Constellation Brands has entered a brand agreement with The Coca-Cola Company to manufacture, market, distribute and launch Fresca Mixed – a spirit-based ready-to-drink cocktail based on the citrusy soft drink.
“The Coca-Cola Company’s Fresca brand is not only trusted by consumers, but also directly delivers on consumer preferences for refreshment, flavor, and convenience – attributes that also play well within beverage alcohol and where we can leverage our expertise,” Bill Newlands, Constellation president and CEO said in a press release.
Fresca, a zero calorie soda with citrus-inspired flavors, is the fastest growing soft drink trademark in Coca-Cola’s U.S. portfolio, according to the announcement. The new Fresca Mixed product – which will be released later this year at a yet-to-be-determined date – will “balance the Fresca flavor consumers expect with quality spirit bases rooted in Constellation’s expertise.” Other than being spirit-based, no other details of the alcohol base were released.
“One of the core tenets of our innovation strategy is a belief in the power of extending strong and trusted brands in thoughtful ways to bring to market unique products that resonate with consumers,” Mallika Monteiro, Constellation’s chief growth, strategy, and digital officer, said in the release. “This is an exciting agreement that allows us to continue expanding our premium portfolio in ways that deliver distinctive consumer value propositions that include things like more flavor, different alcohol bases, and functional benefits.”
For Coca-Cola, the launch represents a new direction for its New Revenue Streams (NRS) group, formerly known as Venturing & Emerging Brands (VEB), which is tasked with taking “a disciplined, test-and-learn approach to innovation with ongoing experimentation and new beverage and brand launches in emerging or unfamiliar categories,” according to a statement from the company. In the past, as VEB, the division made targeted investments in brands like Health-Ade and Topo Chico, though recent Coke innovations have been mainly around in-house properties like AHA or its flagship soda line.
In a statement, NRS chief Dan White praised Constellation’s “consumer-focused approach, entrepreneurial spirit, expansive distribution network and distilled distribution expertise,” making them “an ideal choice to bring FRESCA Mixed to market.”
“As we emerge from the pandemic and look to long-term growth, we recognize that we must evolve our business models to address the entire beverage experience,” White said. “We created New Revenue Streams to do just that – to identify a broader range of revenue opportunities for the company beyond our traditional ready-to-drink beverage products.”
During a conference call to discuss Constellation’s third-quarter earnings results, Newlands said more than half of Fresca’s consumers already use the diet soda as a mixer with spirits.
Fresca Mixed isn’t Coca-Cola’s first foray into beverage alcohol via the RTD segment. After releasing its first-ever alcohol product in Japan in 2018, last year the beverage behemoth partnered with Molson Coors Beverage Company to launch Topo Chico Hard Seltzer, a sugar-based offering based on its popular non-alc mineral water. Following a successful launch in select markets, Molson Coors announced this week that it would take Topo Chico Hard Seltzer’s variety pack nationwide and expand the brand with a ranch water version.
“Third-party relationships with licensed alcohol manufacturers show how we are following the consumer, taking an agile, experimentative approach to expanding our brands’ reach based on the evolving landscape,” White said. “The flavored alcohol beverage category is unique as there are synergies with our existing business models in various markets around the world. With the combination of a familiar, loved brand and strong distribution and market presence, we believe people will love the FRESCA brand in this new category.”
Coca-Cola isn’t the only soda giant exploring the bev-alc space. PepsiCo and Boston Beer Company announced a partnership in August to create Hard MTN Dew. Through that agreement, Boston Beer will develop and produce the flavored-malt-beverage (FMB), while PepsiCo will create a new distribution entity to sell, deliver and merchandise the product.
Unlike the Hard MTN Dew agreement, Constellation will use its own distribution networks for Fresca Mixed.