Finding future demand with Lisa King, Founder of AF Drinks
Lisa King is the Founder of non-alcoholic cocktail brand AF Drinks. The brand was founded in New Zealand and expanded into the United States in 2023, but prior to 2020, this fast-moving product category was practically non-existent, while some people laughed at the concept of a non-alcoholic drink.
So, what changed in the minds of consumers to create demand, and how did Lisa spot the opportunity to start a business in this up-and-coming category? For further reading, check out our article, the rise (and rise) of the non-alcoholic beverage industry
Tracksuit: The idea for AF drinks came about from your own journey on cutting back on alcohol. At what moment did you realize that there were more people like yourself out there and there was going to be significant future demand for non-alcoholic beverages?
Lisa King: It happened just before we went down into our first lockdown in New Zealand when I decided to stop drinking for a while. A few people in my inner circle had given up drinking so it wasn’t completely new to me, but when I was looking at the overseas data this term ‘sober curious’ kept coming up about this movement. It was really interesting to see the first few brands coming out: Seedlip, and then when a brand like Heineken gets onto this, you go ‘Okay, there’s got to be something in it.’
It doesn’t take a lot to figure out there are all these moments when people don’t want to drink. You’ve got to drive, or you’ve got kids. I've talked to lots of parents, and no one wants to be hungover on a Saturday morning. So I think there was enough compelling evidence for me to go, ‘I think there is something in this’. When we first introduced AF to NZ in 2021, there were a lot of people that were like ‘Why would you ever have a G&T without Alcohol?’
It was really interesting, there was that kind of pushback: ‘What’s the point? Drink water, drink Coke.’ When we did tastings, the minute you told people it was alcohol free they’d be like ‘No thanks’ like it was a really bad thing. That was really fascinating.
If you draw parallels with the tobacco industry, you will see at some point that alcohol is really bad for you, it’s got toxins, it causes cancer, so why we haven’t got our heads around the fact that we shouldn’t be indulging too much in alcohol – it’s so fascinating to me. I do wonder in 5 or 10 years’ time, if people are going to be like, ‘What were we thinking putting that poison in our bodies?’ In the same way we view smoking now. But it has changed really fast and now when we do tastings, no one says ‘I don’t see the point in that’. People now get this concept, we don’t have to explain it – it’s happened relatively quickly in New Zealand.
Non-alcoholic drinks is one of the highest growth industries on Tracksuit. Our data shows category penetration grew 40% from 1.5 million Kiwis in February 2022 to 2.1 million Kiwis in January 2023 and there is similar growth in AU and US too. Why do you think the timing has been right in the last 2 years to make this such a high-growth industry? What has changed in the minds of consumers?
I think there is more of a focus on health, wellbeing and mental wellness. There is also a sense of people wanting to be more productive, we’ve been locked up [due to Covid-19] for two years – you want to do stuff and make the most of each day, and you can’t do that if you’re even a little bit dusty from a night of two drinks. Covid-19 has helped speed up the acceptance of this. A lot of this acceptance is from that younger Millennial group: ‘I don’t want to do what my parents are doing’.
I also have a theory that during Covid-19, the teenagers that would’ve gone out and experimented and got drunk for the first time, they didn’t have the opportunities to do that so they didn’t have that pressure – now it’s like, ‘Why would I do that?’ It just seems stupid, I think they’re more onto it and they don’t have the social pressure like we felt when we were at that age to go out and drink a lot. Timing wise, for AF, it couldn’t be better to be one of the first brands in this category and to lead it.
Centering in on the brand identity of AF Drinks now, what were the key things you wanted to capture in the look and feel?
Intentionally from the beginning, we always wanted to make it feel like a global brand. There isn’t a lot of attachment to New Zealand or the heritage of where it came from, we wanted to make it feel like it could be in any country in the world. Having Arch MacDonnell work on the design – he’s amazing, it feels cool, fresh but also like it’s been around for ages.
It’s got that sophistication about it but still is quite modern in its look and feel. We wanted something people felt good holding in their hand, that would generate some intrigue and interest, and with the marbling it's something quite unique and different.
Everyone we’ve shown the packaging to, particularly overseas now we've launched in the US, they love the packaging and having people like Arch and James and Nick put their amazing creative minds to it, I think we’ve done a brilliant job on the brand and look.
Congratulations on AF Drinks launching in the States! I see that the branding in the US has been adapted to be called Free AF. Can you share a bit more on this?
You'll see through our brand comms we play on the meme ‘AF’, everything’s something AF. In New Zealand the main brand is Curious AF, we couldn’t register that in the US. It’s always hard to register a name globally without its challenges, so the name is AF – that’s the prominent brand – then whatever word we use to describe it, we can change that for each market in our comms. We talk about AF in different ways: it can be sexy, it can be posh, it can be sharp. The structure of our brand means we can be flexible, but AF is always our prominent, primary brand.
It’s also land of the free, so Free AF talks about the lifestyle and the aspiration we want to get across. When you don’t drink you’re free to go do whatever you want, you’re not held back by a boozy night out. Curious talks to the kinds of people who are curious about their relationship with alcohol and how that plays in their life.
What will you be focusing on with AF Drinks for the rest of 2023?
We’re launching in the US and we’ve moved super fast to get to this point. We’re launching with our first national retailer called Sprouts in April which isn’t far away, so we’re focused on gearing up on executing that brilliantly. The States is massive in terms of opportunities, it’s like 50 little countries. We’ll be trying to get AF everywhere.
We saw a big opportunity in the US for us, but in terms of impact and what we wanted to do with the brand – if you can make it in the US, that says a lot about your business and your brand. We’re going to be one of the first brands of our kind in that US retailer as well, we couldn’t pass up that opportunity as well to be leading in that category there.