Alcohol free / low alcohol (any beer with less than 0.5% ABV) beers, the NO-LO category is a new niche segment which has seen consistent growth in the last couple of years. The current approximate size of the no-lo beer category is 15 Bn USD and estimated to reach up to 25 Bn USD by 2025.

In this edition of PAC Talks, Zoey Henderson the founder of Fungtn spoke about her journey : from managing cafes, owning cafes, being a consultant to how she experimented and started the functional beer brand to keep herself busy during the lockdown.

You can listen to this interesting conversation with Zoey where she spoke about the changing drinking habits of people across different global markets, Positive Wellness, Mindful Drinking, No-Lo Alcohol category, how big brands will help the overall growth of this segment, functional benefits of mushroom beer, the current and future plans of Fungtn and a lot more in my podcast (PAC Talks with VJCV) on Apple, Spotify , YouTube.

I was drinking lot of alcohol free beers as my husband and myself had decided to take a break from alcohol. I was sitting in my garden, during March 2020, drinking alcohol free beers in the afternoon. I had mushroom coffee in the morning. I wanted more mushroom in food and was thinking about what can I put it in ? I just took the mushroom powder and stirred into the beer. Once it settled down, the taste was good.”

The Beginning of Fungtn

Zoey Henderson has created a niche within this niche and is giving people one more option, a chance to pick up an adaptogenic functional low alcohol beer.

Sitting in her house in North Wales, United Kingdom, Zoey is single handedly managing Fungtn, a craft beer brand. A myco adaptogenic low alcohol beer brand born in North Wales, courtesy an experiment with mushroom and beer.

It is always interesting to observe how people sometimes look back to the start of their career and have a big smile. Straight out of the university, Zoey got a chance to work with an advertising agency for a short period. She started her first business when she was 26. Zoey opened a smoothie / fruit bar called Moosh and later owned a coffee shop called Slate Coffee, in the east of London. Later on she picked up the mantle of consulting to help brands understand the nuances of marketing, simultaneously promoting and talking about positive wellness and mindful drinking. In the midst of all these, Zoey also managed events and festivals and restaurant groups. This give her an all around experience of the hospitality industry.

This experience helped Zoey to understand the consumers, track the change in the habits of people, and also her initial stint with advertising made sure that the focus on brand elements and brand building of Fungtn was given equal importance as the taste and quality of the product.

I came across these functional mushrooms eight years ago. They are called the adaptogens. I was quite stressed and was looking for herbal remedies. I researched them and sparked interest. These mushrooms are used in super foods for thousands of years.

As of now, Fungtn has the unique proposition of being the only functional beer in the market made from mushrooms. The name Fungtn comes from a combination of ‘Functional and Fungi’.

Zoey added that this is an unusual concept for some people. People have their thoughts about the beer – will it taste like mushroom ? will it get me high ? and she said the answer for both questions are No.

Functional mushrooms known as Adaptogens are simply herbs and fungi that contain additional compounds. They give nutrition that help the body adapt to stress and keep mind & body on good form.

The basics of Adaptogens as told by Zoey

The market for No-Lo alcohol beer has slowly and steadily seen an adaptation from consumers. The big brands like Heineken, Carlsberg have spent loads of money in bringing out their own version of 0.0 beers and an equal amount in marketing them. It was just few months ago when the famous Guinness Beer also joined this party.

The common norm that parties, functions, celebrations, etc always needs alcohol and the way big brands market around this concept has been there for ages. Now people have started to look for options. Whether the celebration can be more inclusive or have more options ?

No-lo alcohol beers have started making their presence felt in this. There are a handful of brands who have brought out 0.0 Wine and Gin as well. So this space is growing.

As per the reports, Millennials are the major target segment of this beer category. This might be because of their move towards a more responsible and healthy lifestyle.

Zoey is very happy to see the big brands spending money on marketing this category. As per her, the market will start moving when it becomes normal to drink an alcohol free drink. The big brands will have a huge role to play in making this happen.

It is a great indication that the Big Boys are joining in and kind of thinking we need to step up. Brilliant, come in , spend your millions in marketing to help and make alcohol free drinking main stream.

This in turn will increase the shelf space in the supermarkets for this category. There are already two alcohol free licenses which has opened up in London.

People who wanted to positively, actively do something to help. What is the easiest way to do that, by focusing on what you eat and drink. The food and drinks they consume have a direct effect in their health. So if we can start integrating healthier, botanicals, herbs, adaptogens into those foods and drinks then it is a feature and people are moving towards it.

Zoey talking about Positive Wellness

Another important point mentioned by Zoey was about the way in which market should move ahead in the coming years. She said that it is about giving a choice to consumer and be flexible. Mindful drinking has been in the mind of many consumers. So it is all about the balancing act. Overall this helps to move towards a positive wellness.

In addition to this , she also emphasised on the importance of educating the Waiters. If a customer asks for a soft drink then try to give them an option of non alcoholic beers which might in turn help in getting them spend more time and money on food and beverage compared to just drinking one or two glasses of juice or soda which might kill the appetite as well.

Currently three variants of Fungtn made out of three types of mushrooms, Reishi, Lions Mane and Chaga, are available in the market. These beers have less than 0.5% ABV (Alcohol By Volume).

It is a matter of science. Molecules and elements come together to make flavour profiles. We just need to find the science to work out what it is.

Zoey talking about experimenting with elements

Talking about sales, Zoey mentioned that over the summer , the sales of Reishi went up as it is lighter, during winter & Christmas, the sales of Chaga went up and Lions Mane has been our classic IPA which goes well across seasons.

Zoey is also excited about her NPD. The focus is to bring out a completely alcohol free beer. One of the main reasons for this is to tap into the Middle East market. She spoke about the way in which the Middle East market has started adopting the social aspects of celebration minus the alcohol. The younger generation in this market wants to enjoy but staying true to their traditional and cultural values. Alcohol free beers will be a great offering to this market who have not tasted beers but now has an opportunity to experience a zero alcohol beer.

She is also going to embark on a research project with a university in North Wales and another Welsh business that cultivates mushrooms to look at how more tailored extracts of mushrooms can be derived which enables to talk about the benefits of Vitamins and functions about them.

With the Lions Mane IPA already winning awards, the future plan is to expand to new markets. Fungtn is now available in Europe and Singapore. Plans are already in place to start the sales in the USA and Canada followed by Australia and other markets.

Fungtn started as a bootstrapped startup and got some support from the government. Currently has 2 angel investors. This week is going to be an important one for Zoey and Fungtn. The fund raising is happening and she is looking to raise a little more than 200k Pounds.

Zoey is looking to expand her business, recruit people, move from a brand completely managed by one woman to having people employed to support the growth of the brand.

The future will be all about integration, as always, bringing together the two worlds. When I go into a bar , I want to see half the menu with alcohol free and half the menu with alcohol. It is about giving the flexibility. There are still people who have a healthier relationship with alcohol.

added Zoey about where the market is heading towards

I am sure , Zoey and Fungtn are going to have a roller coaster ride for the next couple of years in taking this Mushroom revolution to the next level. One thing for sure , the celebration of each milestone will see lot of alcohol free beers getting opened up. It is definitely a great time to get into this category and hope to see them growing steadily & going places.

You can read more about Fungtn here.

Thank you to Nicola and The Virgin Mary Bar for making me aware about brand Fungtn.