Brewscape: The Latest Craft Beer Brand News

Constellation Brands and Coca-Cola Partner on Fresca Branded Canned Cocktail

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.”

“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.”

Other than being spirit-based, no other details of the alcohol base were released. Constellation will use its own distribution networks for Fresca Mixed.

During Constellation’s third-quarter earnings call, 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. 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. After a successful launch in select markets, Molson Coors announced that it would take Topo Chico Hard Seltzer nationwide and expand the brand with a ranch water version.

Tilray Acquired Green Flash and Alpine for $5.1M; Dissolves Anheuser-Busch JV

SweetWater Brewing parent company Tilray paid $5.1 million in cash and stock to acquire Green Flash Brewing and Alpine Beer Company in January, according to financial forms filed with the U.S. Securities and Exchange Commission.

A purchase price of $5,133,000 for the San Diego craft brands values their combined 2020 output of 34,000 barrels at $150.97 per barrel – far less than the $1,149.42 per barrel Tilray paid to acquire Atlanta-headquartered SweetWater in late 2020.

Tilray CEO Irwin D. Simon shed some light on the acquisition during a conference call to discuss the company’s second quarter earnings.

“Right before year-end, SweetWater announced the acquisition of Alpine Beer and Green Flash, iconic West Coast craft beer brands to be brewed in our new Fort Collins facility for West Coast distribution, all which complements SweetWater’s existing product offerings and give us a strong foothold in California and the west part of the United States, the largest state economy in the U.S. and the largest legal cannabis market in the world,” he said.

The $5.1 million Tilray paid to WC IPA LLC, the investor group that acquired Green Flash in April 2018, includes the brands’ intellectual property and inventory. Green Flash and Alpine beer will be brewed at SweetWater’s Fort Collins, Colorado-based production facility, which Tilray acquired from Red Truck Brewing in July 2021.

Also last month, Tilray acquired all membership interests in Cheese Grits LLC, the limited liability company that owns the real estate SweetWater occupies in Atlanta, for $30.6 million. The deal included “the assumption of outstanding debt” and the issuance of nearly 1 million shares of Tilray stock.

Tilray remains bullish on the prospect of federal legalization of cannabis in the U.S. and that its acquisition of three American craft breweries and Colorado-based Breckenridge Distilling will help it recruit American consumers through infused beverages, once legal. However, the company plans to support its beverage alcohol brands in their current forms.

“One of the big things you can’t do is wait for the U.S. to legalize,” Simon said. “I think what the important thing is is us being in adjacency categories, that [have] got growth, that [have] got accretion, that give us opportunities in the marketplace.”

Meanwhile, Tilray and Anheuser-Busch InBev have parted ways on the joint venture they launched to explore cannabis-infused beverages for the Canadian market in 2018. The world’s largest beer manufacturer was not interested in pursuing THC-infused beverages and the JV became “a major money-losing relationship,” Simon said.

Fluent Beverages, the brand created by the JV, is now a wholly owned subsidiary of A-B-owned Labatt Breweries of Canada, and Tilray will operate as its co-manufacturing partner, Labatt director of communications Tamar Nersesian told Brewbound.

“We do not expect these changes to have any significant impact on Fluent’s day-to-day operations as it remains focused on commercializing CBD-infused non-alcohol beverages in Canada,” Nersesian said.

At its launch, both companies invested up to $50 million in the JV.

Kings & Convicts to Acquire Saint Archer Facility; Molson Coors Discontinues Craft Brand

The San Diego craft brewery scene is once again getting shaken up by the Kings & Convicts. After acquiring the Ballast Point brand from Constellation Brands in 2019, the company is acquiring the brewing facilities and taprooms of Saint Archer from Molson Coors.

Molson Coors announced the deal and plans to cease production and distribution of the Saint Archer brand on its blog.

“The Saint Archer team has built a distinct brand that has a very loyal following in Southern California. Unfortunately, the overall business has struggled to grow despite investing significant resources behind its production and commercialization,” Paul Verdu, VP of Tenth and Blake, Molson Coors craft division, said in a press release. “We’ll maintain ownership of the Saint Archer brand as we determine the best long-term plan and remain focused on growing our regional breweries that continue outpacing home-market competitors.”

In the blog post, Verdu added that the company “tried to do everything we could to keep the brand going, but it just wasn’t financially viable to continue operating.”

Enter Kings & Convicts, which will acquire the 50,000 sq. ft. brewery with its 40-barrel brewhouse, 5-barrel pilot system, cellar, canning line and a 1,200 sq. ft. satellite taproom in Leucadia. The company plans to take on Saint Archer’s operations and tasting room employees.

With 1 million barrels of beer brewing capacity at its Ballast Point facility, why does Kings & Convicts need another San Diego brewery?

CEO Brendan Watters explained that the company wanted a headquarters for Kings & Convicts, where its beer will be produced, as well as small batch Ballast Point offerings and other craft beverage products. He added that the Ballast Point facility with its 300-barrel brewhouse was “too bloody big” for Kings & Convicts, and the Saint Archer facility made more sense.

Additionally, Watters said Saint Archer’s packaging line was an upgrade over Ballast Point’s existing line, giving the company back capabilities it lost when it sold the Scripps Ranch facility to hard kombucha maker JuneShine.

With the soon-to-be former Saint Archer facility, Kings & Convicts will scrap its planned facility in Pleasant Prairie, Wisconsin. The Kings & Convicts brand is only sold in select markets in Illinois and California, where it is self-distributed.

Watters added that the acquisition of the facility is about creating capabilities and flexibility within a beverage alcohol industry that is in the midst of a convergence.

“For us, it’s much more important to ensure that we grow a profit,” he said. “I don’t care about rankings. I care about what’s sitting in the bank account. And so part of this is really thinking about a profitable, sustainable company with brands that allows us to do stuff and be more nimble, quite frankly, as we start to develop new products, and we come to market with new products.”

Molson Coors acquired Saint Archer in 2015, marking the company’s first craft acquisition in California, the country’s largest craft beer market. Under Tenth and Blake, Saint Archer’s volume peaked at 65,000 barrels in 2019.

Saint Archer’s output declined -15%, to 55,000 barrels in 2020, making it the fifth largest brand among Tenth and Blake’s seven craft breweries.

Molson Coors placed significant investment in Saint Archer Gold, the company’s health-and-wellness challenger to Anheuser-Busch InBev’s Michelob Ultra, in early 2020, promoting it with a Super Bowl ad that featured pro skateboarder Paul Rodriguez skating from store to store in search of the beer while whistling along to Guns N Roses’ “Patience.” But the company was impatient with the new product and announced its hibernation seven months later.

Sierra Nevada Enters Non-Alc Fray with Hop Splash Sparkling Hop-Infused Water

One of the nation’s largest craft breweries is dipping its toe into the non-alcoholic beverage space. Sierra Nevada Brewing Company has launched its first non-alcoholic product, Hop Splash, a sparkling water infused with Citra and Amarillo hops.

Sierra Nevada began pre-selling Hop Splash (zero calories, carbs and sugars) via its website on January 3. Shipments will go to the lower 48 states with orders limited to no more than four 6-packs at $10 apiece, plus shipping costs ($5 for up to two 6-packs).

Robin Gregory, Sierra Nevada’s director of communications, said the craft brewery is testing the product first with direct-to-consumer sales to gauge interest and gather feedback before exploring taking it to retail.

“We felt pretty confident that we could launch this online and get feedback and just see how it does for now,” she said. “And then see where it goes in the future.”

Should Hop Splash graduate to retail, the brand would face competition from several existing hop waters, including Athletic Brewing’s Daypack, Lagunitas’ Hoppy Refresher, Hop WTR (with a minority investment from Constellation Brand), Hop Lark, H2OPS, HopTea, Aurora Superior Sparkling Beverages and Oregon Hop Springs, among several others.

Until then, Hop Splash will be sold directly to consumers through e-commerce. Sierra Nevada ramped up its DTC sales capabilities over the last two years of the COVID-19 pandemic, shipping beer directly to consumers in eight states. The infrastructure built during the pandemic and the lack of constraints on sales of non-alcoholic beverages has allowed the company to offer Hop Splash to consumers in 48 states.