Molson Coors Beverage Company
TAP
is making an all-out effort to expand its share in the fast-growing U.S. hard seltzer market. After the success of its Vizzy and Coors Seltzer hard seltzer brands, the company now signed an exclusive partnership with Coca-Cola
KO
to manufacture, market and distribute its Topo Chico hard seltzer in the United States. This not only marks Coca-Cola’s entry into the U.S. alcoholic beverage space but also expands Molson Coors’ hard seltzer portfolio. The companies expect to launch the Topo Chico hard seltzer across the United States in the first half of 2021.
Molson Coors plans to bring Topo Chico Hard Seltzer in four gluten-free alcohol base and natural flavors in the United States. These will include Tangy Lemon Lime, Exotic Pineapple, Strawberry Guava and Tropical Mango in 12-pack variety pack (slim can). The blend will contain purified sparkling water with minerals added for taste, inspired by Topo Chico sparkling mineral water, which has been popular with consumers and mixologists across the United States.
Molson Coors’ national launch of Topo Chico will combine its marketing, sales and distribution expertise. The company plans to prioritize this unveiling in the markets where Topo Chico sparkling mineral water is already popular. It expects to carry out the initial production and packaging of the Topo Chico products through a third party.
Notably, Coca-Cola introduced the Topo Chico Hard Seltzer to the Latin American countries including Mexico and Brazil, this month. The launch included three gluten-free flavors of Topo Chico Hard Seltzer comprising Tangy Lemon Lime, Strawberry Guava and Pineapple Twist in sleek aluminum cans.
Molson Coors’ partnership with Coca-Cola is a major step toward its revitalization strategy wherein it dropped “Brewing Company” from its name earlier this year with the intention of expanding beyond the beer aisle. The company’s strategy focuses on growing its above-premium brand portfolio and gaining a large share of the fast-growing hard seltzer market.
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Molson Coors Upping the Seltzer Game
Molson Coors has been raising the bar for hard seltzers through the launch of Vizzy and Coors Seltzer brands, earlier this year. This makes Topo Chico the third hard seltzer brand for the company.
Vizzy contains anti-oxidant vitamin C from acerola superfruit, which differentiates it from other sparkling seltzers. The Vizzy brand launched in April 2020 has been reckoned by Nielsen as one of the top-10 growth brands since Aug 8. Moreover, the company rolled out the Coors Seltzer brand at the end of August, which has been exceeding expectations. It expects the same to become a popular beer brand in the segment.
This apart, Molson Coors launched HUZZAH in the seltzer category in Southern California this September. HUZZAH is a pumped-up, full-flavored seltzer that will also include probiotics to support a healthy gut. Additionally, it will contain 3g or less of sugar per 12oz can and 15 calories or less. These will give it an edge over other seltzer brands in the market. The company launched HUZZAH on the online platform of DrinkHuzzah.com along with select retailers in South California. The brand includes three flavors, namely Strawberry & Hibiscus, Juicy Pear and Raspberry & Lemon. Other brands lined up for launch under the plan are MadVine and Golden Wing as well as a nootropic performance beverage that is yet to be named.
Moreover, the company had earlier launched non-alcoholic, cannabis-infused beverages through its joint venture with HEXO Corp. for the Canada and Colorado markets. Such a product line demonstrates the company’s focus on acquiring a decent market share in the non- and low-alcoholic beverage space.
Hard Seltzer Market Backdrop
Beverage companies have been scrambling for opportunities to grab a share of the lucrative hard-seltzer market, which took the alcohol-drinking American population by storm. Product innovation and increased brand launches played a crucial role in the growing penetration of hard seltzer. Further, hard seltzers are expected to continue gaining popularity owing to its low alcohol content, preferred by the millennials in developed economies like the United States, Canada and Australia.
According to Grand View Research Inc., the global hard seltzer market size was $4.36 billion in 2019 and is expected to reach $4.51 billion in 2020. Moreover, the hard seltzer market is projected to touch $14.5 billion by 2027, witnessing a CAGR of 16.2%.
The hard seltzer beverage industry is dominated by the privately-held White Claw and Boston Beer’s
SAM
Truly brand. Per Bank of America, Truly and White Claw together held nearly 80% of the hard seltzer market at the end of 2019.
Boston Beer has been making a fortune of late through growth in the hard seltzer, cider, tea and kombucha categories while it significantly lost share for its Samuel Adams lager beer in recent years. Growth at Truly is led by the Truly Hard Lemonade, which is witnessing solid trends with the momentum likely to continue. The company expects to continue investing heavily in the Truly brand to enhance the brand’s position in the hard seltzer category as competition continues to intensify. It is optimistic about the new Truly advertising campaign that showcases colors, variety and joy to the hard seltzer drinkers through four different ads.
Constellation Brands
STZ
is another brewer, which has been benefiting from the uptrends in the hard seltzer domain during the past year. The company’s Corona Hard Seltzer, launched in first-quarter fiscal 2021, racked up 6% market share in the U.S. seltzer market. The company is witnessing high Hispanic penetration rates for the brand compared with other hard seltzers. Notably, the refreshment characteristics of seltzers combined with the Corona beer brand’s popularity is aiding the performance of Corona Hard seltzer. It is available in four flavors, namely tropical lime, mango, cherry and blackberry lime.
Overall, the hard seltzer market has been a lucrative investment avenue for companies brewing beer and other spirits in the past few years. Apart from the aforementioned names, the industry houses several small-sized companies that are looking up to gain from the momentum in the hard seltzer category.
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