Dive Brief:
- Coca-Cola and Molson Coors will be launching a line of ready-to-drink spiked lemonades based off of the soda giant's chilled juice brand Simply, the companies said in a statement.
- Simply Spiked Lemonade, which is set to hits shelves in time for summer, will start out with a variety pack inspired by some of Simply’s best-selling nonalcoholic products, including Strawberry Lemonade, Watermelon Lemonade, Blueberry Lemonade and Signature Lemonade.
- Coca-Cola and Molson Coors first teamed up in 2020 to create Topo Chico Hard Seltzer, which hit U.S. shelves in nine states last year. After a promising launch, Molson Coors announced it would roll out the beverage nationwide in 2022.
Dive Insight:
The early success of Topo Chico Hard Seltzer has left many analysts speculating the two beverage giants might collaborate on another product. The brand gained a No. 2 share in the U.S. even though it was initially distributed in just 16 markets, according to Molson Coors. In addition to a wider rollout and optimistic outlook for their hard seltzer, Coca-Cola and Molson Coors recently announced the debut of a tequila-based flavor called Ranch Water under the Topo Chico banner.
In a statement, Coca-Cola said the Simply juice brand is the company's second-largest U.S. offering in terms of net revenue, after its namesake soda. Simply is a $1 billion-plus brand that is growing, and can be found in half of American households, according to the Atlanta-based company. Coca-Cola noted Simply mixes seamlessly with alcohol for cocktails, which inspired the latest ready-to-drink lineup.
The decision to tap into Simply for a spiked lemonade is a logical transition for a brand that executives may have observed was already being used by consumers to make their favorite alcohol-inspired drinks at home, especially during the pandemic.
“Over the past two years, we’ve seen success by shaking up existing categories with new brands that have clear, compelling points of difference, like Coca-Cola's Topo Chico,” said Michelle St. Jacques, Molson Coors’ chief marketing officer. “Now, we have a huge opportunity to leverage the power of Simply — a brand known for real juice and big flavor — to disrupt the full-flavor alcohol segment in a way that’s never been done before.”
After a slow start, PepsiCo, and Coca-Cola in particular, have moved aggressively to enter the alcohol category through a series of partnerships in an effort to spur growth at their companies.
In addition to working with Molson Coors, Coca-Cola said earlier this month it is partnering with Constellation Brands, the brewer of Corona and other beers in the U.S., to launch ready-to-drink cocktails through its Fresca brand. And PepsiCo is working with Boston Beer on a Hard Mtn Dew alcoholic offering in the U.S. that is expected to hit shelves early this year.
Both PepsiCo and Coca-Cola are tapping into a deep portfolio of beverage lines and could later decide to explore extensions into alcohol with some of their other brands like Gatorade and Bubly or Honest Tea and Vitaminwater.
For beer makers, the ability to tap into well-known brands such as Simply, Mtn Dew and Topo Chico give them instant visibility and another way to distance themselves from their competitors in a crowded marketplace. At the same time, it provides them with another offering to offset a decline in beer consumption and a slowdown in the growth rate of hard seltzers.
Nonalcohol companies and their boozy counterparts have long stayed away from producing drinks made by the other side until recently. Soda companies are not the only ones to expand their reach. AB InBev's Anheuser-Busch is rolling out Bud Light-branded hard soda, available in four flavors: cherry cola, citrus, orange and classic cola.