San Diego’s craft brewing industry, long recognized as one of the most influential in the country, is increasingly betting on non-alcoholic beer as the segment experiences explosive growth. The nonalcoholic beer segment grew by over 22% in 2025, surpassing $1 billion in U.S. sales and accounting for roughly 87% of all nonalcoholic beverage sales in the country, according to the Beer Institute.
Once unthinkable, nonalcoholic beer now accounts for 2% of total American beer sales. The majority of purchasers fall into the Gen Z category, but its appeal spans nearly every age demographic, with consumers reaching for those products for a multitude of reasons. San Diego, home to some of the most innovative craft breweries in the nation, is at the forefront of this transformation.
According to the San Diego Union-Tribune, San Diego is home to the larger of two bicoastal production headquarters for Athletic Brewing, the nation’s largest nonalcoholic beer producer. Athletic took over a pair of Miramar facilities previously operated by Ballast Point Brewing, including the county’s largest craft brewery. As a company, Athletic brewed 480,000 barrels of nonalcoholic beer in 2025, making it the sixth-largest craft brewing company in the U.S. and the 15th-largest overall beer producer.
Athletic’s dominance in the market is well documented, but the 8-year-old juggernaut is not the only local player. Numerous San Diego County craft brewing operations now produce nonalcoholic beers, and the movement is gaining momentum across the region’s brewing community.
AleSmith Brewing, one of San Diego’s most decorated breweries, began experimenting with nonalcoholic beer in 2020. The Miramar outfit’s brewing team committed well over a year to research and development, investing in pricey pasteurization equipment and working diligently to nail down process controls before releasing AleSmith Non-Alcoholic IPA in 2022. A de-alcoholized coffee-infused beer called N/A Speedway, loosely based on AleSmith’s popular Speedway Stout, followed in 2024.
“In the tasting room, the (nonalcoholic) beers have found a natural place,” says Kristen Ballinger, marketing communications manager for AleSmith. “Designated drivers, guests who are pregnant, and people who just want to moderate that day can still be part of the experience and enjoy something worth drinking rather than defaulting to water or soda.” Ballinger reports that AleSmith’s nonalcoholic beers have found success via distribution channels across California, Arizona, Minnesota, Ohio, and several other markets.
Vista-based Pure Project Brewing recently joined Athletic and AleSmith, introducing its first pair of nonalcoholic beers: a Noble-hopped blonde ale dubbed Sunsip and a West Coast IPA called Grounded. Brewer Winslow Sawyer and his team focused on matching the vibrant flavors of their traditional beers. “I believe that the modern craft beer flavor profile was missing from the world of N/A beer,” says Sawyer. “Until recently, only the large macro breweries had N/A versions of their standard offerings. Craft beer is still underrepresented in the segment and has a huge opportunity to grow.”
Not every local brewery has found success in the space, however. Karl Strauss Brewing, San Diego’s longest continuously operating post-Prohibition brewery, produced a nonalcoholic version of its bestselling Red Trolley Ale in 2025 as a special for Dry January. While it performed decently at the company’s nine Southern California brewpubs, customers overwhelmingly preferred the normal, alcoholic version of the Irish-style red ale.
“We have spent the past 37 years making calculated decisions based off long-term trends and working to stay innovative without chasing trends,” says Chad Heath, COO of the company’s Beer Division. Instead of producing its own nonalcoholic beers, Karl Strauss has partnered with other industry friends to distribute their N/A offerings to its brewpubs and accounts.
Perhaps the most ambitious new entrant is Monday Morning Lab, which operates bottle shops in Ocean Beach and Pacific Beach that exclusively sell nonalcoholic beverages. CEO Zane Curtis has seen business boom over the past two years, prompting him to purchase the San Marcos production facility previously belonging to Creative Creature Brewing. Working with experienced brewers, Curtis is equipping the brewery to produce a variety of nonalcoholic beverages under the Monday Morning label.
Curtis plans to go beyond producing his own beers by offering white-label beverages for restaurants and contract-brewing for other craft beer companies, representing an evolution in San Diego’s sans-alcohol scene. “Our contract-brewing focus is primarily on craft breweries that want to expand into the N/A space without the overhead of a separate production line, as well as emerging N/A brands looking for a production partner with genuine category expertise,” Curtis said.
Looking ahead, Curtis has high hopes: “Over the next decade, I believe N/A beer will become a standard category expectation at every serious bar, restaurant, and bottle shop, not a specialty item. As production quality keeps improving and more craft players enter the space, the category will mirror what happened with craft beer itself.”
For San Diego’s brewing industry, the nonalcoholic trend represents both a new revenue stream and a way to maintain relevance in a changing beverage market. With the city’s reputation for brewing innovation, San Diego is well positioned to lead the next chapter of the nonalcoholic beer movement.
