- Constellation Brands just announced it acquired a minority stake in Karma Wellness Water in July 2019 through its Constellation Ventures unit. The alcohol titan is now collaborating on a marketing campaign to boost Karma's beverage brand and its patented cap technology.
- The "Believe in Karma" campaign includes a new packaging design and social media emphasis, Constellation said in a release. Karma's push cap technology debuted in 2011 and delivers vitamins and probiotics into the bottle's contents when the consumer twists the cap prior to consumption.
- Constellation said the campaign highlights that nutrients in other premixed drinks deteriorate over time, but Karma's recyclable and FDA-compliant cap "guarantees that the ingredients are delivered at peak potency and are never compromised."
Although Constellation — which is known for brands like Corona and Modelo Especial beer — is only now announcing its minority investment last year in Karma Wellness Water, it makes sense for the company to want to promote the factors that make Karma's products unique.
The acquisition was Constellation Ventures' first investment in a nonalcoholic brand, so the company is ramping up Karma's marketing efforts to make sure the partnership is a success. Constellation seems to have picked Karma for its first investment in this space since it offers a unique cap design and because functional foods and beverages have been increasingly popular in recent years.
Jennifer Evans, vice president of Constellation Ventures, said in the release consumers want to be healthier and have more mindful lifestyles, and Constellation has been working with Karma during the past six months to try to meet that demand. Investments like this put Constellation at the "forefront of an evolving beverage industry," she said.
With its patented cap technology, Karma's products are shelf stable for up to 18 months until consumers buy and mix the beverage and the functional additives, BevNET reported. Karma also operates a separate B2B business that licenses and sells its patented cap technology, the publication added, which could be another lucrative asset for Constellation.
Karma Founder and CEO C.J. Rapp told BevNet its partnership with Constellation will further promote the push cap technology by working with pharmaceutical companies on medical applications. He said other benefits of the collaboration include access to Constellation's strategy, marketing and sales departments — plus its extensive direct store delivery network.
If this investment in Karma pays off, Constellation could continue investing in nonalcoholic beverages. Recently, Constellation has been putting money into a variety of intoxicating drinks, including whiskey, mezcal, seltzer and craft alcohol brands. In 2018, the company made a significant $4 billion investment in cannabis company Canopy Growth that has been dragging down its earnings, so branching out into a new space could be a good approach.
But not all of the company's deals have been acquisitions or investments. Constellation recently sold craft brewer Ballast Point, which it acquired in 2015 for about $1 billion. In announcing that sale, CEO Bill Newlands said the move would allow Constellation to focus on its import portfolio and on upcoming product introductions such as Corona Hard Selzer. Constellation also announced late last year it was selling a number of its wine and spirits brands to E. & J. Gallo Winery in a deal valued at $1.1 billion.
Constellation isn't the only traditional alcohol company getting into nonalcoholic brands. AB InBev has been introducing no- and low-alcohol craft beers to try and keep up with shifting consumer demands in the sector. The brewing giant, which owns Budweiser, Michelob, Labatt and many other beer brands, has said it plans to have 20% of its global beer volumes coming from no- and low-alcohol beers by 2025.