As Interest in Wellness Stirs Up the Cocktail World, This Executive Gets Her Shot

“Transforming Spaces” is a series about women driving change in sometimes unexpected places.

On any given weeknight, you might find Heidi Dillon hopping around Manhattan or San Francisco, ducking into bars and settling in at one of them for two-plus hours, grilling the bartender on various products and cocktails.

But there’s a caveat. She doesn’t barhop for the buzz. With her background in health- and wellness-minded marketing and branding, which she has applied to coffee, fresh juice, snack food and “clean” ready-to-drink cocktails, Ms. Dillon has landed on the forefront of the growing no- and low-alcohol drinks sector. The category is finding its place within the alcoholic drinks industry as global spirits producers recognize the heightened interest in wellness from consumers across a broad range of age and gender.

Ms. Dillon is the managing director at Distill Ventures, a company that supports founders and helps them grow their brands in the alcohol industry. She was recruited in 2018 specifically to develop Distill Ventures’ no- and low-alcohol portfolio, and she is now uniquely positioned in a growing segment of what has long been a male-dominated space. That is reflected in any liquor store, where brands lining the shelves are named for distillers and distillery owners of yore — Jack Daniel’s, Elijah Craig, Pappy Van Winkle, George Dickel, Uncle Nearest and Evan Williams.

But the landscape is shifting. “Around 70‌ percent of people drink alcohol-free drinks occasionally and spirited drinks occasionally,” Ms. Dillon said. “It’s broadening the opportunities for retailers, bartenders and distributors because it’s a lot of the same folks they’re already serving. People are drinking less — and there is a whole younger generation that drinks significantly less — and looking for more.”

That means more flavor, more creative substitutes for their favorite spirit and just more options in general, she said, all in the name of staying cleareyed, sharp-minded and hangover-free.

Unless you’ve been living inside a bourbon distillery, it’s hard to miss the evidence that no-alcohol cocktails are no longer a niche option, reserved for designated drivers and people who are sober. High-end restaurants and craft cocktail bars alike have added booze-free cocktails to their menus, and shops and bars dedicated exclusively to abstainers are buzzy (if you will) destinations in New York, Los Angeles, Austin, Denver and elsewhere.

Dry January and Sober October, communal exercises in forgoing alcohol as a cleanse, of sorts, have grow in popularity. According to a 2022 survey released by Morning Consult, a market research firm, 19 percent of Americans reported that they were participating in Dry January, up from 13 percent in 2021. Among millennials, it’s 27 percent.

There are now enough devotees that it’s spurred a whole lifestyle and a slew of hashtags to go with it. (#SoberCurious, #SoberLife, #SoberLiving, #SoberIsSexy.) A trade group, the Adult Non-Alcoholic Beverage Association, was founded in 2021 and currently has 110 members. The rapid growth is because of a number of factors, like millennial awareness of physical health and mental well-being, the broader clean-living trend and the growing availability of legal marijuana, which some are choosing over alcohol.

According to IWSR, a firm that provides analysis of the drinks market, global retail sales of no- and low-alcohol products are valued at over $11 billion, up from $8 billion in 2018. As the category continues to expand, nonalcoholic products are driving the increase, and are expected to make up 90 percent of the growth of that subset.

“It’s a misnomer that nonalcohol drinks are for sober folks,” said Ms. Dillon, a single mother of two young daughters based in Santa Cruz, Calif. “We’ve had to prove that’s not what it’s really about. This is about choice. This is about: I might lean this way one day, this way another day. It’s the idea that over the course of a week — or one evening — many folks flip back and forth between a higher proof and a no-proof, or low-proof, drink.”

There’s an increasing number of products, but finite space on shelves at bars and stores, so part of Ms. Dillon’s work is to figure out how spirit-free products fit into that wider landscape.

She’s quick to note that zero-proof cocktails have broader demographic appeal than one might assume. At this health-conscious moment, alcohol-free drinks are bigger than the cocktail trend du jour. Vegan food, after all, also once a niche market, was a $26.16 billion industry in 2021.

“The drinks industry has a constant mix of tradition and modernity, but I think the tradition side often wins out. A tremendous number of the biggest brands in the world talk about heritage that stretches back 100 years,” said Frank Lampen, a co-founder and chief executive of Distill Ventures, an independent company funded by Diageo, the global beverage company that produces brands including Johnnie Walker and Smirnoff. Mr. Lampen added, “There’s a feeling that that heritage is reflected in the makeup of the industry today, which is still quite male-dominated.”

To lead the nonalcohol division of the company, Mr. Lampen sought someone who could bring a different perspective to the role, someone who had the experience to help connect not just new products, but also a whole new category, to a broad cross-section of consumers.

“We needed someone with the empathy to engage with and understand the alcohol-dominated perspective and see where that takes you,” he said. “Heidi brings an additional strand of thinking and experience in terms of understanding and reaching consumers and how to marry our world of alcohol-driven occasions with something different and innovative.”

In the spirits industry — whiskey in particular — innovation is often a matter of tinkering with the barrel type or char level, or incorporating different grains into a recipe for distillation. Nonalcoholic drinks require a different tactic.

“It’s about developing new flavor profiles and drawing inspiration from the spirits counterparts, but taking it to the next level with input from the culinary realm and other areas,” Ms. Dillon said, noting that creators of no- and low-alcohol brands are not bound to the familiar flavors of traditional spirits, so they look beyond drinks for inspiration. “You’re looking at bitterness and length and mouthfeel, but how do you achieve and balance all that without the alcohol?”

This isn’t the first time Ms. Dillon has made strides in an industry largely run by men for men. When she worked as field marketing manager for Clif Bar & Company, she’d show up at sporting events and distribute the snack to, for instance, elite athletes about to barrel down a black-diamond run. Men typically outnumbered women. When the company introduced the Luna Bar, aimed at women, she became marketing manager for that new brand. She not only showed up to events like pro women’s mountain biking races, but she also helped grow lifestyle events, like LunaFest, a short-film fest showcasing female filmmakers, to connect with women beyond the sports world.

“Throughout her career, the idea of equity and inclusion and creating access has always been at the forefront of the conversation,” said Lisa Novak, the senior director of brand partnership and communications for Clif Bar, who worked with Ms. Dillon during her time as Luna’s marketing manager. “She’s always inviting women to thrive in male-dominated spaces, like sports and now spirits. Women standing for women transcends any individual product category and helps industries transform.”

As an incubator, Distill Ventures provides coaching and mentorship to brand founders to help them grow their company. Within the no- and low-alcohol division that she oversees, Ms. Dillon has made it a priority to focus on start-up brands owned and run by women and minorities. By focusing on these start-ups by underrepresented groups in the industry, Ms. Dillon aims to normalize diversity. She wants to get to a moment when someone doesn’t need to be qualified by their gender or race or sexuality, but is simply referred to by their title.

“It’s their company,” Ms. Dillon said. “So they shouldn’t have to say, ‘I’m the female founder’ or ‘I’m the Black founder.’ They’re just the founder. They don’t need an adjective.”

That sensibility rings clear to Cindy Pressman, who created Atost, a low-alcohol aperitif, with her husband, Kyle, in 2020. When Distill Ventures invested in it in 2022, Ms. Dillon became her mentor. On numerous occasions, Ms. Pressman said, her husband would get the first handshake and most of the eye contact when they went to a business meeting. That’s not what she was used to in her previous line of work, in the fashion industry.

“I always worked in companies mostly made up of women, so stepping into the alcohol industry was definitely a culture shock,” Ms. Pressman said. “Heidi’s given me a voice in a really crowded room. She sees me as a human, not a business transaction or an investment or a number. It’s empowered me to own my differences and be who I am.”

To Ms. Dillon, prioritizing inclusiveness is the most logical way to market any drink brand.

“This is really an industry about bringing people together,” she said. “Why not have an amazing drink that can be enjoyed on an occasion — it doesn’t matter what proof it is if it still has balance and intrigue.”