Boston Beer is eying the nascent vodka ade category as its next point of growth, with CEO Jim Koch saying that hard sports drinks have "exploded faster" than hard teas or seltzers.
The Sam Adams maker launched Rally Dog Vodka Ade in four states earlier this year with plans to go national in 2027, Koch said in an earnings call last week. Rally Dog is the latest in a frenzy of similar launches and acquisitions from alcohol giants, with Constellation Brands and White Claw owner Mark Anthony Group recently entering the space.
“Vodka ade, in a year, has basically gone from this little curiosity primarily in New Jersey to the next big thing in people’s minds,” Koch said.
Vodka ade combines the flavors of traditional sports drinks like Gatorade and Powerade with vodka. The drinks are typically low-calorie and have the hydrating benefits of electrolytes found in the sports drinks.
While the trend is still new and unlikely to overtake the popularity of hard teas or seltzers, Koch predicts "there will be a lot of activity" in the space over the next year, with more competitors likely to throw their hats in the rings. He said Boston Beer has received commitments from Rally Dog from major chains “who are making it their No. 2 or 3 bets in the vodka ade category.”
Other alcohol giants have tapped into the trend either by developing a vodka ade product in house or by acquiring one. Modelo maker Constellation Brands acquired SpikedAde for $75 million, and Surfside maker Stateside Brands launched Super Lyte earlier this year. White Claw owner Mark Anthony Group also launched a similar drink called RefreshAde.
To stand out against new entrants in the space, Koch thinks Rally Dog can compete based on its unique name and “easy-to-understand flavors,” which include Berry Breeze, Tangerine Twist, Lemony Lime and strawberry watermelon. Though he noted with more new entrants in the space, Boston Beer's scale and "track record of innovation" in retail could give it an edge over smaller entrants.
“As we expand, we're focused on building awareness, deepening distributor engagement and establishing a larger retail footprint as we head into next year,” Koch said.
Like its peers in the beer category, Boston Beer has worked to expand its “beyond beer” portfolio as beer sales face headwinds. Boston Beer’s beyond beer portfolio is anchored by Twisted Tea, Sun Cruiser, Angry Orchard and Truly Hard Seltzer.
Boston Beer estimated that beyond beer volumes grew 1% year to date, outperforming traditional beer, which declined 3%. Boston Beer’s overall net revenue in the third quarter totaled $520 million, down 3.2% from last year.
