Keurig Dr Pepper (KDP) has entered a definitive agreement to acquire global rights to Canadian non-alcoholic RTD cocktail brand Atypique. The acquisition is expected to close in early Q4 2022 and terms of the deal were not disclosed.
Founded in 2019, Atypique is produced by Quebec-based Station Agro-Biotech, which produces a variety of alcoholic and non-alcoholic beverages, including Noroi distillery and the Le Bilboquet microbrewery. The Atypique brand, which is currently sold in around 3,000 retail stores in Quebec, makes a variety of canned mocktails available in Mojito, Rum and Cola, Spritz, Margarita, Gin & Tonic, Red Sangria and Amaretto Sour flavors.
The brand also produces a line of zero-proof spirits in 500 ml bottles in Gin, Whiskey and Aperitivo varieties.
According to a press release last week, the multi-year agreement is intended to “fuel accelerated growth for Atypique” by “leveraging Station Agro-Biotech’s R&D expertise in the category and KDP’s robust sales and distribution network.”
In a statement, KDP CFO and president of international Ozan Dokmecioglu, who is set to take over as the corporation’s CEO this summer, said KDP will work to scale Atypique in Canada while the global rights will help establish the brand outside of Canada.
According to Beverage Daily, the Canadian non-alcoholic cocktail category grew 30% over the past year and Atypique has a 42% market share within the regions it is available. Globally, IWSR Drinks Market Analysis reported that NA spirits volume sales grew 289% between 2016 and 2020 and, in the U.S., the space is projected to grow another 12.6% between 2021 and 2025.
“We were looking for the best way to bring Atypique to the next level,” said Station Agro-Biotech president Jonathan Robin in the release. “This agreement represents an exceptional opportunity to work with a beverage industry leader, and Keurig Dr Pepper will bring market knowledge and strength to the Atypique brand. At the same time, we are delighted to have the opportunity to keep growing and innovating within a category in full effervescence and have more time to spend doing R&D in the broader beverage space.”
Atypique is expected to expand KDP’s presence in the adult beverage category in Canada, where the company has rolled out ready-to-drink alcoholic line extensions for established brands including Snapple Spiked, Mott’s Clamato Caesar, Mott’s Garden Cocktail and Hires and Vodka.
Though KDP did not explicitly announce plans to bring Atypique to the U.S., an American launch would give the conglomerate a foothold in the evolving adult non-alcoholic beverage space. As Americans consume less alcohol, large strategics like PepsiCo (Neon Zebra, Bubly Bellini Bliss) have been eager to meet demand for more sophisticated and differentiated non-alcoholic options.
The announcement comes as the RTD mocktail category has continued to expand its footprint in U.S. retail via the expansion of brands like Mocktails, Lyre’s and Mingle Mocktails, among others. At Summer Fancy Food Show 2022, Mingle Mocktails announced it had expanded its footprint to over 5,000 doors nationwide, buoyed by retailers such as Town & Country and Erewhon which have built out new sets for non-alcoholic adult drinks. In April, Erewhon purchasing director Ana Yoo told BevNET that the retailer saw sales of non-alc adult beverages grow 150% over the past year.
Last year, KDP announced its intent to increase M&A activity over the next several years, with up to $20 billion available to seek out brands that can fill white space in its portfolio.
Speaking during the company’s Q1 earnings call in April, KDP CEO Bob Gamgort said the company is exploring a variety of investment and M&A opportunities, including partnerships with smaller companies such as foodservice beverage provider Tractor, as well as acquisitions and deals with mid- and large-sized brands. Dokmecioglu said the company is also focused on optimizing its distribution across various regions in order to fill “white spaces in select brand groups” and open up “new consumption occasions.”
“It’s a full package in terms of the growth trajectory that we have in front of us which makes us obviously very excited and motivated,” Dokmecioglu said. “And our job is to continue to execute very successfully against this strategic planning stance and deliver the business goals that we put on us.”
KDP did not immediately return a request for comment.