As the non-alc category continues to grow, few people have had a front-row seat to its evolution quite like Heidi Dillon, CEO of Distill Ventures. With a career that spans health-focused consumer brands and beverage industry innovation, she has helped shape how brands meet the modern consumer’s demand for balance, moderation, and quality.
In this interview, Heidi shares how her experience in wellness-driven marketing informs her approach to helping build the next generation of beverage brands. She discusses the shift toward holistic wellness in consumer behavior, the early educational efforts behind non-alc spirits, and what makes a non-alc brand sustainable in today’s competitive market. She also offers valuable advice for entrepreneurs entering the space, emphasizing the importance of taste, accessibility, and consumer education.
Dry Atlas: Let’s talk about your origins pre-Distill Ventures. You’ve been at the forefront of several health-focused consumer brands over the course of your career. How has your experience in wellness-driven marketing shaped your approach to Distill Ventures?
Heidi Dillon: Early on, I was fortunate to be at a transformational moment with Clif Bar, which set the trajectory of my career. I see my journey as transforming individual category spaces within CPG. For example, with athletic bars, we had PowerBar and Balance Bar focusing on performance, but with Clif and Luna Bar, we introduced products designed specifically for women’s nutrition, which was groundbreaking at the time.
That same consumer-first thinking carried through to snack foods. I helped bring protein into snacking with Somersaults, and even into Starbucks, where we worked on making baked goods “better for you” and more sustainable. Across these categories, it was about listening to consumers and meeting them where they were.
When I shifted into beverage, wellness was already top of mind for consumers, but it became even more significant with changing lifestyles. If you apply the same principles—listening to the consumer, understanding their needs, and delivering products that align with moderation and inclusivity—you can see how that naturally led me to Distill Ventures.
DA: Tell us a bit more about Distill Ventures.
HD: Distill Ventures is the world’s first accelerator dedicated to helping founder-led drinks brands grow and succeed. We partner with visionary entrepreneurs who are shaping the future of beverage, providing them with the resources, expertise, and support they need to build iconic brands. With over a decade of experience and the backing of our investment partner, Diageo, we’ve established ourselves as a leader in both the drinks industry and the venture space.
The idea for Distill Ventures came from a simple realization: the biggest players in the drinks industry move too slowly to keep up with shifting consumer trends, leaving gaps in the market. Meanwhile, founder-led brands are often the first to spot these opportunities, but they lack the resources to scale quickly. We saw the potential for these independent brands to reshape the industry and knew that with the right investment and guidance, they could go from niche ideas to major global players. We built Distill Ventures to bridge that gap and give entrepreneurs the tools they need to succeed.
DA: As an entity backed by a major spirits company, did you face any skepticism or pushback as you started to focus more on the non-alc category?
HD: There are always skeptics, but I wouldn’t call it outright pushback. It was more about a lack of understanding and familiarity with the category. Bartenders, who are on the front lines of consumer demand, were frequently being asked for no- and low-alcohol options, yet they didn’t have the tools, products, or training to properly meet that demand. The initial hesitation wasn’t about whether the category had potential but rather about how to integrate it seamlessly into existing beverage programs. Once we introduced well-crafted solutions that maintained the complexity and depth of traditional cocktails, bartenders quickly recognized the value and became some of the strongest champions for these products.
Early on, we intentionally leveraged our on-trade relationships to build credibility and accelerate awareness in the hospitality world. We worked closely with some of the best bars globally, as well as Michelin-starred restaurants, to introduce non-alcoholic options in settings where presentation, taste, and craftsmanship mattered deeply. By positioning these products at the highest level of hospitality, we demonstrated that no- and low-alcohol drinks weren’t just a passing trend but a legitimate offering. It was about education, exposure, and shifting perceptions. The more people saw these options integrated into respected establishments, the more they recognized the broader cultural shift happening in drinking habits. Inclusivity in hospitality became a key focus, and once venues embraced the idea, consumer demand continued to drive the category forward.
DA: Looking at the broader trend of wellness in beverages, what do you think continues to drive the shift toward moderation today? How do you see consumer drinking habits evolving?
HD: You have to look at the whole person. Holistic wellness isn’t limited to one category. It’s shaping behavior across the board. We’ve seen major shifts in food, where plant-based, dairy-free, and organic options have gone mainstream, and alcohol-free follows the same pattern. Consumers are approaching their choices with flexibility rather than strict rules. If you look at a grocery cart today, you’ll often see a mix of traditional and alternative products, like dairy milk alongside oat milk or plant-based protein next to meat. That same mindset applies to alcohol, where people aren’t necessarily giving it up but are incorporating non-alcoholic options alongside their usual choices. It reflects a broader shift toward personalization, where consumers choose products based on how they want to feel rather than sticking to a one-size-fits-all approach.
Beyond that, there’s a growing focus on long-term well-being. Consumers are paying more attention to longevity, sleep quality, mental health, and overall energy levels, and alcohol consumption is now part of that broader equation. Younger generations are leading this shift, integrating wellness into every aspect of their lives. Many are taking a situational approach, choosing when alcohol fits and when it doesn’t, rather than following an all-or-nothing mindset. As this perspective gains traction, moderation is becoming less about restriction and more about making thoughtful choices that align with how people want to live.
DA: Let’s shift to the non-alc consumer. What stands out to you about them today?
HD: First, it’s important to recognize that 94% of non-alcoholic beverage buyers also purchase alcohol. This means brands have the opportunity to leverage elements of traditional spirits—such as provenance, aging techniques, and complexity—to create products that appeal to a broad audience. Consumers who are buying non-alcoholic options often already understand the nuances of spirits, wine, and beer, which allows for more sophisticated formulations that mimic those same characteristics in a non-alcoholic format. That’s a significant opportunity for brands that can strike the right balance between familiarity and innovation.
At the same time, we’re seeing a notable rise in consumers who don’t drink alcohol at all. This is especially true among Gen Z, where 82% of consumers say that abstaining from alcohol is a top priority. For this group, the decision to drink or not drink isn’t just about one night or one event. It’s an embedded lifestyle choice that influences their broader approach to health and wellness. As a result, we’re seeing some founders approach non-alcoholic beverages from a completely different angle, not as a replacement for alcoholic drinks, but as an entirely new category of beverage that offers unique flavors, functional benefits, and social experiences. This opens up exciting pathways for innovation, from products designed for specific occasions to drinks that emphasize wellness or sensory experiences in ways we haven’t seen before.
DA: Where do you see the biggest opportunities for innovation in non-alc?
HD: The biggest opportunity isn’t necessarily product innovation itself—it’s consumer education and accessibility. Many venues still don’t carry non-alcoholic options, or if they do, they’re hidden on the menu. Before brands focus on complex innovation, they need to ensure consumers can easily find and understand these products. The real challenge is making non-alcoholic options more visible, approachable, and naturally integrated into hospitality and retail settings.
That said, innovation is absolutely happening, especially in functional beverages. More brands are incorporating adaptogens, nootropics, and botanicals to add benefits beyond being alcohol-free, whether for relaxation, focus, or energy. We’re also seeing a greater emphasis on provenance, with brands borrowing from winemaking, fermentation, and distillation techniques. Many are using regional ingredients or historical methods to create depth and complexity, helping non-alcoholic drinks reach the same level of craftsmanship as high-end alcoholic beverages.
Another key area of growth is ready-to-drink (RTD) non-alcoholic cocktails. While RTD alcoholic cocktails have taken off, non-alcoholic versions are still catching up. The challenge is maintaining cocktail complexity while making them convenient and shelf-stable. Brands that can solve this will have a major opportunity, as consumers want high-quality options without having to mix ingredients themselves. Convenience will be a key driver in expanding the category.
DA: What signals indicate a new non-alc brand has staying power?
HD: Several factors come into play. First and foremost, the founder’s vision is critical. Do they deeply understand what consumers want—or better yet, what consumers will want before they even know it themselves? Consumers don’t always have the vocabulary or reference points for new products until they’re introduced to them. If you had asked most people ten years ago if they wanted a non-alcoholic spirit, they probably would have been confused. It took visionaries in the space to create the category, educate consumers, and make it a viable alternative. That same kind of forward-thinking approach is essential today.
Beyond the vision, the liquid itself has to be exceptional. No matter how compelling a brand’s mission or marketing is, if the product doesn’t taste good, it won’t have longevity. Consumers need to have a great experience the first time they try it, and they need to want to come back to it. The best products create an emotional connection, where people don’t just enjoy drinking them but also feel like they align with their identity and lifestyle. That’s the third critical factor. Does the brand seamlessly fit into how consumers live? The strongest brands are the ones that become part of people’s routines, social occasions, and sense of self. If a brand can achieve that, it has the potential to not just survive but thrive in the long run.
DA: When deciding to bring a brand into the Distill Ventures portfolio, what are the top factors that influence your decision?
HD: We look at several key factors, but one of the most important is traction. What kind of momentum is already building around the brand? Are consumers responding to it in a meaningful way? Have retailers and distributors shown interest? A brand doesn’t need to be a household name yet, but we want to see indicators that there’s organic demand and a product-market fit. Founders who are actively testing, learning, and iterating based on real consumer feedback tend to have an edge.
We also assess the founders’ commercial awareness and ability to scale. Do they understand the complexities of the industry? Are they prepared for the challenges of distribution, pricing, and retail placement? Beverage is an incredibly tough industry, and even the best ideas need strong execution to succeed. Founders who have experience in the space—or who are eager and capable of learning quickly—tend to fare better in the long run.
Finally, we evaluate adaptability. The beverage industry moves fast, and founders who are too rigid in their approach can struggle to keep up. We look for teams that can pivot when necessary, respond to market shifts, and continuously improve their product and positioning. A great brand isn’t built in a straight line. It requires constant refinement and a willingness to evolve. If a brand shows promise in all of these areas, it has a strong foundation for growth.
DA: Once a brand joins the Distill Ventures portfolio, how do you help them successfully scale?
HD: We take a structured approach to ensure their growth is both strategic and sustainable. The first thing we do is establish clear proof points for success within the first year. What do we need to validate about the brand to confirm it has long-term potential? That could mean demonstrating strong velocity in retail, proving demand in on-premise venues, or solidifying a compelling brand identity that resonates with consumers. By defining these proof points early, we create a roadmap for what success should look like.
To help brands execute on this, we provide hands-on guidance through our acceleration team, which is made up of experts across several critical areas: talent development, operations, brand marketing, and distribution strategy. For example, distribution in the beverage industry is notoriously complex, especially within the three-tier system. Our commercial team specializes in helping brands navigate this process, ensuring they understand how to work with distributors, secure placements, and scale their market presence effectively.
That said, we don’t do the work for them. These are founder-led businesses, and our role is to act as strategic partners who provide expertise, resources, and guidance while still empowering founders to drive their own success. We also focus heavily on team-building, ensuring that the right people are in place to support growth. If a founder is spending too much time on operational tasks rather than focusing on high-level strategy, we work with them to build out the right team structure so they can stay focused on what they do best. Ultimately, every brand is different, and we tailor our support to meet their specific needs. But across the board, our goal is to ensure that when a brand is ready to scale, it has the right foundation in place to do so successfully.
DA: What advice would you give to entrepreneurs entering the market?
HD: My biggest advice is to stay focused on the fundamentals. It’s easy to get caught up in trends or flashy branding, but the best brands solve real consumer problems. Ask yourself: Why does this product need to exist? What gap is it filling? How does it fit into consumers’ lives in a natural and desirable way? Many consumers still don’t know how to integrate non-alcoholic options into their routines, so clear communication on when, why, and how to drink your product is essential. If there’s confusion, adoption will be slow.
Taste is non-negotiable. No matter how strong your mission or branding is, if the product doesn’t taste great, people won’t come back to it. Consumers may try something once out of curiosity, but for real success, your liquid has to overdeliver. Non-alcoholic options have historically been seen as an afterthought or a compromise, so the bar is high. If you’re not creating something people genuinely enjoy drinking, no amount of marketing will make it a long-term success.
Finally, accessibility is critical. Even the most innovative product won’t gain traction if consumers can’t easily find it or try it in a way that feels effortless. Whether through bars, restaurants, retail, or direct-to-consumer channels, getting your product into the right spaces matters. If consumers have to go out of their way to track it down, that’s friction. The strongest brands combine a clear market need, an outstanding product, and smart distribution strategies to ensure they’re not just creating a great beverage but one that people can—and want to—choose again and again.
This interview has been edited for length and clarity.
