Startup ALTR has closed a $5 million investment to help scale its wine dealcoholization technology
The round, led by French investment fund Demeter, will allow the Phoenix-based company to build a new pilot facility on-site at a winery in California’s Napa Valley and utilize larger, custom machines capable of batch dealcoholization from 100 to 300 cases at a time.
Demeter Partners manages the €50 million VitiRev Innovation Fund, which invests in food, beverage and wine technology companies. The round also included participation from Suntory Global Spirits, Techmind, AZ Venture Capital Inc., FTW Ventures, Bluestein Ventures, Solvable and Xinomavro.
In the two years since ALTR raised its undisclosed pre-seed round, the business has been prototyping its technology and piloting its process with various wineries, primarily in California.
Using two small-scale machines, the company has been dealcoholizing “one-case at a time,” said ALTR founder and CEO Richard Schatzberger. “We’ve proved it out and everyone in the wine industry who has tried it has said it’s head-and-shoulders above anything they’ve tried [in dealcoholized wine].”
Red wine remains one of the most difficult and expensive adult beverages to recreate in a de-alcoholized format. The tech outfit chose to go after the highest hanging grapes in wine, opting to start with full-bodied red varietals like Cabernet Sauvignon to test its process. Yet, making good non-alcoholic alternatives begins with using high-quality inputs to start, Schatzberger said.
“What we’re doing now with an increased capacity is getting a breadth of varietals and using that as a data set so we can help any winemaker,” he said. “We plan to run lots and lots of different varietals through our system and have a centralized set of data that will help anybody work faster to develop new wines with our system.”
ALTR has employed wine industry veteran Joel Aiken (owner of Aiken Wines after working as a winemaker at Beaulieu Vineyard and Amici Cellars) as a consultant and ran its first official pilot run with legacy Napa vineyard Clos du Val.
“As consumer tastes continue to evolve, we believe it’s essential to explore new possibilities, including the growing interest in low- and no-alcohol wines,” said Clos du Val CEO Olav Goelet in a statement. “What drew us to ALTR was their breakthrough approach. Unlike traditional alcohol-removal methods, their technology preserves the soul of the wine while reimagining how people experience it.”
Choosing wine as a starting place was “strategically smart,” said Amira Khatib, VP at Bluestein Ventures, which invested on both the pre-seed and seed rounds.
“We’re especially excited about ALTR’s potential to deepen its partnerships with wineries and co-create products that simply weren’t possible before,” Khatib added. “ALTR is obsessed with flavor. Their patented technology preserves wine’s aroma, mouthfeel, and complexity, setting it apart from conventional alcohol removal methods that often strip away character.”
No-alcohol continues to be a key driver in adult beverage consumption, with wine growing CAGR 5% between 2024 and 2028, according to IWSR.
The participation of Japanese multinational spirits company Suntory’s contribution speaks to bev-alc strategics’ larger interest in non-alcoholic products. The company last month batted away rumors that it was preparing to make a move to acquire non-alcoholic spirits maker Arkay.
“It’s critical for our business that we understand the emerging trends within the spirits category, which helps us to deliver innovations that resonate with people and enhance their experiences with our products,” said Suntory Global Spirits chief strategy and tansformation officer Jun Asaki. “ALTR’s promising de-alcoholization technology has many possible applications across our portfolio and we’re excited to be involved in the early stages of its development.”
While ALTR’s core team is working on red wines, there is a smaller team focused on developing the company’s membrane tech for spirits dealcoholization, Schatzberger said.