state separately as its own nation. The US is a wonderful country, but from a European perspective it is really a collection of many countries within one. Think carefully about common language. And consider your costs and margins carefully, a model that works in the UK or Europe can quickly come under pressure once you start adding layers of cost: getting product to the US, additional distribution layers, and so on, can really eat into your margins and ultimately your profitability.
The other thing, and Ryan touched on this with distribution contracts — is payment terms. Your terms might be 30 days, but if you’re sending product from France, for example, it’s been on the water for a long time, it’s been a while since you made it, a while since you paid for it, and on top of that it’ll be however many more days before your US distributor pays you. That additional lead time in terms of cash and working capital management might sound obvious, but it’s the sort of thing businesses do forget to look at in detail.
And finally, build your partnerships and work your network. There are so many people out there who can help you figure out the things you don’t yet know. Seek the right advice, and above all, do your homework. Thank you very much.
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