Kingston craft brewer taps into sparkling new market

Pandemic, shifting drinking habits increasing demand for non-alcoholic beverages
Akwa

We love beer and we need water. Do we have to choose?

Josh Hayter, president of Kingston-based Spearhead Brewing Co., is living happily with both. Though he’s always had a broad range of in-house beers at his elbow, his choices have expanded since last September, when the company introduced a sparkling botanical water called Akwa.

“I just love it,” Hayter says. “I’m drinking six or eight cans a day.”

But there’s a reason Hayter isn’t taking his water from the tap. Akwa, again, is a botanical water, infused with citra and cascade hops. One wouldn’t be far off in describing it as beer made without malt, the product of as much care and attention as the brewing of an ale or a stout.

The actual launch last September in the midst of the pandemic was, Hayter says, “really, really soft – it wasn’t really the moment we would have chosen.” Still, the brewery’s sales team began pushing Akwa to their usual customers, and samples were sent out to journalists who focus on the beverage industry.

“The feedback was really good,” Hayter says. “And now we’re creating a lot of Akwa-themed sales material and sending out samples to a broader group of journalists. I think Akwa is going to be a strong performer for us.”

Growing millennial market

Akwa’s genesis, Hayter says, was in his team’s conviction that drinkers often needed a non-alcoholic choice when facing a night of social drinking.

“Sometimes, you just need a drink that’s sans alcohol – you’re camping with friends, say, and you’re the driver. You want something that doesn’t taste like beer but has something of the ‘feel’ of beer.”

Of course, in the middle of the pandemic, selling water started to seem very attractive. Restaurants, bars and nightclubs were strongly restricted, which put a real crimp in beer sales.

“But water? You can sell that anywhere, no licensed establishment needed,” Hayter says. “We can sell Akwa in lots of places – specialty grocery stores, convenience stores, trendy coffee shops.”

That said, bars have been indicating lots of interest in picking up Akwa.

“We see Akwa cutting into a lot of the demand for Perrier and San Pellegrino.”

“They see an advantage in using something local and good – and we see Akwa cutting into a lot of the demand for Perrier and San Pellegrino.”

Hayter says cocktail bars in particular are taking a shine to the new product.

“They say it’s a really good mixer … fantastic with gin.”

Apart from the exigencies of the pandemic moment, Hayter predicts the market is going to be smiling more and more on sparkling water.

“I’m sure young people, the millennial crowd, are going to buy into sparkling water more and more,” Hayter says. He may be right. No one is saying millennials are giving up alcohol, but there is some soft evidence that they’re drinking less than their forebears. 

At the same time, the market for low- to zero-alcohol beverages is projected to grow by 32 per cent between 2018 and 2022, according to a report by Bon Appétit – and that’s caught the attention of brewers and distillers, big and small.

In eastern Ontario, Spearhead is not alone among craft breweries expanding their product lines beyond beer. Ottawa’s Dominion City, for example, recently launched its own line of seltzers. 

And the opportunities extend beyond tapping into a growing market.  As Hayter notes, profits on Akwa are apt to be a bit higher than those on his beers.

“Not tremendously higher, no – but higher, because there’s no Ontario beer tax on water.”