TAP - PepsiCo and Boston Beer join hands to create an alcoholic Mountain Dew drink
PepsiCo, Inc. ( NASDAQ: PEP ) and Boston Beer Company Inc ( NYSE: SAM ) will produce an alcoholic Mountain Dew drink christened Hard Mtn Dew as part of a business collaboration. The all new introduction will be an alcoholic version of Mountain Dew named Hard Mtn Dew.
The beverage is expected to be sold by early 2022
Hard Mtn Dew belongs to the flavored malt beverage category. According to sources familiar with the developments, the beverage will contain 5% alcohol by volume. In addition, product images convey that the drink will be sugar free. If all falls in place, the new flavored malt beverage will be made available in the market by 2022.
While Boston Beer will be responsible for developing and producing the drink, the onus of delivering, marketing, and selling the alcoholic beverage will be PepsiCo, Inc.
For many years now, PepsiCo has been moving soda into different categories like energy drinks. Mtn Dew Rise Energy was launched earlier this year. With a 7% market share in the carbonated soft drinks category, Mountain Dew is in fifth place in this segment.
The timing of the partnership is important
The timing of the partnership is essential. It comes at a time when products of the Boston Beer are struggling to find buyers. The company’s stock tumbled 26% in a single day, pushing the brewer to cut its annual forecast. Beer volume declined on the whole, 2.8% last year, in the backdrop of an increase in overall alcohol consumption. According to industry tracker IWSR, the total alcohol consumption recorded the highest growth in rate in close to 20 years. In a bid to introduce its iconic brands into new categories, Boston Beer Company Inc announced an agreement with Beam Suntory.
Shares of Boston Beer traded down more than 1% on Tuesday. Meanwhile, shares of PepsiCo are up less than 1% in trading Tuesday. In October, PepsiCo, Inc. CEO Ramon Laguarta went on record and stated that the company could consider venturing into the alcohol category. Rival Coca-Cola Co ( NYSE: KO ) announced its plans of creating create Topo Chico Hard Seltzer by partnering with Molson Coors Beverage Co Class B ( NYSE: TAP )
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