ALTR Dealcoholization Startup Introduces New Technology To Create Low-ABV Premium Wines

The BevAlc industry is facing headwinds. The nonalcoholic beverage market is in a newfound heyday.

A large piece of that puzzle is because of the growing philosophy that “drinking shouldn’t equal drunk.”

The founder of a new dealcoholization technology, ALTR [‘alter’], Richard Schatzberger echoes the sentiment. “The wine industry is being left behind through poor technology. And that’s what we’re really here to solve,” he tells me.

After five years of creating the business and partnering with several premium wine brands to develop the technology, ALTR reveals it has raised $5 million to begin bringing products made with its technology to the market.

“We don’t look at the market as just alcoholized. We think that’s kind of an old fashioned, binary way to look at it,” Schatzberger says.

ALTR’s technology has the capability to completely dealcoholize beverages, but that’s not its primary focus. It’s launching with the goal to create an ABV spectrum where brands will be able to create blends with a range of ABVs. “Whatever you want to drink, at whatever level ABV, we are going to be the underlying technology that allows beverage makers to be able to create those for consumer needs,” Schatzberger says. “You get the ultimate choice.”

Current dealcoholization processes, mainly vacuum distillation, reverse osmosis or spinning cone columns, typically heat the liquid to extreme temperatures to remove the ethanol. Stripping it out this way often strips other characteristics of the beverage, leaving them tasting stale, which is why juices, sugars and botanicals are often added afterwards. As Schatzberger puts it, “it’s lost its integrity.” With ALTR’s more gentle technology, those distinct properties that provide wine its complexity stay put.

“We actually started this from an opposite perspective,” says Schatzberger. “Getting the alcohol out is the second part of the problem. The key part is to keep the flavor, aroma and mouthfeel.”

ALTR uses a membrane process that targets only the ethanol molecule without the intense heat and without excessive water. “We keep the bonds between all of the things that happen inside the barrel, and most of those bonds stay. We literally pass the wine across a membrane. The affinity for the alcohol molecule and that membrane is really strong,” he says.

Alcohol is more than just a means of feeling wine throughout the body, but a carrier for flavor and texture. “We are taking out a very significant piece of the wine,” Schatzberger explains. Simply put, ALTR believes it has created a technology that has never before been created, where winemakers (and consumers drinking the wine) no longer have to consider low- and no-ABV wines stale and dull while maintaining its heritage. “What we do is we keep everything else and that makes it a real wine….You do what your craft has been for thousands of years, and then you choose the alcohol level.”

Aside from slight tweaks, the overall method has the capacity to dealcoholize any type of alcoholic beverage, but ALTR is starting its tests on wine. More specifically, it’s focusing on creating mid-strength wines–hovering around 7% ABV–rather than fully dealcoholized wines. “The general baseline of a wine is at 13, 14%,” Schatzberger says. “We think that’s one of the reasons that people are starting to move away from it…There’s differentiation in label, style…all those different things except alcohol.”

“There are truly exceptionally good non-alc beers….wines are a little bit harder to get right,” says Douglas Watters, founder of Spirited Away, the nation’s first nonalcoholic retail bottle shop, and Dry Atlas, a media company centered around adult nonalcoholic beverages. “[Wine is] a finer alcoholic drink…There are more demands from consumers.”

There’s no denying that the wine industry, and the BevAlc industry altogether, is at a crossroads. “The groundswell of consumer interest in ‘no and low [ABV]’ is showing no signs of stopping,” Watters says. SPINS data from the past 52 weeks shows that the nonalcoholic wine market is up more than 35% with the overall NA market up nearly 25%. The standard wine market, on the other hand, is down 3.5% with the overall BevAlc market down 1.4%

Now seven years sober, Schatzberger, who helped commercialize smartphones and AI assistants like Siri, founded ALTR as part of his own sobriety journey, which at times has left him feeling isolated and misunderstood. “When I got sober, I was separated from the thing that connects people around social settings,” he says about alcohol. “That put me on the side of society.”

Although nobody, sober or otherwise, should ever feel pressured to drink alcoholic beverages, social settings and behaviors realistically make it hard for some. The increasing number of nonalcoholic options on the market closes that gap for those experiencing what Schatzberger felt. “Drinking more thoughtfully while keeping the social rituals is the goal, and what hopefully we can achieve with this category of social beverages,” Watters says. “Great technologies are going to be a big piece of what can help to make consumers aware that there are great no- and low-ABV wines on the market now.”

In other settings, like a restaurant or just something more simple like inviting loved ones over for a cozy evening, a glass of wine plays an important role. ALTR preserves that ritual. “People are not drinking it to get that drunk. They’re drinking it because of the heritage and the tradition, and people are losing out on that,” Schatzberger says. “Society is going back to that place of tradition, something that’s crafted by humans.”

The ALTR factory is in the heart of America’s wine country, Napa Valley, where a handful of nearby winemakers, including Clos du Val, are taking part in its pilot program. ALTR is aiming to partner with luxury winemakers who are looking to add a no- or low-ABV blend to their portfolios to engage with the growing demand.

“We are a brand that’s very focused on the land,” says Clos du Val CEO Olav Goelet, who inherited the company from his grandparents in 2018. Clos du Val grows its grapes in the Stags Leap region of Napa Valley with a Bordeaux philosophy and approach to winemaking. “We’ve never chased a certain alcohol percentage,” he says. “Our style of winemaking is more akin to an Old World style.”

Cos du Val has been cautious about entering the no- and low-ABV market. It would not create such a product if it could potentially tarnish the brand’s reputation. “We didn’t have confidence with the technology that was there today to come out with something that we could stand behind from a quality standpoint,” Goelet says. “The low and no alcohol space as it sits today in the wine industry has been leveraging existing technologies that were created really for other industries…ALTR is focused on the product.”

“A lot of businesses can get themselves into trouble by chasing a trend,” Goelet adds. But meeting Schatzberger through Clos du Val’s investment arm turned into a way where he could meaningfully get involved. “Innovation was always a cornerstone of our grandfather and grandmother and we wanted to continue that spirit.” Clos du Val plans to expand its portfolio and release a low-ABV wine using ALTR’s technology under a new forthcoming brand.

Changing climates have also made it difficult for winemakers in parts of the world to achieve the ABV they were once used to. “The use case potential for this technology is not just to make a no- or low-alc. You can also use it to find the sweet spot as you go to finish your wine,” Goelet says, referring to the spectrum, adjusting ABV just perhaps one or two percent.

ALTR has future plans to grow certain grape varietals that are considered better suited for no- and low-ABV wine blends. As to Schatzberger tasting any of the fruit of his low-ABV labor, the answer is no; he remains fully sober. But he reads data on trials that Clos du Val and others, which have contributed wine for testing purposes, have gathered. Everything he knows and describes about his low-ABV wines is based purely on that extensive data.

Schatzberger believes his biggest competition will be full-strength wine, not NA wine, as peoples’ expectations are already quite low with the latter. “Our customers are requesting just fantastic wines with less alcohol. And I think that that’s the shift,” he says. “This is about shifting people’s relationships with alcohol by giving them choices.”