As interest in wellness stirs up the cocktail world, this executive gets her chance
Transforming Spaces is a series about women driving change in sometimes unexpected places.
Any day of the week, Heidi Dillon hops around Manhattan or San Francisco, popping into bars and settling into one for more than two hours to grill the bartender with various products and cocktails.
But there is a caveat. Don’t barhop for the buzz. With a background in health and wellness-focused marketing and branding that she has applied to coffee, fresh juices, snack foods and “clean” ready-to-drink cocktails, Ms. Dillon is at the forefront of growing no- and low-alcohol beverages. The category finds its place in the alcoholic beverages industry as global spirits manufacturers recognize the increased interest in wellness among consumers of all ages and genders.
Ms. Dillon is Managing Director at Distill Ventures, a company that supports founders and helps them grow their brands in the alcohol industry. Hired in 2018 specifically to develop Distill Ventures’ alcohol-free and low-alcohol portfolio, she is now uniquely positioned in a growing segment of a long-male dominated space. This is reflected in every liquor store, where brands on the shelves are named after distillers and distillery owners of yore – Jack Daniel’s, Elijah Craig, Pappy Van Winkle, George Dickel, Uncle Nearest and Evan Williams.
But the landscape is changing. “Around 70 percent of people drink soft drinks occasionally and occasionally spirits,” Ms Dillon said. “It expands the possibilities for retailers, bartenders and distributors because it’s a lot of the same people that are already serving them. People are drinking less – and there’s a whole younger generation that’s drinking a lot less – and they’re looking for more.”
That means more flavor, more creative substitutes for her favorite spirits, and just more options in general, she said, all in the name of staying clear-eyed, sharp-witted, and hangover-free.
Unless you’ve lived in a bourbon distillery, it’s hard to miss that non-alcoholic cocktails are no longer a niche option reserved for certain drivers and sober people. High-end restaurants and craft cocktail bars alike have added non-alcoholic cocktails to their menus, and shops and bars dedicated exclusively to teetotalers are bustling (if you will) destinations in New York, Los Angeles, Austin, Denver, and elsewhere .
Dry January and sober October, joint practices of abstaining from alcohol as a form of cleansing, are growing in popularity. According to a 2022 survey released by Morning Consult, a market research firm, 19 percent of Americans said they attended Dry January, up from 13 percent in 2021. Among Millennials, the figure is 27 percent.
It has enough followers now that it has fueled an entire lifestyle and a slew of hashtags. (#SoberCurious, #SoberLife, #SoberLiving, #SoberIsSexy.) A trade group, the Adult Non-Alcoholic Beverage Association, was formed in 2021 and currently has 110 members. The rapid growth is due to a number of factors, including millennial awareness of physical health and mental well-being, the broader trend toward clean living, and the growing availability of legal marijuana, which some prefer to alcohol.
According to IWSR, a company that provides analysis of the beverage market, global retail sales of non-alcoholic and low-alcohol products are estimated at over US$11 billion, up from US$8 billion in 2018. As the category continues to grow, non-alcoholic products are driving the increase, and are expected to account for 90 percent of the growth of this subset.
“It’s a misnomer that soft drinks are for sober people,” said Ms. Dillon, a single mother of two from Santa Cruz, California. “We had to prove that it’s not about that. This is about choice. Here’s the thing: maybe one day I’ll lean in like this, another day like that. It’s the idea that a lot of people will switch back and forth between a high-proof drink and a non-proof or low-proof drink over the course of a week — or an evening.”
There is a growing number of products but limited shelf space in bars and shops. So part of Ms Dillon’s job is figuring out how alcohol-free products fit into this broader landscape.
She quickly discovers that zero-proof cocktails have a broader demographic appeal than one might assume. In this health-conscious era, soft drinks are bigger than the cocktail trend du jour. Vegan foods, which were also once a niche market, were a $26.16 billion industry in 2021.
“The beverage industry has a constant mix of tradition and modernity, but I think the traditional side often wins. A tremendous number of the world’s biggest brands speak of a legacy that stretches back 100 years,” said Frank Lamps, co-founder and chief executive officer of Distill Ventures, an independent company funded by Diageo, the global beverage company that produces brands, and Johnnie Walker and Smirnoff. Mr. Lampen added: “One feels that legacy is reflected in the composition of the industry today, which is still fairly 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 with the experience of connecting not only new products but a whole new category to a broad cross-section of consumers .
“We needed someone with the empathy to confront the alcohol-dominated perspective, understand it and see where that takes you,” he said. “Heidi brings an additional strand of thought and experience when it comes to understanding and reaching consumers and connecting our world of alcohol-fuelled occasions with something different and innovative.”
In the spirits industry – especially whiskey – innovation often involves tinkering with the cask type or char level, or incorporating different grains into a recipe for distillation. Soft drinks require a different tactic.
“It’s about developing new flavor profiles and taking inspiration from its spirit counterparts, but taking it to the next level with contributions from the culinary realm and other realms,” said Ms Dillon, noting that the creators of Alcohol-free and low-alcohol brands aren’t tied to the familiar flavors of traditional spirits, but are looking for inspiration beyond beverages. “You look for bitterness, 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. When she worked as a field marketing manager for Clif Bar & Company, she would show up at sporting events, such as handing out the snack to top athletes about to whiz down a black diamond run. Males generally outnumber females. When the company introduced the Luna bar, aimed at women, she became marketing director for this new brand. As well as showing up at events like mountain bike races for pro women, she also helped build lifestyle events like LunaFest, a short film festival featuring female filmmakers, to connect with women beyond the sports world.
“Throughout her career, the idea of equity and inclusion and creating access has always been at the forefront of conversations,” said Lisa Novak, Senior Director of Brand Partnership and Communications at Clif Bar, who has worked with Ms. Dillon during her time as Marketing Manager by Luna. “She always invites women to thrive in male-dominated fields like sport and now spirits. Women who stand for women go beyond each individual product category and help transform the industry.”
As an incubator, Distill Ventures offers brand founders coaching and mentoring 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 start-up brands that are owned and operated by women and minorities. By targeting these startups from underrepresented groups in the industry, Ms Dillon aims to normalize diversity. She wants to get to a moment where someone doesn’t need to be qualified by their gender, race, or sexuality, but is addressed simply by their title.
“It’s her company,” Ms. Dillon said. “So you shouldn’t have to say, ‘I’m the founder’ or ‘I’m the founder of the black people.’ You are just the founder. You don’t need an adjective.”
That sensitivity is clear to Cindy Pressman, who created Atost, a low-alcohol aperitif, with her husband Kyle in 2020. When Distill Ventures invested in it in 2022, Ms. Dillon became her mentor. On numerous occasions, Ms. Pressman said, her husband got the first handshake and most eye contact when they went to a business meeting. She was not used to this from her previous work in the fashion industry.
“I’ve always worked in companies that were mostly women, so stepping into the alcohol industry was definitely a culture shock,” Ms. Pressman said. “Heidi gave me a voice in a really crowded room. She sees me as a person, not a business or an investment or a number. It empowered me to accept my differences and be who I am.”
For Ms. Dillon, prioritizing inclusivity is the most logical way to market a beverage brand.
“This industry is really about bringing people together,” she said. “Why not have a great drink to enjoy on an occasion – it doesn’t matter what proof it is if it still has balance and appeal.”